Walmart has joined the list of major advertisers pulling ads from Elon Musk's social media platform, X, citing concerns about hate speech and a preference for platforms better suited to reach their customers.
According to the Associated Press, this move follows a recent outburst from Musk during an interview with journalist Andrew Ross Sorkin, wherein he accused companies halting spending on X of engaging in "blackmail" and advised them not to advertise.
"We aren't advertising on X as we've found some other platforms better reach our customers," the retail giant said in a statement on Friday.
A Walmart store logo is seen on the building of a Walmart Supercenter in Rosemead, California on May 23, 2019. - Walmart has said it will raise prices as a result of the Trump administration's tariffs on Chinese-made goods as the trade war is about to take a bite into the retail sector affecting consumers shopping at stores like Walmart, Target and Macy's.
Walmart Joins Companies in Boycotting Ads on X
Walmart is now part of a growing list of companies, including Walt Disney Co., IBM, NBCUniversal, and Comcast, that have chosen to cease advertising on X.
X, formerly known as Twitter, has faced criticism for its lax content moderation, leading to concerns among advertisers about their ads appearing alongside inappropriate content.
The platform's CEO, Linda Yaccarino, a former NBCUniversal executive hired by Elon Musk to rebuild ties with advertisers, has struggled to improve relations with companies worried about the proliferation of hateful and toxic speech.
Despite efforts to rebuild advertiser trust, Musk's recent explicit remarks directed at advertisers during the DealBook summit have escalated the controversy. Musk defiantly stated, "If someone is going to blackmail me with advertising or blackmail me with money, go f--- yourself."
Amid the upheaval, Joe Benarroch, X's Head of Operations, highlighted the platform's substantial user base, citing Walmart's community of over a million people on X.
Additionally, with half a billion users on X, the platform garners 15 billion impressions annually during the holiday season alone, and over 50% of X users conduct the majority or entirety of their online shopping.
Elon Musk Acknowledges Financial Consequences
Elon Musk acknowledged the potential financial consequences of an extended advertiser boycott, admitting it could lead to X's bankruptcy. However, he placed the blame for such a collapse on the brands rather than on himself.
Concerns have been voiced by analysts, including Tom Forte from D.A. Davidson & Co., that additional companies could join the trend of pausing advertisements on X, adding complexity to the platform's financial prospects.
The monthly ad revenue of X in the United States has witnessed a notable decline since Musk took over in October 2022, reportedly showing a year-over-year decrease of at least 55% each month, according to Reuters.
This financial downturn intensifies the challenges for X's subscription initiatives, potentially requiring more than half of its revenue to be generated from subscriptions to compensate for the decrease in ad revenue.
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