Confidence in Elon Musk’s platform, X, is waning among advertisers.
Recent data reveals only 14% plan to increase ad spend on X, while 77% favour TikTok.
Advertisers are increasingly moving their marketing budgets towards TikTok as confidence in Elon Musk’s platform X dwindles. A notable 77% of marketers plan to boost their advertising expenditure on TikTok in 2024, demonstrating the platform’s growing attractiveness to businesses. This is contrasted starkly with only 14% of advertisers who aim to reduce their spending on X, highlighting a significant loss of trust within the advertising community.
X has initiated legal proceedings against the Global Alliance for Responsible Media (GARM) and the World Federation of Advertisers (WFA) through an antitrust lawsuit. The lawsuit accuses GARM of orchestrating a “systematic illegal boycott” against X. The legal action alleges that this has resulted in billions of lost ad revenue for the platform. Additionally, WFA has decided to cease GARM operations due to insufficient funds, attributing their decision to the strains of ongoing legal battles.
Marketing expert Jane Ostler from Kantar raises concerns about whether the situation at X reflects a real boycott or is indicative of a broader decline in marketer confidence. She notes, “Marketers’ perceptions of X are that it is neither particularly trustworthy nor innovative; two hurdles it needs to overcome to win back media spend from advertisers.” These are strong barriers that X must overcome to regain advertiser trust and investment.
In contrast to X’s challenges, TikTok is reaping the rewards of increased advertiser interest. The platform recently reported a 25% revenue increase following a campaign that featured GB athletes during the Olympics. TikTok attributes this growth to heightened advertiser engagement during this period. According to Blake Chandlee, president of global business solutions at TikTok, the business is growing at a faster rate year-on-year than before.
Amidst mounting legal and reputational challenges, Elon Musk plans to host a live discussion on X Spaces with former US President Donald Trump. The event, set for 8pm ET (00:00 GMT) on Monday, promises “entertainment guaranteed”. This move could potentially draw attention back to X amidst its struggles, as Musk attempts to leverage high-profile events to reignite interest and engagement on the platform.
The current trends in advertiser preferences underscore the challenges social media platforms face in maintaining and growing their ad revenue streams. X’s struggle reflects the critical need for platforms to ensure trust and innovation to captivate advertisers. Meanwhile, TikTok’s success story highlights the importance of strategic planning, aligning marketing initiatives with audience interests, and leveraging high-profile events for growth potential.
X faces significant hurdles in regaining advertiser confidence amidst ongoing legal challenges and reputational damage. Conversely, TikTok continues to thrive, strategically capitalising on X’s perceived vulnerabilities in the market.
Elon Musk’s X must overcome trust and innovation challenges to regain advertisers.
Meanwhile, TikTok capitalises on its growing market appeal, thriving in the social media landscape.
