X aims to serve small and medium businesses as major advertisers withdraw funds
Prominent advertisers such as Disney, IBM, and Apple continue to withhold ad spending from Elon Musk’s X, even two weeks after Musk endorsed an antisemitic tweet and two days after his profanity-laden outburst expressing his sentiments about the pullback. Marketing agencies are also scaling back their involvement. In response, X has articulated its intention to attract smaller and medium-sized businesses to bolster its revenue.
A statement provided to the Financial Times on Friday emphasized, “Small and medium businesses are a very significant engine that we have definitely underplayed for a long time. It [was] always part of the plan – now we will go even further with it.
In the previous month, several globally recognized brands suspended spending on X following Elon Musk’s endorsement of a controversial post. On Wednesday, Musk responded to the boycotters, urging them to “go” and accusing them of attempting “blackmail” by withholding advertising to coerce him into implementing more extensive content moderation.
During the New York Times’ DealBook event, Musk declared, “I will certainly not pander” to major advertisers and cautioned them about potential accountability if X were to face a downturn. Recently, the New York Times, citing leaked documents, indicated that X was at risk of losing up to $75 million this quarter. Contrarily, the company informed the Financial Times that it estimated the decline in ad revenue to be between $10 million and $12 million. Half a dozen marketing agencies informed the Times that they had no intentions of returning to X.
Steve Boehler, the founder of the marketing management consultancy Mercer Island Group, remarked to the Times that Musk’s comments “suggest an outrageous amount of uncertainty regarding his platform, how he will partner with advertisers, and whether he even cares about what advertisers think.
Boehler added, “This is also personal. Businesses are simply full of people, and people like to be treated well, respected, and dealt with with dignity.”
However, Musk, who apologized on Wednesday for what he deemed his “dumbest” ever social media post, has unexpectedly garnered support.
Bill Ackman, the billionaire hedge fund manager and founder of Pershing Square Capital Management, who had previously threatened to blacklist Harvard students for signing a letter blaming Israel for an attack by Hamas, stated on Friday that Musk’s interview at the event was “one of the great interviews ever.
Musk embraces free speech absolutism, a stance I respect. I believe he’s entirely correct in asserting that he and X face unfair and inconsistent treatment from advertisers, Ackman expressed on X.
He noted that other platforms, such as TikTok, Instagram, and Facebook, also harbor “enormous amounts of problematic content, antisemitic and otherwise,” yet advertisers don’t initiate boycotts against those platforms.
Ackman rationalized that Musk has become a target “because other media organizations perceive X as a competitor, and any mention of his name in articles about controversies attracts clicks.” Mainstream media organizations are “incentivized to attack him,” he added.
The outspoken hedge fund manager also expressed skepticism about Musk’s post being antisemitic. “After examining the facts, it was clear to me that Musk did not have antisemitic intent when he responded with the ‘actual truth’ tweet and further clarified thereafter.
While Pershing Square has an investment in X, Ackman emphasized that making a profit “is not important.” He indicated a stronger inclination to favor and support companies advertising on the platform due to his appreciation for their support of free speech.
