X responds to advertisers exiting but ad leaders predict platform can’t come back from latest controversy

X, formerly known as Twitter, responded to the exodus of major advertisers including Apple, IBM, Disney, Comcast, Lionsgate and Paramount Global, but advertisers predict that the Elon Musk-owned platform will not be able to come back from the latest controversy. Meanwhile, some marketers are also calling on X CEO Linda Yaccarino to resign, in order to protect her own reputation. The latest stream of advertisers pausing spend on the platform comes after Musk promoted an antisemitic post, and nonprofit media watchdog Media Matters for America released a report last Thursday revealing brands including Apple, X’s largest advertiser, had their ads run next to antisemitic content. Also read: How much X is losing from the advertiser boycotts In an internal memo shared to the press by X, Yaccarino told employees that “there’s a vocal minority trying to use deceptive attacks to undermine our work. But on the other side, there are vocal supporters and courageous partners who believe in X and the meaningful work you are all doing.” “While some advertisers may have temporarily paused investments because of a misleading and manipulated article, the data will tell the real story,” wrote Yaccarino, without clarifying what data she was referring to. “Because for all of us who work at X, we’ve been extremely clear about our efforts to combat antisemitism and discrimination, as there's no place for it anywhere in the world.” “It’s chaos,” said one ad executive who is close to brands that have paused their spend on X. Still, the ad executive doesn’t expect Yaccarino, who became CEO in June, will step down right now. “I would be surprised if Linda resigns so soon. She’s in a ‘can’t lose’ situation. No one will blame her if it fails, but she will be seen as a miracle worker if she establishes even small wins.” The biggest issue, the ad executive said, is that X is just not a priority for most advertisers because it lacks the reach of other platforms. “While Elon creates chaos, CTV, retail media networks and other premium inventory [TikTok] are far more attractive alternatives. They [X] just don’t matter too much anymore,” the ad executive said. Also read: FTC warning may disrupt brand and creator deals It’s the latest blow to X, which has seen a steady decline in its ad revenue since billionaire Musk took it over in October 2022 and raised various brand safety concerns. Two media buyers told Ad Age that they no longer have any clients actively advertising on X; however, one said that some are still on the platform because they sponsor media that runs on X in addition to other platforms, e.g. a sports league sponsorship that incorporates the brand into video content that is distributed on X. “I don’t see any of our advertisers coming back onto X,” said one of the media buyers. The buyer said any advertiser that spends on social media understands the risk of being served next to controversial content. The difference for X is that it fails advertisers’ expectation that “content is monitored and eliminated when it breaks rules of the platform, [and] also that the content is from users not condoned, endorsed or boosted by the platform. “In the case of X, the owner has clearly endorsed content that advertisers find controversial and/or objectionable,” said the buyer. “ Once the platform is associated with that content, not simply a neutral platform, advertisers are going to be wary.” A third media buyer at a holding company said: “What’s interesting about the latest, I don’t even know what you call it, a Friday, is brands are publicly stating they paused on the platform. Before, it was a lot of quiet pausing.” An IBM spokesperson had said in a statement that “IBM has zero tolerance for hate speech and discrimination and we have immediately suspended all advertising on X while we investigate this entirely unacceptable situation.” With the latest controversy at X, the third media buyer said their agency is essentially just working with clients to map out what will be the “red line” for them that will get them to pause ads on any platform if they haven’t already done so (most brands have already likely mapped that out). Of course, this is certainly not the first time brands have had to make such decisions—on X and on other social platforms such as Meta and YouTube. It’s not completely surprising that most of the brands that paused spend on X so far are in entertainment, the media buyer said, because companies tend to follow others in their sector. In the wake of the Media Matters report, Musk tweeted a statement claiming Media Matters had rigged its process in order to purposefully create a feed that aligned advertisers with the antisemitic content. In the tweet, Musk wrote that “X Corp will be filing a thermonuclear lawsuit” against Media Matters “the split second court opens on Monday.” The split second court opens on Monday, X Corp will be filing a thermonuclear lawsuit against Media Matters and ALL those who colluded in this fraudulent attack on our company pic.twitter.com/55vl7PspaQ— Elon Musk (@elonmusk) November 18, 2023 What we’re doing at X matters and has everyone’s attention. I believe deeply in our vision, our team, and our community. I’m also deeply committed to the truth and there is no other team on earth working as hard as the teams at X. When you’re this consequential, there will be…— Linda Yaccarino (@lindayaX) November 20, 2023 Once again, brands will need to assess where to shift advertising spend if they pull ads from X. For some advertisers on X, the media buyer said that the red line happened earlier in November when the Prager University Foundation, a conservative advocacy group, was able to purchase a “takeover” ad on the platform to promote its controversial film, “Detrans: The Dangers of Gender-Affirming Care.” The third buyer said anyone who logged onto X that day saw that takeover ad and “that was the red line for certain clients,” though the buyer declined to name the advertisers who pulled off the platform. “So, there’s still quiet pausing,” the buyer said. Those brands that have quietly paused over the last year largely have not returned to X, despite the platform trying to woo them back with pricing discounts and new brand safety tools. “A lot of brands haven’t seen any reason to come back because of the reputational risk,” the person said. In general, advertisers have distanced themselves from marketing on social media since the beginning of the Israel-Hamas war, multiple media buyers have said in conversation with Ad Age. The buyers said this is standard practice for clients in times of escalated geopolitical conflict. As such, the response to Musk’s tweets over the weekend seemed to signal a moral breaking point for advertisers and inspired public confirmation of ad withdrawal from major companies rather than a continued pullback. Also read: Israel-Hamas war tests social media brand safeguards A fourth media buyer said that since the Oct. 7 Hamas attack on Israel, “social is a no-go” because advertisers don’t want to be aligned with potentially inaccurate news, particularly as deepfakes and “everything we were afraid would happen” are proliferating across the platform. Similarly to how advertisers avoid opinion-based news programming, the second buyer said clients are trading X and social buying in favor of investing in vetted news sources, favoring vetted publications and cable news, particularly as advertisers strategize media spend for the upcoming election year. On the latest controversy, Musk had posted to X: “This past week, there were hundreds of bogus media stories claiming that I am antisemitic. Nothing could be further from the truth. I wish only the best for humanity and a prosperous and exciting future for all.” This past week, there were hundreds of bogus media stories claiming that I am antisemitic. Nothing could be further from the truth.I wish only the best for humanity and a prosperous and exciting future for all.— Elon Musk (@elonmusk) November 19, 2023 The third holding company media buyer, who has been involved in conversations with X's Client Council, an exclusive group of marketing and agency executives, said the biggest concern for brands advertising on X remains in its ability to control the vast amount of controversial content on the platform from showing up around their ads—as is highlighted in its latest controversy. Yaccarino reinstated the Client Council to address brand safety concerns after Musk earlier disbanded it. Yaccarino’s efforts have included introducing various new adjacency controls through partnerships with third parties including Integral Ad Science, but the media buyer said there’s just too much polarizing content on the platform to even manage since Musk took over and has enforced an absolutist free-speech approach. For many brands, it just poses too many risks being on the platform. “The well is poisoned,” the buyer said.

X responds to advertisers exiting but ad leaders predict platform can’t come back from latest controversy

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