Advertisers Cutting Spending on X Due to Elon Musk’s Controversial Decisions

Major brands are reevaluating their advertising strategies on X as Elon Musk's controversial decisions continue to impact the platform.

Impact of Elon Musk's Policies

Elon Musk's tolerance for what he deems as "toxic content" on X has prompted advertisers to reconsider their investments. Market research conducted by Kantar revealed that over a quarter of advertisers are planning to reduce their spending on X in 2025.

Adverse Effects on Advertisers

Since Musk assumed control of X in 2022, several major brands have withdrawn their advertising content from the platform. Musk's stance on free speech, even at the expense of hosting controversial content, has led to a backlash from advertisers.

Findings from Kantar Research

Kantar's survey of 1,000 marketing professionals from ad agencies and media companies highlighted a lack of confidence in X's advertising environment. Only 4% of respondents believed that X provides a safe space for brand promotions, compared to 39% for Google.

The study also noted a significant decline in marketers' trust in X advertisements, dropping from 22% to 12% since 2022. Despite this, consumer preference for X ads has reportedly increased substantially.

Advertiser Exodus

Following Musk's controversial decisions, renowned companies such as Disney, Apple, IBM, Warner Bros. Discovery, and Lionsgate have halted their advertising expenditure on X. This move came after Musk seemingly endorsed objectionable content on the platform, prompting a wave of ad withdrawals.

Legal Battles and Backlash

In response to the advertising exodus, X initiated legal action against a group of advertisers in August, alleging antitrust violations related to an organized boycott. Musk's confrontational response to companies pulling out of X further fueled the controversy, with his explicit comments during an interview at The New York Times' DealBook Summit.

Despite attempts to address the situation, X's reputation among advertisers has been significantly tarnished, leading to a reevaluation of advertising strategies and expenditures on the platform.

—————————————————————————————————————————————
By: jmann@insider.com (Jyoti Mann)
Title: Advertisers Cutting Spending on X Due to Elon Musk’s Controversial Decisions
Sourced From: www.businessinsider.com/elon-musk-x-advertisers-plan-to-pull-back-spending-survey-2024-9
Published Date: Thu, 05 Sep 2024 10:40:53 +0000