The big brands are allocating a small amount of advertising budget to Elon Musk’s X, seen as a boycott of social media platforms, trying to avoid causing public fallouts with billionaire owners.
Several marketing executives told the Financial Times that companies are putting pressure on X to spend nominal amounts following Musk’s famous role in US President Donald Trump’s administration.
They said Musk’s pursuit of legal action against the group that has stopped advertising since its $44 billion acquisition in late 2022 also issued an alarm. X added about half a dozen more companies to its cases last month, including Shell, Nestle, Pinterest and Lego.
“That’s enough money to get you off the naughty list,” said Lu Pascalis, CEO of Marketing Consultant AJL Advisory and former media executive at Bank of America.
“That’s not because the brand’s safety risks are gone. But the much bigger risk is that media comments (from Musk) will lower the stock price, facing billions of dollars instead of millions of dollars.”
The move comes as mask artificial intelligence group Xai bought its social media platform this week in a deal valued at $45 billion, including debt. Musk said it will combine data, models and talent from both companies.
Investors have been supported by Musk’s proximity to the Trump administration and signs that his cost-cutting approach is effective and that revenues are improving.
Linda Yaccarino, CEO of Musk and X, has set a goal aimed at raising advertising revenue to the 2022 level, according to two people familiar with the issue. People said this should bring X without hits by avoiding “boycotting” or avoiding platforms that are politically bent.
X’s revenues will rise to $2.3 billion compared to $1.9 billion this year, according to data from Emarketer. However, the global sales in 2022, when the group was known as Twitter and took over by Musk, was $4.1 billion.
Despite recent revivals of groups like Hulu and Unilever, the total US ad spending on X fell 2% in the first two months of 2025 compared to a year ago, according to data from Market Intelligence Group Sensor Tower.
American Express has rejoined the platform this year, but ad spending has fallen by about 80% compared to the first quarter of 2022, Sensor Tower said.
However, four large ad agencies, WPP, Omnicom, Interpublic Group and Publicis, recently agreed to a transaction to set annual spending targets using X in so-called “previous deals” where advertisers promise to buy slots in advance.
x, wpp, omnicom and publicis declined to comment. The Interpublic Group did not respond to requests for comment.
After X filed federal antitrust laws last summer against some companies, including responsible media global alliances, brands, advertising agencies and Unilever, fears have risen within the advertising industry, accusing them of adjusting “illegal boycotts” under the guise of being a brand safety initiative. The Republican-led House Committee on Judicial Affairs has leveled out similar charges.
Unilever dropped out of X’s lawsuit after resuming advertising on social media platforms in October.
Following discussions with the legal team, some staff at WPP GroupM feel that, according to those familiar with the matter, are concerned about communicating via video conferencing, taking into account the lawsuit.
Another advertising executive noted that the planned $13 billion merger between Omnicom and Interpublic was delayed by retaining the threat of regulatory intervention in the transaction due to requests for further information from the US Watchdog this month.
Sensor Tower said that 35 of X’s top advertisers did not advertise on the platform in 2023, stressing that they are “attracting new advertisers’ stripes.” These included Maga Merchandise Shop Rock Paper Sizzle, Caffeine Drinks Brand celsius, and Telehealth Group Hims & Hers.
X Insider pointed out that using the Self-Serve tool to use the new artificial intelligence tool provided by X’s Grok Chatbot to generate advertising campaigns.
“They just go back there (to the level of past ad revenue) and not in the same combination as advertisers,” the person said.
Mark Penn, CEO of New York-based agency Stagwell, said X is a “revived and increasingly vibrant platform.”
He added: “Political boycotts and things are dissipating because businesses realize that one side and the other are dangerous places.”
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In a document obtained by the Financial Times, Omnicom Media Group told the brand this year that X is a “persuasive opportunity for clients” and promotes the brand’s safety and its advertising offerings, particularly the improvements to new video formats.
He also said the potential return on investment was “highest ever.” This is because the agency negotiated the “most advantageous discount” with the platform.
“The idea of a high return on investment is hilarious,” said a rival media buyer. “You get what you pay. If you want to be cheaper, that’s the cheap media you’re getting.”
Ebiquity CEO Ruben Schreurs measured the amount spent by brands across different platforms and said he “has not seen any immediate returns to previous scale in terms of advertising budgets jumping to X.”
However, he added: “Personally, at some point in the near future, it doesn’t surprise me when I see the president actually asking brand advertisers to go back to X.”
