Since Elon Musk's takeover, controversies have dogged Twitter, now known as X, and among them were losing advertisers and laying off many workers. To remedy its loss of advertisers, the billionaire appointed Linda Yaccarino as the Chief Executive Officer of X.
However, despite the efforts, major brands seem reluctant to return, already allocating their budgets elsewhere for the upcoming holiday season, historically the prime period for ad revenue, Bloomberg reported.
LONDON, ENGLAND - JULY 24: A photo illustration of the new Twitter logo on July 24, 2023 in London, England. Elon Musk has revealed today a new logo for Twitter, which constitutes the letter 'X' as part of a rebrand of the company.
X Efforts to Reestablish Advertiser Base
X has been working diligently to reestablish its advertiser base, which eroded after Elon Musk's tumultuous acquisition and the implementation of controversial policy changes, resulting in a loss of over half the company's annual revenue.
Bloomberg explains that marketers typically finalize their holiday budgets by August, leaving limited room for last-minute adjustments. Natasha Blumenkron, Vice President of Paid Social at Tinuiti, noted that X's historical revenue peak occurred in the final quarter of the year.
"It would take a big change and a big reason to believe for us to recommend that our advertisers are shifting budgets back there," she stated. Tinuiti's advertisers have chosen to increase their spending on platforms like Facebook, Instagram, TikTok, and Snapchat instead of investing in X.
Jason Harris, CEO of ad agency Mekanism, echoed this sentiment, revealing that Twitter was integral to every initial plan. However, clients have now redirected their focus towards more stable platforms like TikTok, Reels, and YouTube Shorts.
Despite efforts to entice advertisers back, X's reputation for leniency towards harmful, abusive, or racist content since Musk's takeover remains a significant concern for many marketers.
This factor continues to deter some clients from returning to the platform. Lou Paskalis, Chief Strategy Officer at Ad Fontes Media, conveyed skepticism to Bloomberg about advertisers increasing their investments in Twitter ads. Even if they were considering it, the levels would likely be significantly lower than their previous allocations.
Read Also: X Agrees to Talk to More Than 2,000 Fired Employees After Elon Musk's Purge-Compensation Coming?
Waning Optimism?
After Elon Musk's takeover, major advertising agencies like WPP, IPG, and Omnicom encouraged clients to suspend or reconsider their ads on the platform.
Yaccarino's appointment as CEO in May instilled hope in several advertisers, who anticipated her stabilizing influence. According to Bloomberg's report, although X has introduced tools to enhance brand control over ad placement, optimism has waned in some agencies.
Harris emphasized that initial excitement surrounding Yaccarino's appointment has somewhat waned, potentially impacting her brand image. Some have questioned her influence, particularly in comparison to Musk's assertive presence on the platform.
While X has made efforts to rebuild its relationships with advertisers, ad revenue has yet to rebound. Musk acknowledged a 60% decline earlier this month, though he did not specify the exact timeframe.
Related Article: X, Formerly Twitter, Replaces 'Tweet' With 'Post', 'Retweets' Become 'Reposts' in New Terms of Service
