In light of X's biggest advertisers pulling out of the platform, a new study reveals that Elon Musk's company is struggling to compete with the advertising power of its biggest social media rivals.
Gupta Media conducted a study by examining CPM (cost per mille) rates across eight platforms and billions of ad impressions to track their ups and downs in the previous year.
X Lags Behind Competitors Despite Slow Recovery
According to the research, X's CPM dropped by a staggering 75% since Elon Musk took over the app in October 2022 to just $0.65 in August, marking a record low in the last three years.
On average, X's CPM amounted to $1.20 in 2023, making it fall into the last place among the eight platforms included in the analysis.
Facebook and Instagram lead with the highest average CPM at $7.17. Meta's platforms are followed by TikTok and YouTube, with an average CPM of $3.45 and $3.05, respectively.
Google Display's CPM average stood closer to the video streaming giants at $2.83, with more than a dollar gap between its average and X's.
"While CPM (cost per thousand impressions) is just one metric among many used to measure the cost of high-impact marketing performance, it’s a bellwether for both investors and advertisers to understand the relative values and costs associated with a platform," Gupta Media wrote in its research.
Musk Will Blame Advertisers If X Fails
X's poor performance as an advertising platform comes in light of Musk's recent controversies.
Disney, among hundreds of advertisers has opted to withdraw its advertisements from Elon Musk's social media platform in the wake of his alleged support for an antisemitic conspiracy theory.
During the New York Times' Dealbook conference last week, Disney CEO Bob Iger stated that "his name is very much tied to the companies he either founded or he owns...And by him taking the position that he took in quite a public manner, we just felt that the association with that position and Elon Musk and X was not necessarily a positive one for us."
Musk, whose interview came after, lashed out at the advertisers using explicit language, specifically targeting Iger, and acknowledged that they are to blame in the case that an advertising boycott would "kill the company."
Earlier that week, a report from the New York Times supposed that X could lose $75 million in advertising revenue amid the boycott, with the number of companies halting their campaign reaching 200.