30-11-2023 (SAN FRANCISCO) More advertisers are expected to withdraw their support from Elon Musk’s social media platform X following the billionaire’s verbal attack on prominent figures in the media industry. Analysts expressed this concern on Thursday after Walt Disney and Warner Bros. Discovery suspended their advertising on X earlier this month. Their decision came in response to Musk’s endorsement of an antisemitic post, which falsely accused members of the Jewish community of fueling hatred against white people.
During an event hosted by The New York Times DealBook on Wednesday, Musk apologized for his controversial post. However, he then went on to launch into an expletive-filled tirade against the advertisers who had chosen to abandon the platform. Musk acknowledged that an extensive boycott by advertisers could potentially bankrupt X, formerly known as Twitter. Nevertheless, he suggested that the public would assign blame to the brands rather than himself in the event of a collapse.
The company has faced criticism for its lackluster content moderation, particularly from advertisers who are concerned about their ads appearing alongside inappropriate content.
D.A. Davidson & Co analyst Tom Forte cautioned, “We believe there is a risk that more companies will cease advertising on X, at least in the short term.” He further emphasized the growing importance of the company’s subscription efforts, stating, “It is fair to say this makes the company’s subscription efforts more crucial and potentially necessitates generating over half of its revenue from subscriptions.”
According to Reuters, monthly ad revenue in the United States for X has seen a year-over-year decline of at least 55% each month since Musk acquired the company in October 2022.
“Musk has asserted that Twitter is worth significantly less than the $44 billion he paid for it. It is difficult to argue that this perception will change rapidly, especially if advertisers take great offense to what he expressed yesterday,” commented Russ Mould, investment director at AJ Bell.
