The Decline of X: Challenges and Potential for Growth under Musk's Ownership
Since billionaire Elon Musk acquired the social media platform formerly known as Twitter and rebranded it as X, monthly U.S. ad revenue has experienced a significant decline. This article explores the factors contributing to this decline and the potential business plans outlined by X's CEO, Linda Yaccarino, to revive the platform's fortunes.
Declining Ad Revenue
Third-party data obtained by Reuters reveals that monthly U.S. ad revenue at X has seen a year-over-year decline of at least 55% since Musk's takeover in October 2022. This downward trend has raised concerns among advertisers, leading to a loss of confidence in the platform's stability.
Struggles in Retaining Advertisers
X has faced challenges in retaining advertisers due to apprehensions surrounding the rapid changes implemented under Musk's ownership. Brands have been cautious about associating themselves with a platform undergoing such transformative shifts, resulting in a loss of ad revenue.
Meeting with Bank Lenders
To address these issues, X's CEO, Linda Yaccarino, is scheduled to meet with bank lenders who supported Musk's acquisition. The purpose of this meeting is to outline the company's business plans and strategies, aiming to regain the trust of advertisers and stabilize the platform's revenue streams.
Steepest Monthly Decline
According to ad analytics firm Guideline, U.S. ad revenue experienced a significant drop of 78% in December 2022 compared to the previous year. This represents the most substantial monthly decline since Musk's acquisition, highlighting the challenges faced by X under its new ownership.
Musk's Perspective and Blame Game
Elon Musk has acknowledged the revenue setbacks faced by X, attributing them to pressure from activists who have influenced advertisers' decisions. He specifically accused the Anti-Defamation League (ADL) of being a primary cause behind the 60% decline in U.S. ad revenue. However, the ADL has refuted these allegations, stating that they are false and expressing their willingness to advertise on X to combat hate.
Potential for Recovery
Despite the challenges, X's CEO remains optimistic about the platform's future. Yaccarino stated that 1,500 brands have returned to X in the previous 12 weeks, with 90% of the top 100 advertisers back on board. She also expressed confidence in X's ability to turn a profit by early next year, emphasizing the potential for growth and profitability through strategic initiatives.
