Monthly U.S. ad revenue at the social media platform X has consistently dropped by over 55% year-over-year since Elon Musk acquired the platform, formerly known as Twitter, in October 2022, based on third-party data disclosed to Reuters.
The decline can be attributed to challenges in retaining advertisers post-takeover, as Musk’s rapid changes raised concerns among brands. To address these issues, X’s CEO, Linda Yaccarino, is expected to meet with bank lenders to discuss future business plans. The sharpest decline in ad revenue, a staggering 78%, was recorded in December 2022 compared to the previous year.
In August, the most recent data available, ad revenue saw a 60% year-over-year decline. While X has not commented on the data, Musk has publicly acknowledged the revenue slump and has partially attributed it to activists who have pressured advertisers. Specifically, he accused the Anti-Defamation League (ADL) of being a primary factor behind a 60% decline in U.S. ad revenue in the past, although he didn’t specify a timeframe.
In response, the ADL denied any responsibility for X’s losses and expressed its readiness to advertise on the platform to convey its anti-hate message to users. Despite these challenges, Yaccarino revealed that 1,500 brands had returned to the platform in the last 12 weeks, and 90% of the top 100 advertisers are back on X. She anticipates that X could return to profitability by early next year.
Musk’s strategy to rebrand Twitter as X in July aimed to transform the platform into an “everything app,” offering a wide range of services beyond social networking, similar to China’s WeChat. These plans include introducing peer-to-peer payment features and increasing the volume of video content on the platform.
It’s evident that the post-takeover period for X has been marked by significant turbulence, particularly in terms of declining ad revenue. However, the platform’s ability to attract back a substantial number of brands and advertisers in recent weeks indicates a potential path to recovery. Musk’s ambitious plans to diversify X’s offerings beyond social media could prove pivotal in reinvigorating the platform and recouping its financial standing.