X has a new advertising strategy -- to support small and medium-sized businesses. Musk wants to attract smaller companies to fix X's failing advertising business after he told big brands boycotting his social-media platform to f*ck off -- after media reports that Musk posted antisemitic content.
The Financial Times reported that X will now turn to small and medium-sized advertisers competing with Google, Microsoft Advertising, and Meta. Musk alienated big brands leaving X over an antisemitic post that he amplified on the platform.
Some of those advertisers include Disney, IBM and Apple. They stopped ad spending on X following his amplification of an antisemitic post.
Musk called the pullback of advertisers "blackmail," and said advertisers could "go f*ck" themselves.
medium businesses are a very significant engine that we have definitely underplayed for a long time,” the Financial Times reports. “It [was] always part of the plan — now we
will go even further with it.”
X also confirmed it will press ahead to secure ties with third parties such as marketing start-up Jump Crew to help it ink advertising deals from SMBs, according to one report.
MediaRadar's analysis of X's U.S. ad spend from January to October 2023, prior to the recent controversies, reveals the majority of advertisers on X are already smaller businesses.
Out of approximately 15,700 advertisers, 79% or 12,400 each spent less than $25,000 -- contributing a total of $60.5 million. About 91% of X's total ad revenue comes from companies spending $99,000 or less.
The challenge for X is that only 426 companies -- 3% of all X advertisers -- invested more than $500,000 each in this period to a total of $1.2 billion. This accounts for 78% of X's ad revenue.
Musk never believed in paid advertising for his companies like Tesla -- at least according to many years of published reports. He avoided such practices for years since July 2003, when Tesla was founded.
In 2020, Tesla shareholders voted on whether the company would use paid advertising, but the move lost favor.
Then in 2021, Musk used Twitter to passively market the Tesla air-purification system in a tweet. He initiated the acquisition of Twitter on April 14, 2022 and completed it on October 27, 2022.
The rest is history.