Hey, remember a few months back when reports suggested that X was on track to post a major financial loss for the year, but X executives were like “nah, our ad revenue will be fine, we’ll make heaps on the U.S. election and the Olympics”?
Yeah, I’m guessing that didn’t happen, because Elon Musk’s personal social network is making a big push to eek out more money in the final stretch of the year.
This week, X has started pushing full-screen promotions for X Premium, as it seeks to get more people paying to use the app.
In addition to this, X has announced a new promotion, in conjunction with Shopify, which will see X match Shopify merchants’ ad spend this holiday season.
As per X:
“From now through December 1st, we’re offering Shopify store owners an unbeatable deal to help you scale your business and drive more sales. To help you take advantage of this exciting new update, we’re offering a 100% ad credit match when you speak with an X Ads Specialist.”
As you can see in this overview, there are some provisos on that, in that you’ll need to commit to a level of X ad spend, and connect your Shopify info through to X. Your ad credits will then be valid for only 30 days, but these are fairly minor considerations for, effectively, free X ads.
But you also don’t offer something for free if it’s in high demand, and as such, the promotion itself suggests that X is still in a pretty tight spot on overall ad intake.
Of course, many advertisers have turned away from X, due to Elon Musk’s controversial changes at the app, which have seen major shifts in moderation (putting more reliance on Community Notes, which is not up to the task), and a rise in the presence of right-wing political commentary.
And above all that, a rise in the presence of Musk himself. Musk’s clearly using the app as a bullhorn for his own political views and preferences, and that’s made some brands more wary of using the app for audience outreach.
Which is why, as noted, X was on track to record a major loss this year heading into the election and Olympics periods.
As we reported last month, X is currently on track to bring in an estimated $2.9 billion in total revenue for 2024, which is a significant decline on the $4.4 billion that Twitter brought in in 2022. Musk took ownership of the app late in that year, and his plans to revitalize the platform, and convert it into a billion-user powerhouse, have thus far largely fallen flat.
And while Musk has arguably succeeded in his broader mission of getting Donald Trump back into office, X itself remains in dire straits financially, especially when you also factor in the $1.2 billion in annual loan repayments that Musk brought into the company when he purchased the app.
What’s leftover, then, is unlikely to be enough to cover X’s bills. But then again, it has shut down offices (including its San Francisco HQ) and laid off a heap of staff. So maybe its overheads are far lower than most presume.
Though even factoring in these changes, X might still be in a tough spot, and if it can’t pay the bills, it could still be facing bankruptcy, if it’s unable to get its ad business back on track.
There have been some positive signs, with reports suggesting that several major advertisers are now returning to X, potentially in an effort to hold favor with Musk, who’s expected to hold significant sway in the second Trump Administration. Trump’s victory could also see more advertisers reconsidering their audience understanding, and that too may also see more returning to the app.
It would take a big turnaround, but I do think that X is going to find a way, particularly now that Elon believes that he can use the platform to sway political outcomes in his favor.
I doubt he’s going to give that up so easily, and with Musk pulling political strings, and calling in favors, I assume that he’ll be able to find a way to keep the company afloat, one way or another.
But this latest offer shows that X is still struggling to win back ad partners, and get its ad business back on track. That still looms as a challenge for its future.
Though if you’re a Shopify merchant, free expanded X campaigns, if you want them.
