Elon Musk had a simple message for big advertisers boycotting X over his online behavior: “Go **** yourself.” Advertisers might listen and take their dollars, the lifeblood of his platform, with them.
Taking the stage at the New York Times Dealbook Summit, clad in a bomber jacket and arriving late from a visit to Israel, Musk struck a defiant tone against advertisers who pulled their ads from X, formerly Twitter, over his apparent endorsement of an anti-Semitic conspiracy theory. In a rare act of contrition, the mercurial entrepreneur apologized, calling it “the worst and dumbest post” he’s made, but when asked how he would reassure advertisers leaving X over his behavior, Musk made no such apologies.
“I don’t want them to advertise,” said a palpably annoyed Musk. “If someone is going to blackmail me with advertising or money, go **** yourself.”
Musk did not stop there. In a searing tirade, he accused advertisers of trying to “kill the company” with their boycott, and the possibility did not appear to perturb him. If that were to happen, Musk said that “everybody on Earth will know” that his company was wiped out by this advertiser exodus.
For all of Musk’s cavalier attitude, the impact of the withdrawals is leaving a mark. Since the company no longer has to publish its financials after going private, it is difficult to ascertain exactly how much advertising revenue has been lost under Musk, but recent reports suggest the picture is challenging.
In an analysis by the digital marketing firm Similarweb, it was found that usage of X’s ad portal fell by 14% on a year-over-year basis, while the number of users is down 16% from a year ago. Overall traffic to the platform has similarly fallen by 13.8%, from 6.8 billion visits last November to only 5.9 billion.
In its last public earnings report before Musk bought out Twitter, the company reported that it made about $1.177 billion in revenue in the first six months of 2022 of which advertising accounted for about 91% of the total.
To be sure, the data suggests that spending on the platform is down, but not fatally so. At the same time, the combination of declining user numbers on top of a retreat in big-dollar spending by advertisers is unsustainable, said David Carr, senior insights manager at Similarweb.
“Smaller advertisers may still be interested, even if large accounts with big budgets are shying away from X,” Carr, the author of the report, said. “But X may not be able to operate profitably with the small advertisers alone.”
Musk’s aggressive indifference to assuaging advertisers also complicates the job of his handpicked CEO, Linda Yaccarino, who was in the audience when he launched his broadsides.
Yaccarino, who’s been on the job for just under six months, was hired to woo advertisers back to X and ease their concerns about Musk. This has put Yaccarino, an outsider to Musk’s orbit, in a difficult position as she works to do this while staying within her boss’s good graces.
Musk’s fusillades makes her job more challenging, said said Brian Uzzi, a professor at Northwestern University’s Kellogg School of Management, because maligning them with accusations and personal attacks makes it harder for them to consider returning to the platform. This leaves no easy route forward for Yaccarino, who was reportedly advised recently by colleagues to cut her losses early by quitting.
“She’s in an impossible situation,” said Uzzi, adding that just quitting now would likely not be easy. “She can’t leave or she’ll look like a failure if she does without any wins.”