“We’ve definitely had those conversations as to, is the juice worth the squeeze?” Scarola said.
Leaving X isn’t all about brand safety
X’s lawsuit comes on the heels of a report from republican members of the House of Representatives which found GARM limited choice for consumers by organizing to demonetize content it doesn’t favor, specifically pointing to X and conservative creators and outlets, like Fox News and The Daily Wire.
But sources said there were many reasons brands chose to stop advertising on X, starting with Musk’s takeover in 2022, that had nothing to do with politics or brand safety. Axios reported that X is supposed to make $2 billion in advertising revenue this year, compared to the $4.5 billion in revenue in 2021, the last full year X reported its earnings publicly.
First, the most successful digital media companies like Meta and Google typically attract performance budgets, which are focused on linking advertising with sales. X has never been good at this and still isn’t, the first buy-side source. “It’s never been about cost per acquisition,” they said.
Plus, at the time of Musk’s takeover, brands had concerns about X’s operational capacity that sparked reconsideration of ad spend, said Arielle Garcia, director of intelligence at industry watchdog Check My Ads, who served as chief privacy officer at ad buying giant UM Worldwide at the time of the Musk takeover.
“You had agency reps that were just kind of gone. You had no one to speak to about brand safety issues. The platform was in complete turmoil,” Garcia said. The first buyer source said there is more support from X reps than during Musk’s initial takeover.
“It’s interesting the way that they’re positioning all of this, when the reality is that brands were making decisions based on a whole host of different factors. Brand safety itself was only one of them,” Garcia said.
ADWEEK has requested comment from X and will update the story if the platform responds.
