X Faces Projected Slump in 2023 Ad Sales to $2.5 Billion, Following Controversies – Bloomberg

In a recent report by Bloomberg News, Elon Musk’s social media platform X is anticipated to experience a significant dip in ad sales, projected to plummet to approximately $2.5 billion for the year 2023.

The decline in ad revenue comes in the wake of a series of controversies surrounding X. Last month, a post on the platform garnered attention when Musk expressed agreement with its assertion that Jewish individuals were inciting animosity against white people. Subsequently, several major companies, including IBM and Walt Disney, opted to suspend their ads on the platform in response to the controversy.

Joe Benarroch, the head of business operations at X, responded to the Bloomberg report, stating that it “presents an incomplete view of our entire business” and highlighted inaccuracies in the information provided by the sources Bloomberg relied on.

In the first three quarters of 2023, X reportedly generated slightly over $600 million in advertising revenue for each period. Sources familiar with the matter, as cited in the report, anticipate a similar performance in the current quarter.

Since Elon Musk took over in October 2022, monthly U.S. ad revenue witnessed a decline of at least 55% year-over-year each month, according to third-party data obtained by Reuters in October.

Advertising sales constitute a substantial portion, ranging between 70% and 75%, of X’s total revenue. Although executives had initially set a target of $3 billion in revenue from advertising and subscriptions for 2023, the platform is expected to fall significantly short of this goal.

Elon Musk had previously noted in July that Twitter’s cash flow remained negative due to a nearly 50% drop in advertising revenue and a substantial debt load. In September, X CEO Linda Yaccarino said that the platform is “just about break even” and could turn a profit in early 2024. The current challenges faced by X underscore the impact of controversies and strategic shifts in leadership on the platform’s financial outlook.

Last week, X CEO Linda Yaccarino revealed that the platform witnessed an influx of more than 10 million new sign-ups during the month of December.