In a bold move to counteract falling revenues, Elon Musk’s X (formerly Twitter) is ramping up efforts to generate significant income from political advertising.
This strategy, aiming to bring in $100 million from political ads in the 2024 election cycle, comes as the platform grapples with a host of challenges, including advertiser exodus and privacy law violation allegations.
This has been widely noticed by X users, who commented about the increased number of political ads on X.
What's happening with my X feed. It's 50% political memes (US), non-disclosed ads and other random garbage I have to scroll past to get to the juicy tech content I'm here for. I guess I'm switching to lists too?— Sebastian Lorenz (@thefubhy) December 19, 2023
Following the reversal of a ban on political advertising by Musk, X is now intensively pursuing political ad revenues.
X Chief Executive Linda Yaccarino has stated ambitions for X to secure $100 million annually in such revenues during big election years.
However, industry insiders cited by the Financial Times view this target with skepticism, given the platform's past performance and current market dynamics.
In 2018, Twitter garnered about $3 million from political advertising, only a negligible part of the $100 million target.
It remains unlikely that this push will sufficiently offset the significant revenue losses X has recently faced.
X Faces Revenue Challenges As Advertisers Leave
X’s financial health has come under scrutiny following a substantial exodus of advertisers.
Major brands, including Airbnb, Coca-Cola, and Microsoft, have paused or considered halting their ads, potentially leading to a loss of up to $75 million in revenue for X.
This retreat can be attributed in part to Musk's controversial statements and the platform's perceived endorsement of inflammatory content.
And let’s not forget what happened just a few weeks ago when Elon Musk bluntly told his advertisers that he hopes they don’t advertise on X.
While advertisers are stepping back, political entities, especially Democratic candidates in the US, have been increasingly active on X.
Despite voiced concerns about the platform under Musk’s leadership, Democrats have spent over a million dollars on thousands of political ads since the lifting of the ad ban.
This dichotomy illustrates the continuing importance of X as a political messaging tool, even amidst its controversies and the declining number of active users.