UK social media platform X sees significant decline in advertising revenue after Elon Musk’s acquisition, citing concerns over brand safety and content moderation.
The UK arm of social media platform X, formerly known as ‘Twitter’ , has reported a significant decline in advertising revenue after Elon Musk‘s takeover last year.
A decline in advertising spending amid concerns about ‘brand safety and/or content moderation‘ were cited as the reason for the fall in advertising income. According to accounts filed this week to Companies House, X UK Ltd narrowly averted being struck off last month for failing to file the accounts on time.
Brand safety refers to the practice of ensuring that a brand's advertising is not placed alongside content that may be detrimental to its reputation.
This includes avoiding placement on websites, videos, or social media platforms with explicit or misleading content.
According to a study, 75% of marketers consider brand safety as a top concern when placing ads online.
To mitigate risks, brands use various tools and techniques, such as keyword blocking, geo-targeting, and contextual analysis.
The company’s overall revenue totalled £69.1m, down from £205.3m in 2022, a decrease of 66.3% year-on-year. The profit for 2023 dropped from £5.6m the previous year to £1.2m. Pre-tax profits were 74% lower at £2.25 million.
Musk’s takeover also led to a wave of sackings, with the billionaire telling the BBC in 2023 that only 1,500 of about 8,000 Twitter employees in total were still employed at the company in that year. In the UK, the accounts show that the number of the company’s employees fell to 114, from 399 the previous year.
Despite its struggles, the value of X soared back earlier this year to $44bn Musk paid for it and last month his txAI artificial intelligence firm acquired the business for $33bn. However, experts say that the company’s recovery will depend on its ability to support advertisers and implement brand safety measures.
‘The indicators have been there all along,’ said Farhad Divecha, a digital advertising expert who is chief executive of AccuraCast and founder of ‘Unyte.AI’ . ‘If anything, I think we’ve seen the worst and X might finally have the chance to recover advertiser revenues, but that’s only going to happen in UK and Europe if Musk and his crew pull their act together, provide support for advertisers and put in place some brand safety guardrails.’
- theguardian.com | X’s UK profits collapsed the year after Elon Musk’s takeover
