Elon Musk’s X is especially vulnerable to an ad boycott

livemint.com:

Elon Musk has a way with viral slogans. At a New York Times event on November 29th the world’s richest man was asked how he felt about firms pulling ads from X, the social network he bought last year when it was known as Twitter. “If somebody’s going to try to blackmail me," he replied, “go fuck yourself." The “GFY" approach, as he dubbed it, may come naturally to billionaires.

But it is bold for a company that last year made 90% or so of its revenue from ads. Those that have pulled ads from X include Apple and Disney, whose presence Mr Musk previously cited as evidence that X was a safe space for brands. Advertisers are worried about unsavoury content on the platform.

Since Mr Musk fired 80% of X’s staff, including many moderators, more bile seems to be leaking through the filters. Last month Media Matters for America, a watchdog, reported that ads for brands such as IBM had appeared alongside posts praising Adolf Hitler (X disputes this and is suing Media Matters). Social networks are freer than mainstream media to tell advertisers to get lost.

Whereas a typical TV network in America gets most of its ad revenue from fewer than 100 big clients, social networks can have millions of small ones. A year ago the largest, Facebook, was getting 45% of its domestic sales from its 100 biggest advertisers, reckons Sensor Tower, a research firm; a boycott against it in 2020 by more than 600 firms, including giants like Unilever and Starbucks, had little effect on sales. But X lacks Facebook’s sophisticated ad-targeting apparatus, and relies on campaigns by big brands.

In October 2022, when Mr Musk bought Twitter, its 100 top clients accounted for 70% of American ad sales. Half of them have since left X, Sensor Tower says. On