X loses revenue as advertisers halt spending on platform over Elon Musk's posts

Brands are pulling paid advertising off of social media platform X to distance themselves from its new owner, Elon Musk, over his endorsement of an antisemitic post. 

Musk referred to a post claiming Jews "have been pushing the exact kind of dialectical hatred against whites that they claim to want people to stop using against them" as "the actual truth," landing him in hot water with companies that are among the platform's top advertisers. 

Apple, Disney, Coca Cola and other major companies have since removed paid ads from the platform in moves that could deprive X of up to $75 million in revenue, according to a New York Times report. 

"He's often inserting himself into major public conflicts or incidents," New York Times technology reporter Ryan Mac told CBS News in reference to the outspoken billionaire. 

"Now, after these comments, after this one post he made engaging a white nationalist conspiracy theory, advertisers are pulling back in the most important holiday period for any company that does advertising," Mac said. 

Ad sales softened almost immediately after Musk took over the platform, formerly known as Twitter, last year. But losses could be even greater than executives had anticipated. 

In the U.S., ad revenue dipped 60% over the summer, according to Mac. The latest pullback in spending comes over the all important holiday shopping season, during which retailers typically up their ad spending.

"It's 90% of the company's revenue, so that is a major, major hit to the company," Mac added. 

Love-hate relationship

Advertisers are drawn to social media platforms like X given the sheer volume of users and the frequency of their interactions on the site. For this reason, Mac said many companies have what he called "a love-hate relationship with X." 

Reached for comment, X confirmed the pause in advertising spend by some brands, while calling their motives into question. 

"These brands also know how indispensable X is in connecting with their communities," X told CBS MoneyWatch. "Instead they are simply posting 'ads' for free to keep engaging with their respective communities," the company said, referring to brands like Amazon, DisneyPlus and others that have paused or are considering pausing paid advertising on the platform, while continuing to post content on brand-owned X accounts. 

Musk in May appointed veteran advertising executive Linda Yaccarino as CEO of X, then called Twitter, to convince big brands to return to the social media service following a loss of advertisers after his takeover. 

Mac said Yaccarino, who still reports to Musk, has "had her hands tied," given that Musk is still in control. "Her boss tends to mouth off on X on a daily basis and I think it's a lot of damage control at this point," he said.