X has continued to make interest payments on the debt, even with its business challenges. Bankers as recently as September had given up on the prospect of convincing Musk to use his Tesla or SpaceX stock as collateral for a margin loan to pay down a portion of X’s loans.
Bolstering X’s flailing business will require work. Total US ad spend among the top 100 advertisers on X in the first half of 2024 was down 68 percent compared with the first half of 2022, before Musk acquired the platform, according to estimates from market intelligence group Sensor Tower.
The data shows that only 7 out of the top 200 advertisers on X that ceased ad spend in the final quarter of 2022 have returned to the platform in 2024. They have largely been replaced by advertisers that are completely new to X or did not exist in 2022, while spending significantly less than previous marketers.
Emarketer estimates the company will bring in $1.9 billion in advertising revenue this year, down from $2 billion last year and around $4.5 billion in 2021, prior to the takeover. Musk has privately called chief executives of brands to berate them for leaving the site, while publicly singling out others such as Disney’s Bob Iger.
He has also taken legal action. In August, X filed a lawsuit against the Global Alliance for Responsible Media, a coalition of brands and advertising agencies, as well as members such as Unilever, Mars, and CVS Health. It alleged the defendants had “colluded” to boycott X after Musk’s acquisition, limiting consumer choice in breach of antitrust laws.
Garm has since shut down, saying the claims “misconstrue its purpose” but “significantly drained its resources and finances.”
Industry insiders suggested the action was having an effect. Last month, after Unilever took up spending again on X, it was quickly dropped from the lawsuit. One advertiser said that their agency had been warned following the legal action to be careful about what they communicate in writing about the billionaire and X internally.
Other advertising chiefs said many brands will remain reluctant to trust X and argue its ads offering is inferior to rivals such as Meta and TikTok.
X has increasingly become “an Elon echo chamber,” said a top executive at an advertising company. “It’s a cesspit and many clients do not want to be part of that.”
“Trump’s victory may well mean brands give X a second chance in 2025,” said Richard Exon, founder of ad agency Joint, but warned they “will be wise to proceed with extreme caution.”
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