X continues to do all it can to reassure its advertising partners of its brand safety efforts. Rejoining World Federation of AdvertisersGlobal Alliance for Responsible Media (GARM)is a coalition of online providers and brand partners.Addressing the challenges of harmful content and advertising monetization on digital media platforms.”
We are pleased to inform you that X has re-established their relationship with our company. @wfamarketers Global Alliance for Responsible Media. As of today, X is #Garm Here: https://t.co/vZ3imzeXda
X is committed to ensuring safety at Global Town Square and is proud of it.
— Safety (@Safety) July 1, 2024
X drifted away from GARM After Musk’s acquisition of the appAs a result, nearly the entire Twitter brand safety team has left the company. This and various other layoffs have caused X to distance itself from its GARM efforts, but it is now seeking to re-establish its commitment to GARM’s mission and will reaffirm its commitment to upholding the standards set out in the GARM Guidelines.
It’s the latest in a broader effort by X to demonstrate its commitment to maintaining its brand-safety credentials amid the ongoing challenge of convincing advertising partners to return to the app.
This has led to a roughly 50% drop in X’s advertising revenue since the acquisition, though X has recently reported that more brands are returning to the app, albeit at slower spending rates.
One of the main reasons brands are avoiding the app is the perception that Elon Musk’s lax content moderation rules are encouraging more offensive content to be posted on the app, increasing the risk of negative brand associations in ad placements. Various third-party reports have also suggested that X is allowing hate speech and conspiracy theory content to thrive, seemingly causing many advertisers to reconsider their ad spend on X.
But in reality it is much broader than that.
A big challenge for X is that Musk himself, who has the most followers on the app, continues to spread conspiracy theories and controversial opinions on hot political issues, while for many brands, X is less valuable as a promotional platform given its relatively limited reach in this space.
X currently has 250 million daily active users, a huge number compared to many other platforms, but at the same time, this is less than a quarter of the audience a brand can reach on Instagram, YouTube or Facebook, and significantly less than TikTok or Snapchat.
Add to that the fact that X’s user base hasn’t grown in the 18 months since Musk took charge of the app, and that Twitter, despite its potential influence, was never naturally suited to driving direct response, and it’s clear that brand safety concerns aren’t the only reason advertisers are opting out of X’s ad spend.
Essentially, X doesn’t have widespread support under Musk, and that, combined with these other association risks, means X is simply not worth it to many companies who have other places to do their brand promotion.
So how can Company X turn this around? Well, growth would be a great place to start.
In his original plan to revamp the app, Musk said the renamed X Platform would By 2025, there will be 600 million daily active users, and by 2028, there will be 931 million daily active users.
So far, as mentioned above, X has 250 million daily active users and given stagnant growth since shortly after Elon took over in November 2022, it seems unlikely that it will be able to double its audience size over the next 12 months.
This was a key pillar of Musk’s plan to win the support of advertising partners, who would eventually become too big to ignore whether X agreed with his changes or not. And as X continues to grow, the power in this respect will shift to X, allowing Musk to better realize his free speech ethos, by whatever means he chooses. Advertising partners, on the other hand, will need to use the app for their own purposes.
That’s apparently not going to happen, at least not as soon as Elon predicted. But if X Payments proves as successful as Musk hopes and people become more interested in xAI’s Grok chatbot, there could be more opportunities. It may not be 120% growth potential, but that’s where X seems to be pinning its hopes for now.
If X can get its growth back on track, it will be a big step in the right direction to reinvigorate its advertising business. Brand safety is also a top priority, and partnerships such as joining the GARM framework make sense. But multiple factors really need to come together for X to maximize its advertising revenue.
Could that even happen?
This is certainly a challenge, and expanding brand safety partnerships and agreements would never hurt in this regard.
