Musk's New Washington Role Is Spurring Advertiser Return to 'X'
1min read Multiple media executives have revealed that some brands are preparing to resume advertising on the social media platform "X" because its owner, Elon Musk, is set to hold an important position in the new Trump administration.
Earlier today, President-elect Trump announced that Musk, along with entrepreneur Vivek Ramaswamy, will lead the newly established Department of Government Efficiency to cut costs, eliminate regulations, and reorganize federal agencies.
Two years ago, Musk acquired Twitter for a hefty price of $44 billion and privatized it, renaming it "X" . Last November, due to Musk's controversial statements on the X platform, many advertisers pulled their ads, and major companies like Disney, IBM, and Apple also suspended their advertising.
Musk's response a year ago was to tell them to "Go F-Yourself." However, the status of advertisers and the X platform has changed significantly since then.
Lou Paskalis, CEO of advertising consultancy AJL Advisory and former marketing executive at Bank of America, said that some marketers might reallocate spending to X as a form of political leverage.
Paskalis added that some companies—especially those seeking government contracts—need to gain "Elon's favor" because Trump has appointed Musk to lead the Department of Government Efficiency, which means the new president has granted him a broad scope of authority.
Another advertising company executive also views X as the official channel for White House communication. He also said that Trump's election victory has given Musk new legitimacy, giving him greater influence in industries that may face new regulations under Trump.
Shira Jeczmien, CEO of British news publisher Screenshot Media, said that for a social media platform like x when it is crucial for brands, especially in the context of potential political communication needs, brands may no longer be as concerned about whether it meets moral or noble standards. This implies that, under certain circumstances, commercial interests may override moral considerations.
Musk has repeatedly touted the importance of X for elections, calling it the "home" of conservative political discourse. Last week, after Trump's election win, Musk posted a chart indicating that the usage of X had reached an all-time high.
However, analysis indicates that the X platform has not yet returned to its commercial peak. According to estimates from data company SensorTower, compared to the first half of 2022, the total expenditure of the top 100 advertisers on X in the first half of 2024 has dropped by 68%.
Market research firm eMarketer estimates that X's advertising revenue this year is expected to be $1.9 billion, down from $2 billion last year, far below the $4.5 billion before the acquisition in 2021.
An advertising company executive believes X has increasingly become "Elon's echo chamber" (where different voices are not heard), describing X as a cesspool where many clients are reluctant to participate.