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| Elon Musk |
Things keep getting worse for X. After witnessing plummeting revenue last year, the beleaguered advertising business at the social media site formerly known as Twitter is apparently suffering a similarly dismal 2024.
According to a report by business news website Quartz, X’s ad revenue has fallen about $238 million in the last year, with advertisers spending about $744 million on the site in the first half of 2024, accounting for a 24 percent drop from the $982 million advertisers spent on the platform during the first six months of 2023.
This follows reporting by the New York Times, which found that X saw a 25 percent decline in U.S. revenue in 2024’s first quarter and a 53 percent decline from the same period a year ago.
The Times reports that ads make up 90 percent of the X’s revenue.
X has been in an almost constant state of disarray since Musk assumed ownership of the platform in October 2022, with Musk’s policies and mercurial leadership style often cited as the source of the blame. Soon after acquiring the site, Musk cut an estimated 75 percent of the company’s staff, which resulted in a series of technical issues, as well as an uptick in spam and bot accounts that continue to plague the site. He then monetized Twitter’s blue-check verification and also revamped the site’s policies to remove speech restrictions and allowed users who had previously been banned from the site to return, making X a hotbed for misinformation and hate speech and resulting in an advertising exodus that has continued to date.
Musk’s attempts to woo advertisers back to the platform have largely fallen on deaf ears, and his prospects of turning around the company diminished even further when, in November 2023, he tweeted support for an antisemitic comment on the site, causing even more advertisers to flee the platform.
Musk appeared to resort to desperate measures in August when X filed an antitrust lawsuit against Global Alliance for Responsible Media, a nonprofit coalition formed by the World Federation of Advertisers to address harmful online content, which had allegedly recommended that members stop running ads on the site. The suit alleged that GARM had effectively enacted an advertising boycott of the platform, resulting in the loss of billions in ad revenue.
“We tried being nice for 2 years and got nothing but empty words. Now, it is war,” Musk wrote in an August tweet.
The lawsuit resulted in WFA announcing that it would suspend the GARM initiative.
In August, the World Bank ceased all advertising on the site after a CBS report discovered that one of its paid placements allegedly appeared below a post from a racist organization.
Also in August, the Wall Street Journal reported that the $13 billion in loans Musk took from seven banks to purchase Twitter have since remained “hung,” now resulting in “the worst merger-finance deal for banks since the 2008-09 financial crisis.”
User engagement on the platform is down as well. According to a report by OnlyAccounts.io, X’s user engagement rate dropped by 39 percent year-over-year, with accounts on the site also posting an average of 38 percent less than they did in 2023.
A July forecast by digital market research company eMarketer found that users will spend 3.8 percent less average daily time on the platform this year than in 2023.
According to a global survey of PR pros published earlier this year by PR software platform Prowly, X topped the list this year among marketing trends now considered “out.” Nearly a third (31 percent) of respondents said the social media site was no longer essential for PR pros to do their jobs.
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Aug. 29, 2024, by Bill Huey, Strategic Communications
That Elon Musk is some kind of bad businessman. If you can't woo advertisers, then sue them. I don't think Musk is cut out to head a consumer-facing business of any kind.