Elon Musk’s X (formerly Twitter), is expected to face a significant decline in ad sales for 2023, with projections estimating a drop to approximately $2.5 billion, according to a report by Bloomberg News.
The decline in ad revenue follows a controversy last month when Musk, who took over the platform in October 2022, endorsed a post on X that claimed Jewish people were promoting hatred against white individuals. In response to the incident, several companies, including Comcast and Walt Disney, suspended their advertisements on the platform.
Head of business operations at X, Joe Benarroch, responded to the Bloomberg report, stating that it presented an incomplete view of the company’s business. He mentioned that the sources relied upon by Bloomberg did not provide accurate and comprehensive details.
X’s advertising revenue for the last four quarters as a public company was reported to be $4.7 billion, covering the second half of 2021 and the first half of 2022, according to data from the London Stock Exchange Group (LSEG).
For the first three quarters of 2023, X generated slightly over $600 million in advertising revenue each quarter, with expectations of similar performance in the current period, the report, cited anonymous sources, stated.
Since Musk’s takeover, monthly U.S. ad revenue on X have experienced a decline of at least 55% year-over-year each month, according to third-party data obtained by Reuters in October. Elon Musk had previously mentioned in July that Twitter’s cash flow remained negative due to a nearly 50% drop in advertising revenue and a heavy debt load.
Advertising sales constitute a significant portion, accounting for 70% to 75% of X’s total revenue. Despite executives initially targeting $3 billion in revenue from advertising and subscriptions for 2023, the platform is expected to fall well short of that goal, according to the Bloomberg report.
