X is a social network that has seen many changes and faced many challenges. In the past year, many big brands have pulled advertising from X resulting in a big drop in revenue. So what is X doing to get advertisers back to advertising on the platform?

Why Are Companies Not Advertising on X & What Are They Doing About It?

advertising-problems-for-x

Why Are Companies Not Advertising on X &amp; What Are They Doing About It?

[[p]]The journey for social network [[a href="https://digitalmarketinginstitute.com/blog/how-to-use-twitter-for-business" target="_blank"]]X[[/a]] (formerly Twitter) has not been a smooth one over the past few years.&nbsp;[[/p]]

[[p]]Since it was acquired by Elon Musk in 2022, the social network has seen a name change, mass layoffs, the return of banned users, a 18% drop in monthly users, and a loss in 71% of its value.&nbsp;[[/p]]

[[p]]If that wasn&rsquo;t enough to contend with, X is also being criticized for enabling the increased spread of disinformation and offensive content.&nbsp;[[/p]]

[[p]]As a result, [[a href="https://sensortower.com/blog/top-advertisers-flee-x-twitter-amidst-continued-controversy" target="_blank"]]Sensor Tower data[[/a]] reported that 50 of the top 100 U.S advertisers on X have ceased ad spending, including Apple, Coca-Cola, Disney, IBM, Lionsgate and most recently, the World Bank. In addition, the supreme court in [[a href="https://theconversation.com/brazil-just-banned-x-could-other-countries-follow-suit-237960" target="_blank"]]Brazil has banned the platform[[/a]] - no small token in a country that had almost 20 million X users.[[/p]]

[[p]]But we all know that social networks rely on paid advertising. It&rsquo;s a revenue stream that can be very lucrative if done correctly. In 2023 alone, Statista stated that Facebook reaped in $36.3 billion in the U.S.[[/p]]

[[p]]So how has X responded to big brands pulling advertising and what steps is the platform taking to lure them back?&nbsp;[[/p]]

[[p]]In November 2023 some brands announced they would suspend all advertising on X after owner Elon Musk endorsed an antisemitic conspiracy theory.&nbsp;[[/p]]

[[p]]Other brands soon followed suit as they reported their ads being placed alongside Pro-Nazi and white nationalist content.&nbsp;&nbsp;[[/p]]

[[p]]In response, Musk apologized for the post.&nbsp;[[/p]]

[[p]]"I&#39;m sorry for that post," Musk said. "It was foolish of me. Of the 30,000 it might be literally the worst and dumbest post I&#39;ve ever done.&rdquo;[[/p]]

[[p]]However, weeks later at the annual [[a href="https://abcnews.go.com/Business/elon-musk-apologizes-antisemitic-tweet-crudely-attacks-advertisers/story" target="_blank"]]New York Times DealBook Summit[[/a]], he accused the brands that took the stance of &ldquo;using blackmail&rdquo;.&nbsp;[[/p]]

[[p]]Since then the situation has not improved. Companies have not returned to advertise on X and Musk sued media watchdog group, Media Matters, over its report that the platform displayed companies&#39; ads alongside Nazi content.[[/p]]

[[p]]Another lawsuit was filed more recently against the Global Alliance for Responsible Media (GARM), a coalition made up of major advertisers, for &ldquo;collectively withholding billions of dollars in advertising revenue&rdquo;.&nbsp;[[/p]]

[[p]]As a result of the suit, The World Federation of Advertisers suspended GARM. Linda Yaccarino, CEO of X posted on the platform to celebrate GARM&#39;s end.&nbsp;[[/p]]

Tweet from X's CMO on the suspension of GARM

[[p]]It&rsquo;s clear there&rsquo;s a lot that X has to contend with in the advertising space, so what are they doing about it?&nbsp;[[/p]]

[[p]]Ad sales currently make up between 70% and 75% of X&rsquo;s total revenue according to a [[a href="https://fortune.com/2023/12/12/elon-musks-x-is-seeing-ad-revenue-plunge-by-half-from-prior-years-and-is-expected-to-bring-in-just-2-5b-this-year/" target="_blank"]]Fortune article[[/a]]. This means that advertising is crucial to the survival and growth of the platform.&nbsp;[[/p]]

[[p]]The first initiative X has launched is [[a href="https://blog.x.com/en_us/topics/company/2023/creator-targeting" target="_blank"]]&lsquo;Creator Targeting&rsquo;[[/a]]. This is a feature that allows advertisers to run ads next to a curated list of content creators.&nbsp;&nbsp;[[/p]]

[[p]]What this means is that advertisers have more control over the content they are placed beside - so they avoid having ads placed next to content that is offensive or controversial.&nbsp;[[/p]]

[[p]]By using the self-serve &lsquo;X Ads Manager&rsquo;, companies can run pre-roll video ads against the video content of their chosen creator/s.&nbsp;[[/p]]

[[p]]According to Yaccarino, X has already paid out $20 million to content creators. While Musk is trying to lure creators to the platform with new ways to earn money such as getting a share of ad revenue from posts.[[/p]]

[[p]]YouTube sensation, Mr. Beast caused a stir (and made a lot of money) when he posted a video on X. Despite the results, he claimed the revenue was a &lsquo;bit of a facade&rsquo;.&nbsp;&nbsp;[[/p]]

[[p]]Launched in 2024, X&rsquo;s AI-powered product, [[a href="https://x.com/XBusiness/status/1813952069251866726" target="_blank"]]&lsquo;Trend Genius&rsquo;[[/a]] is designed to help advertisers tap into trending events.&nbsp;[[/p]]

[[p]]This means brands can choose topics they want to align with such as the Olympics, music, fashion, the U.S election or anything in-between.&nbsp;[[/p]]

[[p]]So when conversation about these topics organically reaches a heightened level or &lsquo;velocity&rsquo;, an ad featuring preprogrammed creative will launch on the platform. Also, when the conversation calms down and stabilizes, the ad is automatically turned off.[[/p]]

[[p]]According to X, this &ldquo;aims to maximize relevance of the paid ad creative on X, while minimizing &ldquo;waste&rdquo;.[[/p]]

[[p]][[strong]]I[[/strong]]n 2024, X reversed a ban on political advertising that had been brought in by its former chief executive Jack Dorsey. This was designed to align with Musk&rsquo;s stance as a &ldquo;free speech absolutist&rdquo; but also to boost ad revenue.[[/p]]

[[p]]X&rsquo;s CEO, Linda Yaccarino has told industry figures she was aiming for the platform to bring in $100 million annually in political ad revenues in a big election year according to a Financial Times (FT) article.&nbsp;&nbsp;[[/p]]

[[p]]But political experts are skeptical about the efficacy of ads on X.&nbsp;[[/p]]

[[p]][[em]]&ldquo;Our results on the site are weaker than they were in the first half of the year,&rdquo;[[/em]] said Mike Nellis, chief executive of Democratic ad group Authentic. [[em]]&ldquo;We believe this is because Elon is driving moderates and progressives off the site. If our target audience isn&rsquo;t reachable on X, there&rsquo;s no reason to spend any more.&rdquo;&nbsp;[[/em]][[/p]]

[[p]]X has not released revenue targets for political advertising but it is growing its sales team in this area and said it had been working on improving its targeting.&nbsp;[[/p]]

[[p]]Following the fallout with big brand advertisers, Musk mentioned a focus on small and medium sized businesses (SMBs) to make up for the revenue fall.&nbsp;[[/p]]

[[p]]A tie-up with marketing firm JumpCrew is reported by the FT to have been accelerated to outsource some ad sales to target SMBs.[[/p]]

[[p]]One former X senior sales executive said Musk would need to make a choice between keeping a large ads team or moving towards cheaper solutions, such as further outsourcing sales and adopting a &ldquo;self-service small business platform&rdquo;.[[/p]]

[[p]]However such a shift would be difficult as X&rsquo;s ads platform for businesses lags behind rivals such as Google, Meta, and TikTok.&nbsp;[[/p]]

[[p]][[em]]&ldquo;Small and medium businesses are a very significant engine that we have definitely underplayed for a long time,&rdquo; [[/em]]an X representative told the FT. [[em]]&ldquo;It [was] always part of the plan &mdash; now we will go even further with it.&rdquo;[[/em]][[/p]]

[[p]]X has relaunched its &#39;Flight School&#39; ads education platform as [[a href="https://www.xadsacademy.com/student/catalog" target="_blank"]]&lsquo;Ads Academy&rsquo;[[/a]] for people who want to improve their X ads knowledge.[[/p]]

[[p]]Ads Academy is an e-learning platform designed to help businesses and marketers create effective ad campaigns on the network.&nbsp;[[/p]]

[[p]]There are 31 courses and four certifications at beginner and intermediate levels that cover topics such as &lsquo;Ads Manager Fundamentals&rsquo;, &lsquo;Conversion Tracking&rsquo;, and &lsquo;Mobile App Campaigns&rsquo;.[[/p]]

[[p]]The boycott of advertising on X by major brands has been a huge blow to the company and there&rsquo;s no signs of it abating.&nbsp;[[/p]]

[[p]]With other social networks having more advanced and targeted ad platforms, the company will need to focus on features and updates that can be effective for businesses.&nbsp;&nbsp;[[/p]]

[[p]][[em]]&ldquo;X are trying to make the platform easier and friendlier to attract new advertisers. They improved the UX and the ease to launch a campaign. You also have a lot of different targeting options and parameters that you could apply for building audiences,&rdquo;[[/em]] Marketing expert, Chris Orzechowski told Forbes. [[em]]&ldquo;There&#39;s a push for more video and they&#39;ve also been launching new integrations."[[/em]][[/p]]

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Why Are Companies Not Advertising on X & What Are They Doing About It?

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