X (formerly Twitter) is reportedly sparing no effort to attract small to medium-sized businesses in a bid to boost its advertising revenue.
This move comes after key advertisers like Apple, IBM and Disney started leaving the platform due to Elon Musk's endorsement of an antisemitic post. Now, Musk is hoping this strategic change will help X shore up its currently under-performing ad business.
As part of the new strategy, X aims to create a more welcoming and conducive environment for lesser-known brands to advertise on the platform. The folks at Financial Times attribute this revamp in X's advertising strategy to more than a hundred brands threatening to stop advertising on the platform.
Now, the company is reportedly trying to attract more small and medium-sized brands to run ads on X. Taking a major step forward in this direction, X has increased investment to promote ads of small companies.
With this move, X is trying to offset the huge revenue losses caused by the departure of big brands. It is worth noting that the platform has been working with small and medium brands for a while now. However, these brands have become the company's priority following the exit of big brands.
Why are big brands ditching X?
The social media giant decided to radically overhaul its ad strategy after Musk criticised its advertising approach. The 52-year-old billionaire particularly managed to find fault with how the platform treated small businesses.
In one of his recent posts on X, Musk noted that he doesn't care if big brands place ads on the platform. X is trying to boost its advertising business by actively attracting small and medium-sized enterprises to place ads.
To those unaware, Musk has been catching flak from advertisers for endorsing an antisemitic conspiracy theory on X, as per a report by media watchdog Media Matters. In response, Musk filed a lawsuit against the company.
According to the X owner, Media Matters "manipulated" data to destroy the platform and drive advertisers away from X. In the meantime, a considerable number of major brands paused their paid marketing campaigns on X.
Musk has reportedly used expletives to criticise advertisers who have left the platform, telling them to "go f*** yourself". Musk recently shared a screenshot on X showing Disney spending millions on other platforms. In his post, Musk asked the entertainment giant why it boycotted X.
So then why is Disney boycotting 𝕏, yet spending millions on other platforms? pic.twitter.com/vIX5hhc8RS
— Elon Musk (@elonmusk) December 1, 2023
He also referred to the boycott as "blackmail". However, advertisers aren't expected to return to X anytime soon. Founder and CEO of marketing consultancy AJL Advisory, Lou Paskalis believes Musk's expletives against advertisers are the "closing chapter" for brands doing business with X.
According to Paskalis, advertisers are "not going to forget that". Understandably, some experts believe the boycott could eventually lead to X's bankruptcy.
Can small and medium-sized brands help X boost its ad revenue?
X's new ad strategy involves giving small and medium-sized brands a more inclusive and accessible environment. Moreover, the platform will revise its ad policies and streamline the ad creation process.
Aside from this, the Musk-owned platform will offer more targeted and budget-friendly advertising options for smaller businesses. This will allow the company to make the situation fair for everyone, especially smaller brands.
However, unlike most leading brands, smaller brands usually aren't willing to spend a lot of money on advertising. So, X is betting big on its sophisticated self-service ad-buying tools that allow even inexperienced business owners to target the right potential customers without breaking a sweat.
Several other platforms are targeting small and medium brands. As a result, the company will have to go toe-to-toe with its arch rivals including Meta, Google, TikTok and other brands that have top-notch ad platforms. It will be interesting to see whether X will be upping the ante.
According to a report by ITHome, friends and former colleagues of X CEO Linda Yaccarino are urging her to resign to protect her reputation. While the top executive isn't planning to quit anytime soon, it is unclear whether she will be able to overcome the challenge at X.
