X could potentially lose as much as $75 million in advertising revenue by the end of the year due to the pause in marketing campaigns by numerous major brands. This comes after the owner of X, Elon Musk, endorsed an antisemitic conspiracy theory earlier this month, leading to concerns from companies such as IBM, Apple, and Disney, which have already paused their advertising campaigns on the platform.
Internal documents from X’s sales team reveal that the company is facing a more challenging situation than previously known. The concerns about Mr. Musk and the platform have extended beyond the companies that have paused their advertising, with many other major brands considering pausing their ads on the social network.
The documents from X’s sales team are tracking the impact of the advertising pauses this month, indicating how much ad revenue the company could potentially lose through the end of the year if advertisers do not return.
X stated on Friday that $11 million in revenue was at risk, and the exact figure fluctuated as some advertisers returned to the platform and others increased spending. The company mentioned that the numbers viewed by The New York Times were either outdated or represented an internal exercise to evaluate total risk.
The advertising freezes come at a crucial time, as the final three months of the year are traditionally X’s strongest quarter due to holiday promotions for events like Black Friday and Cyber Monday. The company’s revenue heavily relies on advertising during this period, with nearly 90 percent of its revenue coming from advertising in the last three months of 2021.
Since Elon Musk’s acquisition of X last year, some brands have been hesitant to advertise on the platform due to concerns about his behavior and content moderation decisions. This has led to a significant decrease in U.S. advertising on the platform this year, prompting the company to make efforts to persuade advertisers to return, particularly during the holiday period.
However, the documents reveal that this campaign has not been successful. More than 100 brands have “fully paused” their ads, and dozens of others are at risk of doing the same. Many of these pauses occurred after Mr. Musk’s controversial post on X regarding an antisemitic conspiracy theory.
According to Leesha Anderson, the vice president of digital marketing and social media at the advertising agency Outcast, their clients steadily stopped spending on X after Mr. Musk took over and found alternatives on platforms like LinkedIn and TikTok.
The companies that have paused their ads on X range from political campaigns to fast food chains to tech giants. For example, Airbnb halted more than $1 million of advertising, while Uber cut back on ads worth more than $800,000 in U.S. and international markets. Other major brands, including Jack in the Box, Coca-Cola, and Netflix, also paused some of their campaigns.
Various subsidiaries of Microsoft have also stopped advertising, potentially leading to a loss of more than $4 million in revenue for X’s fourth quarter, based on the documents. Amazon’s units for books and music and one subsidiary of Google have also paused spending on the platform.
This situation has sparked controversy, with some figures like Republican presidential candidate Chris Christie calling Mr. Musk’s comment part of a recent outpouring of an “outrageous type of hate.”
In response, X’s chief executive, Linda Yaccarino, has taken a defiant stance, attributing the company’s problems to a report by the left-wing media watchdog group Media Matters. She has emphasized that X is a supporter of free speech and stands in solidarity with those who believe in this fundamental right and the critical checks and balances of a thriving democracy.
Despite the challenges, X’s billionaire owner, Elon Musk, has celebrated the companies that have continued to advertise on the platform and has also announced that the company will donate all revenue from advertising related to the conflict in Gaza to hospitals in Israel and the Red Cross/Crescent in Gaza.
Tiffany Hsu contributed reporting.
