Elon Musk changes his tune on advertisers as X deals with a colossal cash problem

I want you back… Less than a year ago, Elon Musk told advertisers pulling their ads from X to “go f— yourself.” This week, Musk traveled to France for the Cannes Lions ad festival to say actually, nevermind. Musk seemed to suggest that he’d only intended his November message for advertisers who were departing X at the time (like Disney, Apple, Comcast, and IBM) and he said that X might be “worth trying out” again. The pivot comes as new documents revealed the state of X’s finances since Musk took over.

• Doing #s: The documents show that X lost $456M in Q1 of last year, compared to a $513M gain the year prior (before the $44B Musk-quisition). Revenue was down about 40% on the year in the first half of 2023.

• Ad break: X has made efforts to nudge advertisers back to the platform, including half-off discounts for premium placements and $500 credits for $250 ad spends.

• Wings clipped: This year Fidelity slashed the value of its stake in X, suggesting the platform’s value had plunged 73% since Musk’s takeover. X’s iOS app downloads trail all major rivals except Pinterest and LinkedIn.

A crowded room… While the digital ad market has rebounded from an abysmal 2022 (#adpocalypse), it’s getting harder to meet advertisers’ expectations. Businesses selling ad space are racing to create “premium” spots to contend with marketers that’ve grown wary of “made for advertising” sites and tactics like clickbait. Meantime, retailers like Kroger and Walmart are building out their ad businesses to win over advertisers hungry for their customer data. Retail media (picture: ads on Walmart self-checkout screens) is expected to make up 20% of global digital ad spend this year.