Elon Musk‘s social media platform X is expected to witness a drastic reduction in advertising expenditure in 2025. This forecast comes in the wake of a report by UK-based market research firm Kantar.
What Happened: Kantar’s research indicates a 26% decline in marketers’ ad spend on X for the coming year. This is the largest recorded withdrawal from any major global advertising platforms to date.
The report also highlights a significant decrease in marketers’ trust in X as an advertising platform since its acquisition by Musk. In 2022, when the platform was still known as Twitter, advertisers’ trust stood at 22%. However, by 2024, this trust had plummeted to 12%.
Gonca Bubani, Kantar’s Global Thought Leadership Director, pointed out that the rapid decline in trust over the past year suggests a reversal of this trend is unlikely. Bubani emphasized that X’s unpredictable nature makes it challenging for advertisers to ensure brand safety.
Furthermore, the report shows that X lags behind its competitors in terms of brand safety. A mere 4% of advertisers believe that advertising on X guarantees brand safety, while Google stands out with a 39% trust rating.
This development follows recent backlash Musk faced for sharing a contentious video on X, just the latest controversy involving the increasingly political Musk. His outspoken comments have further intensified advertisers’ concerns about brand safety on the platform.
Earlier last month, Musk initiated legal proceedings against a consortium of advertisers. He accused the group of breaching federal antitrust laws by collectively withholding billions in advertising revenue from his social media platform.
During a November event hosted by The New York Times, Musk addressed queries regarding his antisemitic tweets and issued an apology. However, he quickly shifted tone, expressing disinterest in advertiser demands.
Musk’s decisions have left marketers with little incentive to remain on the platform, especially in light of broader budget cuts across the industry. In the wake of the GARM lawsuit, ad buyers have expressed their hesitation to associate with a platform that sues advertisers for choosing not to advertise there.
Why It Matters: The anticipated reduction in ad spend on X is a significant blow to the platform, which has been grappling with trust issues since Musk’s acquisition.
The declining trust in X’s ability to ensure brand safety, coupled with the platform’s unpredictable nature, is a major deterrent for advertisers.
This development underscores the importance of brand safety in advertising decisions and could potentially influence future trends in the industry.
Read Next
Elon Musk Reveals The Biggest Benefit Of AI Replacing Human Jobs: ‘In A Benign Scenario …’
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
