X (formerly Twitter) is at risk of experiencing losses in advertising revenue up to $75 million in 2023 as big brands continue to pause or pull out from their advertising campaigns with the social media platform, according to a report from The New York Times.
Leaked documents from X's sales team suggest that the number of companies that have or are considering pausing their ads is sitting at 200.
In reaction to the report, X released a statement claiming it was at risk of losing only an estimated $11 million in revenue, as some advertisers have already resumed their ad campaigns.
Historically, the platform performed at its best in the final quarter of the year, during the peak of holiday campaigns and Black Friday deals.
Before Musk's takeover in October 2022, the company registered $1.57 billion in revenue in 2021, with 90% of it coming from brands advertising on the platform.
Is X Able To Bounce Back?
Throughout the past few weeks, companies such as IBM, Apple, Disney, 11:11 Media and Ubisoft have paused or pulled out from advertising on the social media network amid reports that their ads were running alongside "pro-Nazi content."
You have said the actual truth— Elon Musk (@elonmusk) November 15, 2023
The leaked documents also revealed that companies that have stopped advertising on X range from a wide variety of political figures, fast-food chains and tech giants.
Home rental giant Airbnb reportedly halted over $1 million in ads, while Uber cut over $800,000, pausing campaigns in the U.S. and internationally.
However, Musk has had a history of dissuading advertisers from his platform—stretching back as far as the beginning of his acquisition.
Previous reports showed that more than half of the platform's top 1,000 advertisers, including Coca-Cola, Jeep and Unilever stopped spending on the platform at the start of 2023. This brought X's advertising revenue down by an estimated 59% as of May 2023 compared to the same period in 2022.
Bouncing back to reclaim its lost advertisers remains to be a challenge for X.
Last week, the company sued non-profit Media Matters for allegedly manipulating the findings of its report, which caused a lot of brands to pull out, with Musk calling the company "pure evil."
In a supposed effort to prove his support for the victims in the Middle East, Musk also made a promise to donate X's ad and subscription revenue to fund hospitals in Gaza.
However, the damage has been done, and it seems it may take more than statements to get X into its former glory.