In case you missed the news, Twitter is gone. X is now King.
Elon Musk’s rebrand of Twitter to X has left many scratching their heads – and many in marketing watching with interest to see how X will build a brand identity and start to convince advertisers to spend the type of money Musk needs to keep the platform in the black.
To do that, X is trying to highlight the benefit of advertising on the platform via its official business account. In doing so, it also amplifies the reach and exposure of the campaigns it picks to highlight – such as Samsung’s campaign for its new Galaxy Fold and Flip offering.
X is still the most powerful platform for launching new products.
— Business (@XBusiness) July 26, 2023
It’s also offering huge discounts to advertisers to try and keep them on the app, reported the Wall Street Journal.
X this week began offering some advertisers reduced pricing on video ads that run alongside a list of trending topics in X’s “Explore” tab, according to emails viewed by the Journal. Such ads give brands 24-hour placement atop the site’s list of trending topics.
It is offering 50% off any new bookings of those ads until July 31, among other discounts. “The goal of these discounts is to help our advertisers gain reach during crucial moments on Twitter such as the Women’s World Cup,”
The discounts have been offered on select ad formats to brands in the UK and US along with a warning that they would lose their verified status unless ad spend thresholds of $1,000 in the previous 30 days or $6,000 in the previous 180 days were met.
There are currently three types of verification on the app. Individuals get blue badges, organisations go grey and businesses get gold. It already costs $1,000 a month (not including tax) to be verified as a business, plus $50 for each affiliate account – although verification comes for free once brands spend $1,000 a month on ads.
The effort to tie brand verification to ad spend is a slightly odd carrot-and-stick approach that represents some of the chaos that has followed the app formerly known as Twitter since Musk took over in October 2022 and is clearly an attempt to corral brands into spending more money with X as it faces drops in ad revenue.
Financials in need of a boost
Which brings us to this. In July, Musk tweeted (or posted) that X has experienced a 50% drop in advertising revenue and is still lumbered with heavy debt totalling US$13 billion in bank loans taken on as part of the acquisition of Twitter.
“We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.”
He did add that July ad revenue looks “a bit more promising”, but failed to elaborate further on what that means.
Additionally, the platform owes former employees laid off by Musk around AUD$734 million. To help increase ad revenue, the platform recently hired Linda Yaccarino as chief executive. Yaccarino is the former head of advertising with NBCUniversal and is tasked with bringing brands back to the platform, said the Wall Street Journal.
Usage on the high?
Despite poor ad revenue, Musk claims that users have flocked to the platform and now number a “new high” of 540 million. If true, that marks an incredible increase for X, which had 229 million monthly active users in May 2022. According to Musk, the platform added 1.6m daily active users in one week in November 2022.
Increased users could make the platform more valuable to brands, which could help X begin to claw back some of the lost advertising revenue.