Elon Musk's X is projected to experience an ad revenue loss of over $2.5 billion, marking a 40% drop from the previous year, according to a new report from Bloomberg.
Ad sales have always been the main profit driver for the social media platform and once accounted for about 90% of X's revenue.
Following Musk's takeover, this number has since decreased to an estimated 70-75% of the company's overall sales, making about $600 million in ad revenue for each of the first three quarters in 2023.
In comparison, the company generated over $1 billion in ad revenue per quarter in 2022.
Previously, the New York Times reported that the company could lose over $75 million in ad revenue sales for the remainder of 2023.
Musk Pays the Price
The mass departure of advertisers from the platform over time has largely contributed to this drop in ad revenue.
Earlier this year, X lost over half of its top advertisers following Musk's takeover, with many citing the platform's unstable condition, the company's layoffs and Musk's regulations as reasons for leaving.
Yet, Musk continues to drive off more of his company's profit generators.
More recently, the billionaire told advertisers to go **** themselves during the New York Times Dealbook Summit, giving no incentive for the 200 or so advertisers that have left the past month to return to the platform.
"I think the issue here continues to be that Musk seems to not be aware that his behavior is having this dramatic impact or if he just simply doesn't care," Wagner notes.
A New Tactic
While it may be difficult for X to draw its advertisers back to the platform, recent reports indicate a potential shift in strategy to appeal to small to medium businesses instead of tech and entertainment giants by the likes of Disney and Apple.
According to the Wall Street Journal, the company is currently in talks with Amazon for a potential collaboration that would allow X's ads to be featured on the eCommerce giant's ad-buying services.
The deal remains to be in its early stages, but opens up the doors for X to steer away from being a legacy brand, and find a whole new purpose as what Musk calls "the everything app."