Summary
Elon Musk’s recent attack on companies that have pulled advertising from his platform X threatens its existence. Some advertisers who withdrew from the site are facing criticism from the boycotters. Other social media platforms and advertising technology companies are benefiting from X’s loss of advertisers.
Walmart Leaves X
Retail giant Walmart became the latest company to pull advertising funds from X on Friday, according to Reuters, in an escalating move that threatens the platform’s future. Companies like Apple, Warner Bros, Comcast, and IBM are among others draining the platform of its capital.
Disney Faces Some Initial Criticism
The founder of Tesla and SpaceX has a fanbase, and the division between corporate advertising and his defense of “personal freedom” has implications for the electric car maker and several other companies. The first company in the crossfire is Disney, which pulled ads from the site after Musk’s tweets in November and reduced its posting on its main account.
X’s Profitability Issues May Worsen Significantly
X could lose up to $75 million in revenue by the end of the year, as around 200 companies including Airbnb, Amazon, Coca-Cola, and Microsoft have halted or are considering pulling their ads from the platform, according to a New York Times report. X estimated the figure to be around $11 million, but that was before Musk’s infamous interview at the event this week.
Will Ad Dollars Shift to Meta and Snap?
The advertising revenue fleeing the X app may find a home on other social media platforms like Meta Platforms or Snap Inc. However, advertisers’ concerns about brand safety are not limited to X alone.
Some Advertising Technology Companies May Benefit
With a focus on brand safety, advertising technology companies that offer these services may benefit. Companies like Integrated Ad Science and DoubleVerify may find themselves in demand.
These are some of the impacts that Musk’s ire against X advertisers could have on Disney, Meta, and other companies. We should watch how things unfold in the future and whether there will be further changes in the advertising industry.
Source: https://www.investopedia.com/how-musk-s-tirade-against-advertisers-affect-disney-meta-8409792
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