X's Brand Safety Issues Continue to Deter Advertisers

Advertisers have lost confidence in platform X due to several issues, including:

• Incorrect data provided by DoubleVerify: This affected advertisers over at least four months, leading to an apology for the error.
• Content moderation failures: For instance, Hyundai paused advertising after a sponsored post appeared next to antisemitic content.
• Controversial leadership and public statements: Elon Musk's confrontational response to advertisers and acknowledgment of the platform's reliance on ad revenue.
• Association with hate speech and extremist content: Instances like Hotwire Global finding their ads on profiles promoting extremist content.
• Decreased ROI and audience shift: Marketers have noticed a drop in return on investment and a change in the platform's user base, making it less appealing for advertising.

Platform X has implemented several measures to enhance brand safety and attract advertisers, including:

• New hires: Such as Linda Yaccarino, to address the platform's safety efforts.
• Partnerships: With companies like DoubleVerify and Integral Ad Science (IAS) to improve ad verification.
• Ad placement controls: Introduction of new controls for where ads are placed to give advertisers more assurance.

Despite these efforts, the platform has not seen a significant return of advertisers.

Advertisers are considering other social channels over platform X for several reasons:

• Brand safety concerns: Ongoing controversies and content moderation issues make other platforms appear safer for brand association.
• Public backlash: High-profile cases where brands faced criticism for their marketing campaigns or partnerships make advertisers wary of controversy.
• Performance marketing: Advertisers feel that platform X has not proven itself as an effective channel for performance marketing, making it less essential in media budgets.
• Emerging competitors: Platforms like Threads by Meta are gaining traction and offering new ad opportunities, providing alternatives to platform X.

Platform X is currently expected to account for just 1.6% of U.S. social ad spend this year, according to eMarketer. This represents a significant dip in ad dollars and reflects the loss of confidence from advertisers.

The monthly active user count comparison between Threads and platform X is as follows:

• Threads: Now has 150 million monthly active users.
• Platform X: Self-reports 550 million monthly active users globally.

Despite platform X having a higher number of monthly active users, Threads is gaining momentum and is expected to roll out ad offerings this year, which could further impact platform X's appeal to advertisers.