Even in the ever-evolving landscape of Elon Musk's ventures, the recent remarks made by him at the New York Times DealBook Summit sent a not so shocking, shockwave through the business and advertising communities.

In Musk’s own words, “Don't advertise…"

This was Musk's controversial statement regarding the growing advertising boycott on social media platform X. He followed this up with comments of corporations trying to “blackmail” him with advertising money. He also dropped the F-bomb and cursed out those who are pulling back from X.

These comments have left many wondering about the platform's future sans X Advertisers, as 90% of its annual revenue was from advertisers historically.

The Musk Approach:

Elon Musk, known for his questionable business moves and unconventional behavior, took control of social media giant Twitter last year. Since then, he has implemented drastic changes, including significant staff reductions and the removal of teams focused on policing hate speech and harassment.

Musk's “unique” management style has raised eyebrows, as he reinstated previously banned users. Most recently Alex Jones who was removed from X in 2018 for posting harassing messages, including the claim that the Sandy Hook shooting was a hoax.

Musk introduced a controversial "verified" blue check mark system available for purchase, leading to an influx of impersonators and false posts.

The Antisemitic Controversy:

One of the most damaging incidents for X was Musk's endorsement of an antisemitic post that claimed Jewish communities promote hatred of white people. Musk retweeting the post and saying, “You have said the actual truth”.

Musk later apologized for his actions on the DealBook stage, acknowledging the severity of his mistake. However, the damage had already been done, causing concerns among advertisers about the platform's alignment with their values.

The fallout from this incident prompted major corporations, including Walmart, Apple, Disney, and IBM, to halt advertising on the platform. These are the corporations Musk’s claims are “blackmailing” him.

Tom Hespos, Principal Consultant of the advertising consulting firm Abydos, conveyed the corporations struggle with X & Musk perfectly, “Advertisers don't want to answer questions about why are you on a platform that seems like it's a safe space for antisemitism, for hate speech,”.

Financial Implications Without X Advertisers:

Despite Musk’s vitriol and I-Dare-You attitude towards X advertisers pulling away, he claims that the advertising boycott could "kill the company."

Due to Musk's decision to take the company private, its financials are no longer available to the public. So, it’s hard to tell what killing the company means in dollars and cents.

However, before going private, Twitter’s public financials suggested that roughly 90% of its annual revenue came from companies advertising on the platform, and it seems unlikely that has changed.

A New York Times report, citing internal X records, suggested potential losses of up to $75 million.

Should We Still Be X Advertisers?

To keep it short and sweet, no. At least, not right now.

Over the past couple of years Musk has shown that he is more interested in in using Twitter/X as his own playground than a platform for users and advertisers. With the lack of accountability and potential massive revenue loss, some question how the company can even go on. Revenue loss usually leads to layoffs. Considering X is running lean with the current staffing, having lost 80% of its staff since Musk took over.

Further employee loss could lead to more technical issues, making the site unusable. Like the most recent event of URLS on the platform not working for nearly an hour. This was attributed to an internal error made by the last remaining site reliability engineer. Not a place to recommend someone spend their ad budget on.

While Musk could bail out Twitter for any number of years, a sale to someone better equipped to run a social media platform would be prudent. But until that time comes, if ever, your ad dollars are best spent elsewhere.

To launch your content creation strategy, book an Intro Conversation with the digital advertising and branding specialists at Rizzo Young Marketing.

The Unfortunate Saga of Elon Musk and the Exodus of X Advertisers