Major Brands Withdraw from X Amid Antisemitic Content Concerns, Foreseeing $75M Revenue Decline

Major Brands Withdraw from X Amid Antisemitic Content Concerns, Foreseeing $75M Revenue Decline

Crypto News – Elon Musk‘s social media platform, X, formerly known as Twitter, is facing a potential $75 million blow in advertising revenue as a host of major brands, including industry heavyweights like Microsoft, Airbnb, and Coca-Cola, are considering pulling back their ad spend. This development follows Musk’s involvement in propagating controversial antisemitic content, which has not only garnered widespread attention but also prompted serious concerns about the platform’s direction under his leadership.

Internal documents, highlighted by The New York Times, shed light on the extent of the issue. These documents reveal the precarious position of X in the wake of legal battles with Media Matters, stemming directly from the platform’s controversial content policies.

A deeper dive into these reports suggests that by the end of 2023, X could see a significant reduction in its advertising income. The anticipated financial hit is attributed to the withdrawal of several key advertisers, seemingly in response to Musk’s latest foray into antisemitic narratives.

Earlier reports by CoinGape media indicated that tech titans like IBM and Apple had already suspended their advertising activities on X, citing similar concerns over antisemitic content. The New York Times’ examination of recent internal records points to even greater challenges than previously known. Beyond the worries associated with IBM, Apple, and Disney, who recently paused their ads on X, the documents list over 200 advertising units from various companies, including Airbnb, Amazon, Coca-Cola, and Microsoft. Many of these companies have either already suspended or are contemplating a halt in their advertising on the social network.

X, in a Friday statement, acknowledged that about $11 million in revenue was at risk, a figure that fluctuates as some advertisers resume activities while others increase their spending.

The timing of these advertising suspensions is crucial, coinciding with the last quarter of the year, which is usually the peak season for ad revenues due to holiday promotions like Black Friday and Cyber Monday. To put this in perspective, in the final quarter of 2021, under its previous leadership before Musk’s takeover, X reported a whopping $1.57 billion in advertising revenue, with a substantial 90 percent coming from ad sales.

However, following Musk’s $44 billion acquisition, the platform has seen a notable reluctance from brands to continue advertising, spurred by concerns over Musk’s unpredictable behavior and questionable content moderation decisions. This has led to an increase in inflammatory and hateful content on the platform.

The U.S. advertising sector has reported a nearly 60 percent decline on the platform this year, prompting a concerted effort by the company’s CEO, Linda Yaccarino, to win back advertisers. Despite this, and running ad campaigns aimed at mitigating revenue shortfalls during the holiday season, the challenges remain significant. Documents reveal that over 100 brands are marked as having “fully paused” their ads, with many others categorized as “at risk.”

A significant number of these advertising pauses align with Musk’s controversial statements on X, where he endorsed a conspiracy theory about Jewish people supporting immigration to replace white populations, a statement he claimed to be “the actual truth.” This has added to the growing concern and hesitation among advertisers about continuing their association with the platform.