In a concerning trend for Elon Musk's social media platform X, a new global study reveals that over a quarter of advertisers intend to decrease their spending on the site in the coming year. This exodus is driven by growing unease about content moderation and information reliability on the platform formerly known as Twitter.
Declining Advertiser Confidence
According to research conducted by data firm Kantar, 26% of marketers are planning to reduce their ad budgets on X in 2025. This represents a sharp increase from the 14% who indicated they would pull funding in 2024, signaling an accelerating loss of advertiser trust.
Gonca Bubani, a director at Kantar, explained: "X has changed so much in recent years and can be unpredictable from one day to the next. It is difficult to feel confident about your brand safety in that environment."
Revenue Freefall
The impact of advertiser departures is already evident in X's financial performance. Since Musk's $44 billion acquisition in October 2022, advertising revenue has plummeted. Forecasts suggest X's global revenue could fall to $1.9 billion by the end of this year, less than half of its 2021 peak of $4.46 billion.
Musk's Controversial Leadership
Elon Musk's erratic behavior and controversial posts on X have fueled the advertiser backlash. His comments on sensitive topics like antisemitism, political unrest, and U.S. politics have raised concerns among marketers about brand safety and association.
Legal Battles and Global Challenges
Adding to X's woes, the platform faces legal challenges and regulatory issues in key markets. In a surprising move, X recently sued several major companies and a global advertising alliance, accusing them of unlawfully conspiring to boycott the platform.
Meanwhile, X has been banned in Brazil, one of its largest markets with over 20 million users, after refusing to comply with court orders to remove certain profiles and appoint a local legal representative.
X's Response
Despite the gloomy outlook, X maintains an optimistic stance. A spokesperson for the platform stated: "Advertisers know that X now offers stronger brand safety, performance and analytics capabilities than ever before, while seeing all-time-high levels of usage."
As the advertising landscape continues to shift, the future of X as a viable platform for marketers remains uncertain. The coming months will be critical in determining whether the platform can regain advertiser trust and reverse its declining fortunes.