X may lose up to $75 million in revenue as more advertisers pull out

X may lose up to $75 million in revenue as more advertisers pull out

Social media company of anti-Semitic conspiracy this month. .

Internal documents seen by The New York Times this week show that the company is in a more difficult position than previously known and that concerns about Musk and the platform have spread far beyond companies like IBM, Apple and Disney, who stopped their advertising campaigns. in X last week. The documents list more than 200 ad units from companies including Airbnb, Amazon, Coca-Cola and Microsoft, many of which have stopped or are considering suspending their ads on the social network.

The documents come from X’s sales team and are intended to track the impact of all advertising lapses this month, including those from companies that have already paused and others that may be at risk of doing so. They list how much advertising revenue X employees fear the company could lose through the end of the year if advertisers don’t return.

On Friday, X said in a statement that $11 million in revenue was at risk and that the exact figure fluctuated as some advertisers returned to the platform and others increased spending. The company said the figures seen by The Times were either outdated or represented an internal exercise to assess total risk.

Advertising freezes occur during the last three months of the year, which is traditionally the strongest quarter for the social media company, as brands run holiday promotions for events like Black Friday and Cyber ​​Monday. In the final three months of 2021 (the last year the company reported fourth-quarter earnings before Musk took over), the company posted $1.57 billion in revenue, nearly 90 percent of which came from advertising .

Since Musk’s $44 billion acquisition of Twitter last year, some brands have been hesitant to advertise on the platform, concerned about Musk’s behavior and content moderation decisions, which have led to a rise in inflammatory and hateful content. U.S. advertising on the platform is down nearly 60 percent this year, prompting the company to try to woo advertisers in an effort led by its CEO, Linda Yaccarino. X is also campaigning for advertisers to return over the Christmas period to make up for the drop in revenue earlier in the year.

The documents, however, reveal that it has not gone as planned. More than 100 brands are shown to have “completely paused” their ads, while dozens of others are listed as “at risk.” Many paused on or after Nov. 15, when Musk wrote in a post on X that the conspiracy theory that Jews supported minority immigration to replace white populations was “the real truth.”

Leesha Anderson, vice president of digital marketing and social media at ad agency Outcast, said her clients stopped spending consistently on X after Musk took over and found alternatives on platforms like LinkedIn and TikTok.

“In today’s dynamic marketplace, brands have a wealth of platform options at their disposal to accurately target audiences,” he said. “Therefore, it is imperative that administrators and owners of social platforms exercise deliberate discretion in all aspects, whether their personal beliefs or political stances, as these choices will inevitably come under public scrutiny.”

According to the documents, organizations that have paused their ads on X range from political campaigns to fast food chains to tech giants. Airbnb, for example, suspended more than $1 million in advertising, while Uber reduced more than $800,000 worth of ads, pausing campaigns in US and international markets. Both technology companies declined to comment.

Other big brands, including Jack in the Box, Coca-Cola and Netflix, paused some of their campaigns. The halted Netflix ads were worth nearly $3 million, according to estimates by X. Jack in the Box, Coca-Cola and Netflix did not respond to requests for comment.

Several Microsoft subsidiaries have also stopped advertising, leading to a potential loss of more than $4 million in revenue for X’s fourth quarter, according to the filings, as have the books and music units of Amazon and a subsidiary of Google. The search giant and some other brands that have stopped spending, including NBC UniversalThey have continued to publish content on the platform without paying X to ensure it reaches a wide audience.

Google and Microsoft declined to comment. Amazon did not respond to requests for comment.

On NBC’s “Meet the Press” last Sunday, Republican presidential candidate Chris Christie called Musk’s comment part of a recent outpouring of an “outrageous kind of hate.”

“Whether it’s Elon Musk, the professors on our college campuses or the students who are misleading, or the individuals who speak in an anti-Semitic manner on the streets of our cities,” he said.

Two days before Christie’s appearance, a super PAC supporting him called Tell It Like It Is pulled its advertising for X, according to the documents. A representative for the political fundraising group did not respond to a request for comment.

In an internal meeting with X employees this week, Yaccarino adopted a defiant attitude. He made no mention of Musk’s endorsement of the anti-Semitic post and attributed the company’s problems to a report by left-wing media watchdog group Media Matters, which showed ads in X from companies like IBM and Apple appearing alongside posts promoting Musk. The whites. Nationalist and Nazi content.

On Monday, after Musk called Media Matters “an evil organization,” to bypass safeguards and create Images from paid posts from X’s largest advertisers alongside racist and inflammatory content.” Ms Yaccarino has blamed the Media Matters report for the decline in X’s advertising sales.

“Bowling to criticism or external pressure is simply not the way X will operate,” he wrote in an email to X employees on Wednesday that was seen by The Times. “The people of X are defenders of freedom of expression. “We stand in solidarity with those who believe in this fundamental right and in the critical checks and balances of a thriving democracy.”

Earlier this week, Musk spent time celebrating companies that have continued to advertise on X, including the National Football League. Wearing a heart emoticonthe billionaire owner of

Mr. Musk too noted that the company would donate “all advertising and subscription revenue associated with the war in Gaza to hospitals in Israel and the Red Cross/Crescent in Gaza.” The funding will include revenue from ads purchased by charity groups, news organizations and other groups advertising content related to the conflict.

Following his boss, Yaccarino added a plea to Musk’s original post.

“Lean in and help,” she wrote in X.

Tiffany Hsu contributed reports.

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John C. Johnson

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