Several major advertising campaigns by relevant brands on a popular social media platform have been paused or canceled after its owner, Elon Musk, endorsed an anti-Semitic conspiracy theory. The platform, known as X, has faced a backlash from more than 200 advertising units from companies including Airbnb, Amazon, Coca-Cola, and Microsoft, all of which have stopped or are considering stopping their ads on the social network.
The timing of these advertising suspensions is especially critical for X, as the last quarter of the year typically sees a surge in advertising due to holiday promotions like Black Friday and Cyber Monday. Historically, the company generates around 90% of its revenue from advertising during this period.
Many brands have been hesitant to advertise on the platform since Elon Musk’s acquisition of the company earlier this year, raised concerns about his behavior and content moderation decisions. As a result, advertising in the United States on the platform has dropped by almost 60% this year, as reported by CBS.
According to internal documents reviewed by The New York Times, over 100 brands have completely paused their ads, with dozens more listed as “at risk” of following suit. It was noted that many of these pauses occurred after Musk posted a controversial conspiracy theory on X regarding Jews supporting immigration to replace white populations.
Advertising agency Outcast’s vice president of digital marketing and social networks, Leesha Anderson, mentioned that her clients have been progressively moving away from advertising on X after Musk’s acquisition. Many have turned to alternatives like LinkedIn and TikTok.
Major organizations, including political campaigns, fast food chains, and technology giants, have halted or paused their advertising campaigns on X. For example, Netflix has frozen almost $3 million worth of advertising, while several Microsoft subsidiaries have also paused their advertising, possibly leading to a loss of over $4 million in revenue for X’s fourth quarter.
The social network acknowledged the pause in advertising spending by certain advertisers and highlighted that while these brands have paused their paid campaigns, they have not ceased their activity on the platform, showing their commitment to their audience by sharing content for free.
The platform’s CEO, Linda Yaccarino, is now faced with the challenge of attracting large advertisers again after their significant decline. However, her management is affected by public interventions and Musk’s handling of the platform, which could require continued crisis and reputation management efforts.
Overall, X’s situation highlights the delicate balance between the personal stances of business figures and the commercial repercussions, particularly at a time when the company is facing a significant financial loss. The pause and cancellations of advertising campaigns reflect the widespread disapproval by major brands following Musk’s controversial statements.