Several major brands are withdrawing their paid advertising from social media platform X in order to distance themselves from its new owner, following his endorsement of an antisemitic post.
In the post, Elon Musk referred to claims that Jews "have been pushing the exact kind of dialectical hatred against whites that they claim to want people to stop using against them" as "the actual truth." This statement has caused significant backlash from companies that are among the platform's top advertisers.
As a result, Apple, Disney, Coca Cola, and other major companies have taken the step of removing their paid ads from the platform. According to a report by The New York Times, this move could potentially cost X up to $75 million in revenue.
Mac, an industry expert, commented on the situation, saying, "Now, after these comments, after this one post he made engaging a white nationalist conspiracy theory, advertisers are pulling back in the most important holiday period for any company that does advertising."
Ad sales weakened immediately following Musk's takeover of the platform, previously known as Twitter, last year. However, the losses could be even greater than what executives had predicted.
In the United States, ad revenue decreased by 60% during the summer, according to Mac. The recent reduction in spending occurred during the crucial holiday shopping season, when retailers typically increase their ad spending.
"It accounts for 90% of the company's revenue, so this is a significant blow to the company," Mac added.
Ambivalent Relationship
Advertisers are attracted to social media platforms like X due to the large number of users and the frequency of their interactions on the site. For this reason, Mac stated that many companies have what he referred to as a "love-hate relationship with X."
When reached for comment, X confirmed that some brands have paused their advertising spend, while also questioning their motives.
"These brands also know how essential X is for connecting with their communities," X told CBS MoneyWatch. "Instead, they are simply posting 'ads' for free to continue engaging with their respective communities," the company said, referring to brands like Amazon, DisneyPlus, and others that have paused or are considering pausing paid advertising on the platform, but are still posting content on their brand-owned X accounts.
Musk in May appointed veteran advertising executive Linda Yaccarino as CEO of X, then called Twitter, to convince big brands to return to the social media service following a loss of advertisers after his takeover.
