X continues to do all that it can to reassure ad partners of its brand safety efforts, this time by rejoining the World Federation of Advertisers’ ‘Global Alliance for Responsible Media’ (GARM), which is a coalition of online providers and brand partners that are dedicated “to address the challenge of harmful content on digital media platforms and its monetization via advertising”.
We’re excited to announce that X has reinstated our relationship with the @wfamarketers Global Alliance for Responsible Media. As of today, X is included as a member of #GARM here: https://t.co/vZ3imzeXda
X is committed to the safety of our global town square and proud to be…
— Safety (@Safety) July 1, 2024
X drifted from GARM following Musk’s takeover at the app, which resulted in virtually all of Twitter’s brand safety team moving on from the company. That, among various other cuts, saw X distance itself from its GARM commitments, but now it’s looking to re-establish its commitment to GARM’s mission, which will see X re-committing to its pledge to uphold the parameters set out in the GARM guidelines.
It’s the latest in X’s broader push to demonstrate that it’s working to maintain its brand safety credentials, amid ongoing challenges to convince ad partners to come back to the app.
That’s seen X’s ad revenue decline by around 50% since the acquisition, though more recently, X has reported that many brands are coming back to the app, albeit at lower spend rates.
One of the key reasons why brands are avoiding the app is due to the perception that Elon Musk’s more lax rules around content moderation have led to more offensive content being posted in the app, which thereby leads to greater risk of negative brand association in ad placement. Various third party reports have also suggested that X is allowing more hate speech and conspiracy theory content to proliferate, and that, seemingly, has prompted many advertisers to reconsider their X ad spend.
But it’s actually even broader than that.
A key challenge for X is that Musk himself, the most followed user in the app, continues to amplify conspiracy theories, and his divisive opinions on hot button political issues. While for a lot of brands, X is simply not that valuable a platform for promotions, given its relatively limited reach in the space.
X currently has 250 million daily active users, which is huge in comparison to many other outlets. Yet at the same time, it’s less than a quarter of the audience that brands can reach on Instagram, YouTube or Facebook, and is also significantly lower than TikTok and/or Snapchat.
Add to this the fact that X’s userbase hasn’t grown in the 18 months since Musk took over at the app, and the fact that Twitter was never great for driving direct response anyway, despite its potential influence, and it’s clear that there’s a lot more to advertisers opting out of X ad spend than just brand safety concerns.
Basically, X is just not resonating with a broader audience under Musk. And when combined with these other association risks, it’s simply not worth it for many, when they have other places to run their brand promos.
So how can X turn this around? Well, growth would be a key starting point.
In his initial plan to reform the app, Musk projected that the renamed X platform would reach 600 million daily active users by 2025, and 931 million DAU by 2028.
Thus far, as noted, X has been sitting on 250 million daily actives since shortly after Elon took over in November 2022, and given its stagnant growth, it seems unlikely that it’s going to be able to double its audience over the coming 12 months.
This was a key pillar in Musk’s plan for winning over ad partners, that, eventually, X would simply be too big to ignore, whether they agreed with his changes or not. And as it continued to grow, the balance of power in this regard would shift to X, enabling Musk to better align with his own free speech ethos, through whatever means he chose, while ad partners would have to use the app for each.
That, seemingly, isn’t going to happen, at least not as early as Elon projected. But maybe, if X Payments takes off as Musk hopes, and people get more interested in xAI’s Grok chatbot, there could be more opportunity. Maybe not 120% growth type of potential, but this is where X seems to be pinning its hopes at this stage.
If X can get its growth back on track, that would be a big step in the right direction in reigniting its ad business. And while brand safety is also top of mind, and partnerships like participating in the GARM framework make sense, it’s actually a combination of things that will need to align for X to maximize its ad intake.
Can that happen?
It’s a challenge, for sure, and expanding its brand safety partnerships and agreements certainly can’t hurt in this respect.
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