X is facing a substantial risk of losing up to $75 million in advertising revenue by the close of the year, as per a recent report by the New York Times. This financial setback is attributed to a growing number of prominent brands suspending their marketing campaigns on the platform.
The catalyst for this advertiser exodus was Musk’s endorsement of an antisemitic post on the platform just last week. Notable companies, including IBM, Walt Disney and Warner Bros Discovery, responded by temporarily halting their advertisements on the platform, formerly known as Twitter.
In response to the adverse situation, X has taken legal action against media watchdog group Media Matters, claiming defamation. The lawsuit contends that a Media Matters report falsely accused the platform of displaying ads for major brands, such as Apple and Oracle, alongside content promoting Adolf Hitler and the Nazi party.
Internal documents accessed by The New York Times reveal a comprehensive list of over 200 ad units belonging to companies like Airbnb, Amazon, Coca-Cola, and Microsoft. Many of these companies have either halted their advertising or are contemplating a pause on their campaigns within the social network.
X disclosed on Friday that an alarming $11 million in revenue is currently at stake. The exact figure is volatile, fluctuating as some advertisers cautiously return to the platform while others intensify their spending, according to the report.
Advertisers have been steadily deserting X since Musk’s acquisition of the platform in October 2022, coinciding with a notable reduction in content moderation. This shift has resulted in a sharp increase in hate speech on the site, prompting concerns from civil rights groups.
Reports indicate that the platform’s U.S. ad revenue has experienced a staggering decline of at least 55% year-over-year each month since Musk assumed control in October 2022.