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Social media platform X, formerly Twitter, will target more small and midsize businesses (SMBs) to win advertising following owner Elon Musk’s attack on departing brands from the platform.
According to the Financial Times, as advertisers such as Apple, Comcast, Disney, IBM, Lionsgate Entertainment, NBCUniversal, Paramount Global and Warner Bros. Discovery have distanced themselves from X, the company will look elsewhere to drive revenue.
Musk accused departing brands of “blackmail” during a candid–and now infamous–interview at The New York Times’ DealBook Summit on Wednesday. He told them, “Go f*ck yourselves,” as he answered questions about the criticism he faced around online posts that have been described as antisemitic.
Around 200 advertisers are reported to have halted their spend on the platform in recent weeks in response to his posts. Musk also warned that the impact of the advertising boycott could be fatal for the company that he paid $44 billion for just over a year ago.
On Friday, X outlined its ongoing plans as it focuses on smaller brands aiming to grow attention through the platform.
“SMBs are a very significant engine that we have underplayed for a long time. It was always part of the plan — now we will go even further with it,” the company told the Financial Times.
It also clarified estimated revenue losses from departing advertisers, previously said to be around $75 million, as being between $10 million and $12 million.
According to MediaRadar research, of around 15,700 advertisers on X between January and October 2023, 79% spent less than $25,000, a total of $60.5 million. Additionally, 91% of the company’s total advertising revenue came from companies that spent $99,000 or less.
“SMBs seem to be by far the lowest hanging fruit for X to go after, and the select few large advertisers who enjoy some of the same viewpoints as Elon and want to show support,” business transformation consultant Tom Goodwin told Adweek.
With digital platforms such as LinkedIn, Facebook and Google offering self-serve advertising, they have each been able to build long and profitable revenue streams, which makes the shift to focus on smaller companies easy for X, added Goodwin.