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Elon Musk’s X risks losing $75 million as big brands pull ads

Elon Musk

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TL;DR

  • Major companies like Microsoft and Coca-Cola are reconsidering their advertising commitments with Elon Musk’s social media platform X.
  • Internal documents suggest over 200 advertisers are pausing or considering halting their ads on X following antisemitic content concerns.
  • X faces a potential loss of $75 million in advertising revenue by the end of 2023 due to the exodus of these major brands.

 

In a significant development impacting the social media industry, several high-profile companies, including Microsoft, Airbnb, and Coca-Cola, are reconsidering their advertising commitments with the social media platform known as X. This shift follows a controversy involving the platform’s owner, Elon Musk, and the spread of antisemitic content.

Internal documents reviewed by The New York Times suggest that these companies, among over 200 others, are either suspending or contemplating a pause in their advertising activities on X. This move is seen as a direct response to concerns over content moderation and Musk’s recent behavior, which has sparked widespread criticism.

Financial implications for social media giant

The repercussions for X, a platform reeling under negative publicity, are substantial. Reports indicate a potential loss of up to $75 million in advertising revenue by the end of 2023. The timing aggravates the situation, as the final quarter of the year is usually a lucrative period for social media advertising due to holiday promotions.

In contrast to the $1.57 billion in advertising revenue reported in the final quarter of 2021, U.S. advertising on the platform has seen a nearly 60 percent decline this year. The current leadership, spearheaded by CEO Linda Yaccarino, is actively trying to re-engage with advertisers. Despite these efforts and running ad campaigns during the holiday season, the platform faces a tough challenge in offsetting the revenue shortfall.

The company has responded to these reports, stating that while $11 million in revenue is potentially at stake, the figures from The Times may be outdated or part of an internal risk assessment.

Brands react to content and leadership concerns

The decision by several brands to suspend advertising ties with X is not isolated. Companies like IBM and Apple had previously paused their advertising following the display of antisemitic content. The recent statements by Musk, which involved endorsing a conspiracy theory about Jewish people, have only intensified these concerns.

Over 100 brands have been marked as having “fully paused” ads, with many others categorized as “at risk.” This trend of advertising withdrawal aligns with the broader industry’s sensitivity to content moderation and ethical considerations in digital spaces.

X’s advertising crisis underscores social media platforms’ growing challenges in balancing free speech with responsible content moderation. As brands become more vigilant about the environments in which their advertisements appear, platforms like X are compelled to reassess their content policies and leadership actions.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

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