X looks to small advertisers after Elon Musk attacks big brands: Report
Business
Its team is testing partnerships with other ad platforms to attract small businesses
(Web Desk) - After anti-semitic content was found near advertisements bought by major brands on X, the social media platform formerly known as Twitter, some of the world's largest companies pulled their spending on the platform.
Now, X is going after a new demographic: small businesses.
Before Elon Musk purchased Twitter last year, about 85% of its revenue came from advertisers, especially larger brands.
But, just a month after his ownership became official in Oct. 2022, nearly half of the platform's top advertisers halted spending.
Flash forward a year later, and more advertisers have begun to pull out, spurred on by a report from left-wing watchdog Media Matters of America, alleging that pro-Nazi content was found alongside ads from brands like Xfinity and Apple.
At least half a dozen marketing agencies have said they would no longer advertise on the platform; several major companies, including The Walt Disney Co. and Walmart, have also stopped advertising on X.
The social media platform has lost more than 200 ad units, putting it at risk of losing $75 million in ad revenue by the end of 2023, according to The New York Times.
In response, Musk has unleashed a flurry of attacks on the brands that halted their spending, with a focus on Disney CEO Bob Iger.
“If someone is going to try to blackmail me with advertising, blackmail me with money, go f--k yourself," Musk said last month at the Times' Dealbook Summit.
X's advertising team is now testing partnerships with other ad platforms to try and attract small and midsize businesses, which have helped bolster Meta and Alphabet's Google to achieve success, according to The Wall Street Journal.
The company discussed a potential partnership with Amazon that would make X's ads available through Amazon's ad-purchasing software, which could draw in some of the millions of smaller businesses that buy ads through its tools, people familiar with the discussions told the Journal.
Talks between the two companies were preliminary and might not materialize, they added.
Amazon would require X guarantee that any ads sold by Amazon wouldn't appear next to hate speech or other content that violates its policies, the Journal reported, citing people familiar.
Google, which signed a deal with X to sell some ads through automatic tools, has a similar requirement, people familiar with the talks told the Journal.
X is also engaged in preliminary talks to give ad-tech company PubMatic access to some of its ad inventory.
