Advertisers said Thursday they did not plan to reopen their wallets anytime soon with X, the social media company formerly known as Twitter, after its owner, Elon Musk, insulted brands using a slur and told them not to spend on the platform.
At least half a dozen marketing agencies said the brands they represent were adamant against advertising on X, while others said they had advised advertisers to stop publishing anything on the platform. Some temporary pauses in spending that advertisers have enacted in recent weeks against X are likely to become permanent freezes, they added, and Musk’s comments give them no incentive to return.
Advertisers “won’t come back” to X, said Lou Paskalis, founder and CEO of AJL Advisory, a marketing consultancy. “There is no advertising value that can offset the reputational risk of returning to the platform.”
Musk has repeatedly criticized and distanced advertisers since he bought Twitter last year. At one point, he threatened to “thermonuclear name and shame” against advertisers who suspended spending because they were concerned about their plans to relax content moderation rules on X.
In recent weeks, more than 200 advertisers had stopped investing in X after Musk endorsed an anti-Semitic conspiracy theory and investigators drew attention to cases of ads appearing alongside pro-Nazi posts on the platform. The company, which has made most of its revenue from advertising, risks losing up to $75 million this quarter as brands pull back.
The situation escalated on Wednesday when Musk made inflammatory comments against advertisers at the DealBook Summit in New York. In a wide-ranging interview at the event, Musk apologized for the anti-Semitic post, calling it “one of the dumbest” he had ever posted, but also said advertisers were trying to “blackmail” him. He singled out Bob A. Iger, CEO of Disney, who also attended the DealBook Summit.
“Don’t advertise,” Musk then said, using an expletive several times to emphasize his point.
Hours later, Linda Yaccarino, CEO of X, attempted to mitigate the damage. In a post on X, she focused attention on Musk’s apology for associating himself with anti-Semitism and appealed to advertisers to come back.
“X is allowing an informational independence that is uncomfortable for some people,” Yaccarino said. wrote. “X sits at a unique and striking intersection between Free Speech and Main Street, and the X community is powerful and here to welcome you.”
A representative for X did not respond to a request for comment.
Ruben Schreurs, chief strategy officer at Ebiquity, a marketing and media consulting firm, said Yaccarino appeared to be trying to get brands to support X’s views on free speech. But advertisers are unlikely to step in to sponsor the social media platform’s goals, he said.
“It doesn’t resonate at all,” he said, adding that the pauses in spending seemed to “become an end to advertising at X.” Unless there is a change in leadership or control at the company, she added, advertisers are unlikely to consider returning to the platform.
Other marketers recommend that brands abandon X altogether. Tom Hespos, a veteran media planning executive who runs a consulting firm, Abydos Media, and works with clients in the healthcare and other industries with media budgets of up to $50 million, said he gave his first formal recommendation to a client that they not only stop spending on X, but also stop posting there.
“You cannot, in good conscience, recommend to a customer that they continue to be a part” of what Musk has done at X, Hespos said.
Musk’s pushback against advertisers highlights the challenges Yaccarino, an advertising industry veteran, faces as she tries to stabilize X’s revenue. Historically, the last three months of the year have been lucrative for X, as major advertisers They often launch campaigns for Black Friday, Cyber Monday, and holiday shopping.
Brands that have spent heavily on X and recently paused their campaigns include Apple, Disney and IBM. Other brands have remained, including the National Football League and the New York Times sports site, The Athletic.
At Wednesday’s DealBook event, Musk acknowledged that a prolonged advertiser boycott could put X out of business. But the public would blame the failure on the brands, he said, not him.
“I’m certainly not going to please,” he said.
Musk’s disregard for advertisers’ concerns has led brands to view him as a risky partner, said Steve Boehler, founder of marketing management consultancy Mercer Island Group.
Musk’s “comments suggest an outrageous amount of uncertainty regarding his platform, how he will partner with advertisers, and whether he even cares what advertisers think,” said Boehler, who works with clients spending between $10 million and $500 million. advertising dollars. annually. “This is personal too,” he added. “Companies are just full of people, and people like to be treated well, respected and treated with dignity.”
ryan mac contributed reports.
