Elon Musk’s purchase of Twitter, now known as X, as well as his theatrics, have caused a rollercoaster of a ride for advertisers, as well as users of the social media platform (heck, even throw in current and former employees too) who are concerned about their image, reputation and overall brand. This idea is known as brand safety, and X has seen a decrease in brand safety for companies that will likely continue through 2024.
The growing aversion to X was highlighted last week by investment firm Fidelity, which helped Musk buy Twitter for $44 billion, when it revealed that X is worth about 71.5% less than at the time of purchase in 2022. That’s a staggering percentage loss that equates X to having a current value of $12.5 billion (still quite valuable but almost $32 billion less than just over a year ago).
The loss however, is not due just to Musk’s purchase of the platform. People have known for a long time that the billionaire has a penchant for being outspoken, and what he says on social media can be offensive.
Musk has not shied away from typing his mind on X, but proclivities such as these, combined with a recent endorsement of anti-Semitic conspiracies on the platform, have alienated both advertisers and users (though he later denied any anti-Semitism due to the backlash).
Nevertheless, companies like Disney, IBM, Warner Bros., FOX Sports and several others, have pulled advertisements from X out of concerns for brand safety and making sure their image aligns with a strong reputation – these companies feared that their ads would pop up next to hate speech on the platform, and no one wants that.
Pulling advertisements is a move that would hit X where it hurts since X makes 90% of its revenue from ad dollars.
Yet, Musk being Musk, told these companies to “Go f*** yourself” during an interview at The New York Times’ Dealbook Summit at the end of November.
Musk is probably thinking, “Meh, it’s just pennies” to him, as he ignores those employed by the companies, as well as the millions of users who rely on X – not just for sharing updates, but for reaching and engaging with audiences – you know, public relations and marketing.
Back at the end of 2022, Insider Intelligence predicted the loss in users would come: “Following essentially flat growth in 2022, amounting to 368.4 million monthly active users worldwide, Twitter’s user base will drop 3.9% in 2023 to 353.9 million users. This is the first time we’ve predicted a drop in worldwide Twitter users since we began tracking the company in 2008. In 2024, its global user base will then drop another 5.1% to 335.7 million. That’s a loss of 32.7 million users in two years.”
Not good at all.
Yet, despite these losses, as well as Musk’s displeasing comments, X can still be useful for organizations needing free social media tools to support their PR efforts.
It’s hard to beat the potential reach X can offer businesses and non-profits, but at the same time, it’s hard for many to stay with a business that is run by such a disagreeable person.
As we move through 2024, no one should be surprised if X continues its fall into disrepair – losing advertisers, dollars and users – while other social media platforms (whether that’s Instagram or TikTok, or the slowly emerging decentralized platforms) see more growth in these three areas.