Elon Musk’s support for Donald Trump could boost Company X’s struggling business, with some marketers considering a return to social media platforms to drum up support for the incoming administration. I’m preparing.
Media executives told the Financial Times that some brands are once again on the verge of The company is currently preparing to place advertisements on the site.
The platform’s revenue has fallen dramatically since Musk bought it for $44 billion two years ago, with some investor estimates suggesting its current valuation is less than $10 billion. are.
Brands have expressed concern after groups such as Disney, IBM and Apple withdrew from the platform last year, with Musk stripping them of moderation. Mr. Musk responded by telling big companies to “fuck you” about suspending advertising.
But Lou Pascalis, CEO of marketing consulting firm AJL Advisory and a former media executive at Bank of America, said some marketers use “political leverage,” such as when seeking government contracts. said that it is likely that expenditures will be reallocated to X. He added that companies are looking to “reap the benefits of Mr. Elon,” who has been given broad powers by President Trump as co-director of the new Office of Government Efficiency.
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“This could be seen as an official channel for White House public relations,” said another advertising agency executive, adding that Trump’s victory gives Musk new legitimacy and that Trump’s new It added that powers had also been given to brands in sectors that could face major deregulation.
“If it’s an important channel, it rarely goes to great heights,” said Sheila Jezmien, chief executive of media and marketing group Screenshot Media.
Others remained disgusted, with one media director describing X as a “mess”, adding: “What brand would take the risk?”
Musk is predicting a resurgence in business for X after being an avid supporter of the Trump campaign through the platform, making more than $100 million in political contributions. “Some of the boycott is starting to be lifted,” he told podcaster Joe Rogan ahead of the US election, adding: “If Trump wins, some of the boycott will be lifted.” . . . Most of the boycotts are lifted. ”
Since the election, Mr. Musk and his allies have hailed X as essential to winning votes and a home for conservative political discourse. Last week, Musk posted a graph showing that “global user seconds” jumped from less than 400 billion to 434.1 billion in the days leading up to the vote. He wrote to X, “Usage of this platform is at an all-time high!”
CEO Linda Yaccarino responded to a tweet claiming that X would grow exponentially and become a key voice for political candidates, writing: “Reporting for Duty.” . Sean Maguire, a partner at Sequoia Capital, said his Silicon Valley venture firm was “ridiculed” for investing $800 million to fund Musk’s acquisition, but that “we I’m sure we’ll get the last laugh.” Never bet against Elon. ”
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However, the election had mixed effects on X’s audience and engagement. According to Similarweb, the X website’s highest traffic day in the US so far this year was last Wednesday, the day after the US presidential vote, with Election Day itself coming in second. The app’s daily active users also spiked, according to the data.
However, it was also revealed that 115,000 users in the United States deleted their X accounts on Wednesday, marking the single largest number of web account withdrawals since the study began. Competitors such as , Bluesky and Meta’s Threads also appear to be increasing their user base.
Musk’s closeness to Trump has fueled speculation that Company X might merge with the president-elect’s own online platform, TruthSocial.
“By coincidence or design, Mr. Musk has launched a new Truth Social, not a new Twitter, even though Mr. Trump is not a major shareholder,” said Bruce Daisley, former head of Company X for Europe, the Middle East and Africa. spoke.
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It’s unclear how the election will affect the seven banks, which owe about $13 billion from Musk’s acquisitions. According to people familiar with the matter, banks led by Morgan Stanley will continue to hold the loan until 2025, as it will likely be necessary to offer a fire sale price to attract potential buyers until Company X’s management stabilizes. That’s pretty much what he expected.
Company X continues to make interest payments on its debt despite its operational challenges. By September, bankers had given up on the possibility of persuading Mr. Musk to use Tesla or SpaceX stock as collateral for a margin loan to repay a portion of Company X’s loan.
Efforts are needed to strengthen Company X’s sluggish business. Market intelligence group Sensor Tower estimates that total U.S. ad spend by X’s top 100 advertisers in the first half of 2024 was 68% lower than in the first half of 2022, before Musk acquired the platform. .
Data shows that of the top 200 advertisers on X who stopped ad spending in the last quarter of 2022, only seven returned to the platform in 2024. These advertisers have been largely replaced by advertisers that are either completely new to X or never existed in X. By 2022, you’ll be spending much less than marketers have been in the past.
EMarketer expects the company to generate $1.9 billion in ad revenue this year, down from $2 billion last year and about $4.5 billion in 2021, before the acquisition. Mr. Musk privately called brand chief executives to condemn them for leaving the site, while publicly naming others, including Disney’s Bob Iger.
Legal action has also been taken. In August, X filed a lawsuit against the Global Alliance for Responsible Media, a coalition of brands and advertising agencies, and its members, including Unilever, Mars, and CVS Health. The defendants “conspired” to boycott Company X after Musk’s acquisition, alleging that they restricted consumer choice in violation of antitrust laws.
Garm later shut down, saying the claims “misguided the purpose” but “significantly drained resources and finances.”
Industry participants suggested the measures were having an effect. Unilever started spending money on X again last month, but was quickly withdrawn from the case. One advertiser said his agency was warned in the wake of the lawsuit to be careful about what they say in writing about Billionaire and X within the company.
Other advertising executives said many brands will continue to be reluctant to trust X, arguing that its advertising services are inferior to rivals such as Meta and TikTok.
X is increasingly becoming an “Elon echo chamber,” said one advertising executive. “It’s like a cesspit, and many customers don’t want to be a part of it.”
Richard Exon, founder of advertising agency Joint, said: “Trump’s victory may mean brands will give X a second chance in 2025,” but added “with extreme caution.” “It would be wise to take action and pay for it,” he warned.
