X's Ad Revenue Falls 20% as Musk Touts AI Targeting; Major Advertisers Remain Unconvinced Amid Safety Issues

Adweek reports that Elon Musk is trying to make his relationship better with the Cannes Lion Festival after not taking advertisers seriously on X. He said that he is going to use artificial intelligence to improve targeting on X. No advertisers want to come back on the app and Musk will have to do a lot to lure them back on the app. Mark Penn, CEO of Stagwell, was asking advertisers to not advertise brands on the app because of brand safety issues. But now it is asking marketers to advertise brands because there is a large group of consumers on the app and X has improved its safety due to AI and Community Notes.

An executive told Adweek that X cannot connect agencies to customers because it doesn’t have the manpower to do so and clients are not willing to invest their ad spend on X. According to Sensor Tower, X had 26.2 million daily users in June 2024, which is 13% less YoY. 73 out of 100 big advertisers left X as soon as the acquisition of the app happened in October 2022 because they were concerned about new rules and safety of their brands on the app.

MediaRadar reported that ad dollars have also dropped 20% YoY, from $788 million in 2023 to $628 million in 2024. Buyers are nervous because of Elon Musk’s anti semitic and anti trans comments on the app. Now as the elections are approaching, X is going to become more political and brands are nervous if they want to advertise their products there or not.

X’s AI powered ad targeting tool also cannot help that much. Google and Meta have already been using their AI powered ad targeting tools but X hasn’t tested the tool on any live campaign because there is not much ad spending on the app. X also does not have performance driven tools like its rival apps like Snapchat, Meta and TikTok. There are already several other apps for advertisers to advertise their products so why would they go to a platform which doesn’t have many tools for the advertisers?

Image: DIW-Aigen

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