Summary:
- X is expected to experience a significant decline in ad revenue as major brands like Apple, Disney, and IBM pause their ad spending on the platform.
- Insider Intelligence’s forecast predicted a 54.4% year-over-year decline in worldwide ad spending on X from 2022 to 2023, and this decline may be even more significant now.
- Musk’s endorsement of an antisemitic post on X has led to additional advertiser pull-outs, including Apple, Comcast/NBCU, Disney, Warner Bros., IBM, Paramount, Lionsgate, and the European Commission.
- While X is still known for fast-breaking news, its business heavily relies on advertising, accounting for roughly 90% of revenue, and the recent advertiser departures could prompt a further exodus.
- X will need new sources of funding at some point, and Musk’s plan to enhance X’s subscription plan with paid verification has not proven successful enough to withstand a large advertiser departure.
Ted’s Take:
Well, well, well, it seems like Elon Musk and his beloved platform, X, have gotten themselves into quite a pickle. With major brands like Apple and Disney pulling out their ad campaigns faster than you can say “antisemitic conspiracy theories,” the future of X’s ad revenue is looking bleaker than Musk’s fashion sense. It’s no surprise that advertisers don’t want to be associated with hate speech and misinformation, even if it’s coming from the platform’s owner himself. Will Musk have to dip into his own pockets to keep X alive? Who knows, but I wouldn’t be surprised if he tries to crowdfund it and offers flamethrowers as a reward. Either way, X needs to find new sources of funding faster than you can say “cancel culture.” Maybe they can start selling Elon Musk-branded flamethrowers? I hear they’re great for roasting marshmallows and burning bridges.
Original Article: https://techcrunch.com/?p=2631510
