Elon Musk’s X is particularly susceptible to an ad boycott
Despite his disdain for the advertising industry, Elon Musk has a knack for creating viral slogans. During a New York Times event on November 29th, the world’s wealthiest man was asked about firms pulling ads from X, the social network he acquired last year when it was still known as Twitter. His response was, “If somebody’s going to try to blackmail me, go fuck yourself.” This “GFY” approach, as he called it, may come naturally to billionaires. However, it is a bold move for a company that generated around 90% of its revenue from ads last year. Among those who have withdrawn ads from X are Apple and Disney, both of which Mr. Musk previously cited as evidence that X was a safe space for brands.
Advertisers are concerned about objectionable content on the platform. Since Mr. Musk fired 80% of X’s staff, including many moderators, more offensive content seems to be slipping through the filters. Last month, Media Matters for America, a watchdog organization, reported that ads for brands like IBM had appeared alongside posts praising Adolf Hitler (X disputes this and is suing Media Matters).
Social networks have more freedom than mainstream media to reject advertisers. While a typical TV network in America relies on fewer than 100 major clients for most of its ad revenue, social networks can have millions of smaller ones. According to research firm Sensor Tower, a year ago, the largest social network, Facebook, obtained 45% of its domestic sales from its top 100 advertisers. In 2020, a boycott by over 600 firms, including giants like Unilever and Starbucks, had little impact on Facebook’s sales. However, X lacks Facebook’s advanced ad-targeting system and depends on campaigns by major brands. In October 2022, when Mr. Musk acquired Twitter, its top 100 clients accounted for 70% of American ad sales.
2023-12-06 15:22:12
Link from www.economist.com
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