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X Ad Revenue Figures Plummet by Half a Billion in 2023, Sparks Controversy and Leadership Dispute

TL;DR: Elon Musk's X anticipates a sharp drop in 2023 ad sales to $2.5 billion following a controversial statement. Major advertisers, including Comcast and Walt Disney, suspended ads, contributing to the decline despite disputes over accuracy from X's Head of Business Operations, Joe Benarroch.

In a recent report by Bloomberg News on December 12, it was revealed that ad sales for Elon Musk’s social media platform, X, are projected to plummet to approximately $2.5 billion in 2023. This significant dip follows the decision of several major companies, including Comcast and Walt Disney, to suspend their advertisements on the platform. The move comes in response to Musk’s public agreement with a post on X, previously known as Twitter, that made controversial claims about Jewish people inciting hatred against white individuals.

Joe Benarroch, X’s Head of Business Operations, contested the Bloomberg report, stating to Reuters that it presents an incomplete view of their business, with inaccurate and insufficient details from their sources.

According to LSEG data, X’s revenue from advertising services over the last four quarters totaled $4.7 billion, covering the second half of 2021 and the first half of 2022. However, the company’s ad revenue experienced a decline under Musk’s leadership, with monthly U.S. ad revenue dropping at least 55% year-over-year each month since his takeover in October 2022.

Despite generating just over $600 million in ad revenue for each of the first three quarters of 2023, X expects a similar performance in the current period. This falls significantly short of the over $1 billion per quarter recorded in 2022, highlighting a substantial downturn.

Ad sales constitute between 70% and 75% of X’s total revenue, and executives initially targeted $3 billion in revenue from advertising and subscriptions for 2023. However, the platform is now expected to fall far short of this goal, as Musk grapples with the aftermath of the ad revenue decline and the heavy debt load, as indicated in his remarks in July regarding Twitter’s negative cash flow.”

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