Social network X, formerly Twitter, could lose up to US$75 million in advertising revenue by the end of the year, as dozens of major brands suspended or canceled their marketing campaigns after the of the platform, Elon Musk, endorsing an anti-Semitic conspiracy theory this month.
Internal documents seen by The New York Times this week show that the company is in a more difficult position than previously known and that concerns about Musk and the platform have spread far beyond companies like IBM, Apple and Disney, which have suspended advertisements on X last week.
The documents list more than 200 listings from companies including Airbnb, Amazon, Coca-Cola and Microsoft, many of which have stopped or are considering suspending their ads on the social network.
The information comes from the X sales team and aims to track the impact of problems with advertising this month, including companies that have already announced measures against the social network and others that may follow the same path. The documents list how much advertising revenue has already been lost and how much it could reach, according to an assessment by X employees.
On Friday, the social network said in a statement that US$11 million (R$53.9 million) in revenue was at risk and that the exact amount fluctuated as some advertisers returned to the platform and others increased spending. The company said the numbers seen by The New York Times were either outdated or part of an internal exercise to assess total risk.
The advertising suspensions come in the last quarter of the year, which is traditionally the social network’s three strongest months, as brands run holiday promotions for events like Black Friday and Cyber Monday.
In the last three months of 2021 — the last year the company reported fourth-quarter results before Elon Musk took control — the company reported $1.57 billion in revenue, nearly 90% of which came from advertising.
Since Musk acquired the former Twitter for $44 billion last year, some brands have been hesitant to advertise on the platform, concerned about the new owner’s behavior and content moderation decisions, which have led to a rise in hateful and accusations of fake news.
Advertising in the US on this social network fell almost 60% for the year, leading the company to try to win back advertisers in an effort led by its CEO, Linda Yaccarino. OX is also campaigning for advertisers to return during the holiday season to offset revenue declines earlier in the year.
However, the documents reveal that this has not worked. More than a hundred brands are shown as having “completely suspended” their advertising, while dozens more are listed as “at risk.” Many of them made the decision to pause after November 15, when Musk wrote in an X post that the conspiracy theory that Jews supported minority immigration to replace white populations was “the real truth.”
Leesha Anderson, vice president of digital marketing and social media at advertising agency Outcast, said her clients gradually stopped spending on X after Musk took control and found alternatives on platforms like LinkedIn and TikTok.
“In today’s dynamic marketplace, advertisers have a multitude of options at their disposal for precise audience targeting,” said Anderson. “Therefore, it is critical that administrators and owners of social platforms exercise discretion in all aspects, be it their personal beliefs or political positions, as these choices will inevitably be subject to public opinion.”
Ads worth more than $1 million suspended
Companies that have suspended their ads on X range from political campaigns to fast food chains and technology giants, according to the documents. For example, Airbnb halted more than $1 million in advertising, while Uber reduced ads by more than $800,000, halting campaigns in US and international markets. Both technology companies declined to comment.
Other major brands, including burger chain Jack in the Box, Coca-Cola and Netflix, have suspended some of their campaigns. According to X’s estimates, Netflix’s interrupted ads were worth nearly $3 million. The three companies mentioned did not respond to requests for comment.
Several Microsoft subsidiaries have also stopped advertising — which could result in a potential loss of more than $4 million (R$19.6 million) in revenue for X’s fourth quarter, based on the documents — as have Microsoft units. of Amazon for books and music and a subsidiary of Google. The search giant and some other brands that paused spending, including NBC Universal, have continued to publish content on the platform without paying X to ensure posts reach a larger audience.
Google and Microsoft declined to comment. Amazon did not respond to requests for comment.
On NBC’s “Meet the Press” program last Sunday, Republican presidential candidate Chris Christie called Musk’s comment part of a recent wave of an “outrageous type of hate.”
“Whether it’s Elon Musk, whether it’s teachers on our college campuses or the students they’re scamming, these are individuals who are expressing themselves in anti-Semitic ways on the streets of our cities,” Christie said.
Two days before Christie’s TV appearance, a political group that supports him called Tell It Like It Is pulled its advertising from X, according to the documents. A representative for the political fundraising group did not respond to a request for comment.
In an internal meeting with X employees this week, Yaccarino explains a challenging moment. She did not mention Musk’s endorsement of the anti-Semitic post and attributed the company’s problems to a report from left-leaning media monitoring group Media Matters, which showed that ads on X from companies including IBM and Apple appeared alongside posts promoting nationalist content. white and Nazi.
On Monday, after Musk called Media Matters “an evil organization,” X sued the group and argued that its report, which was published after the social network’s new owner declared, “manipulated the algorithms that govern the user experience on X to bypass safeguards and image posts from X’s largest advertisers alongside racist and incendiary content.” Yaccarino blamed the Media Matters report for the drop in ad sales.
“Being subservient to external criticism or pressure is simply not how X will ever operate,” she wrote in an email to X employees on Wednesday. “The people of X are defenders of free speech. We stand in solidarity with those who believe in this fundamental right and in the checks and balances critical to a thriving democracy.”
Earlier this week, Musk spent time celebrating companies that have continued to advertise on X, including the NFL. Using a heart emoji, the billionaire owner of X said he loved the NFL.
Musk also announced that the company would donate “all advertising and subscription revenue associated with the war in Gaza to hospitals in Israel and the Red Cross/Red Crescent in Gaza.” Funding will include revenue from advertisements purchased by charitable groups, news organizations and other groups that have advertised content related to the conflict.
Following his boss, Yaccarino added an appeal to Musk’s original post with a plea. “Contribute and help,” he posted on social media.