Elon Musk’s X Cuts Ad Prices to Bring Back Advertisers: Report
X formerly known as Twitter, is implementing a new strategy to attract brands back to its platform by reducing prices for certain ad formats in the U.S. and U.K.
The company has sent out emails to advertisers, viewed by the Wall Street Journal, warning that brands could lose their verified status if they fail to meet specific ad spending thresholds.
Parent company X Corp., which relies heavily on advertising for its revenue, has found it challenging to attract new ad commitments since Elon Musk took ownership. This is partly due to brands’ apprehensions about Musk’s content moderation policies. The current downturn in the advertising industry has also led to several media companies offering discounts to brands.
This week, X Corp. initiated a new offer, providing some advertisers with discounted pricing for video ads that appear next to the list of trending topics in the platform’s “Explore” tab, as per emails seen by The Wall Street Journal. These ads offer brands a 24-hour placement at the top of the site’s trending topics list.
On July 14, Musk said, “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,” referring to Twitter, before it transitioned to X.
X Corp. is offering a 50% discount on any new bookings for these ads until July 31, among other incentives. “The aim of these discounts is to assist our advertisers in gaining reach during key moments on Twitter, such as the Women’s World Cup,” one of the emails stated.
In addition, X Corp. has cautioned advertisers that from August 7, brands’ accounts will be stripped of their verification—a gold check mark signifying their account’s authenticity—if they haven’t spent at least $1,000 on ads in the past 30 days or $6,000 on ads in the past 180 days, according to the email.
Musk responded to the WSJ report to say, “Or they can just pay $1000/month for a verified organization subscription with the ability to convey that organizational authority to affiliates. This more than pays for itself in organic reach.
The reason for the $1000/month is to set a moderately high bar to be a verified org, so that an org must be of non-trivial size to qualify and to make it expensive for scammers to create millions of accounts.”
Or they can just pay $1000/month for a verified organization subscription with the ability to convey that organizational authority to affiliates. This more than pays for itself in organic reach.
The reason for the $1000/month is to set a moderately high bar to be a verified org,…
— Elon Musk (@elonmusk) July 26, 2023