The Elon Musk-owned social media platform X is reportedly at risk of losing up to $75 million in advertising revenue by the end of the year as numerous major brands suspend their marketing campaigns on the site, according to a New York Times report on Friday.
The catalyst for this exodus was Musk’s endorsement of an antisemitic post on the platform last week, prompting several companies, including industry giants like Walt Disney and Warner Bros Discovery, to halt their advertisements on what was formerly known as Twitter.
In response to the adverse impact on its revenue, X has taken legal action against media watchdog group Media Matters. The platform alleges that the organization defamed X with a report claiming that ads for prominent brands, such as Apple and Oracle, appeared next to posts endorsing Adolf Hitler and the Nazi party.
Internal documents reviewed by The New York Times revealed a list of over 200 ad units from companies like Airbnb, Amazon, Coca-Cola, and Microsoft, many of which have either halted their advertising or are contemplating doing so on the social network.
As of Friday, X acknowledged that $11 million in revenue was at risk. The exact figure fluctuates as some advertisers return to the platform, while others increase their spending, according to the report. The company has not yet responded to Reuters’ request for comment on the matter.
The advertiser exodus from X has been ongoing since Elon Musk acquired the platform in October 2022 and implemented a reduction in content moderation. This shift has resulted in a notable surge in hate speech on the site, as reported by civil rights groups. The platform’s U.S. ad revenue has seen a consistent decline of at least 55% year-over-year each month since Musk’s takeover.
As X grapples with the financial repercussions of the advertiser exodus, the platform’s future trajectory remains uncertain amidst the ongoing legal battles and the need for effective content moderation to regain advertisers’ trust.
