Hi, everybody. Welcome back to the Elon Musk
podcast. Today, we're focusing on the
precarious financial situation at X, formerly known as Twitter.
And the topic at hand centers on the drastic decline in
advertising revenue, challenging the optimistic picture presented
by Elon Musk and CEO Linda Yaccarino.
Notably, a recent report from marketing consultancy Ubiquity
indicates that the number of top advertisers on X has plummeted.
We're not talking about a small dip here.
The statistics are actually staggering.
Coupled with this issue is the introduction of a $1.00 annual
fee for new users, a move explained as an anti spam
measure but raising eyebrows as potentially a last ditch effort
to generate revenue. And as we examine the data in
the leadership's public statements, the critical
question emerges. Is X in the midst of a
resurgence or is it teetering on the edge of financial collapse?
Now stick around. We explore a few of these topics
to see where X may be going and see where it's been.
And 1st up, let's talk about the Ambiquity report.
This consultancy works with 70 out of the 100 top spending
advertisers, A respectable chunk of the advertising world
Ambiquity revealed that only two of their clients bought ads on X
last month. It declined from 31 in September
of 2022. That's not just a decrease,
that's a huge freefall. And to compound with this issue,
Ruben Schurz, Ambiguity's Chief Strategy Officer, stated that
this level of advertising departure is unprecedented for a
major advertising platform. This dire situation blatantly
contradicts the upbeat narrative advanced by Elon Musk and Linda
Yaccarino, who've been claiming a return to normalcy.
You know, it's not just the loss of revenue that's concerning.
It's also the credibility of the platform's leadership.
If Musk and Yaccarino are not transparent about the real state
of affairs, it raises some questions about whether they can
be trusted. Now, Ubiquities findings cast a
shadow of doubt over the public statements coming out of X's
corner offices. Now let's shift our focus a
little bit to the one dollar annual fee that X has started
charging new users in just New Zealand and Philippines for the
time being. On the surface, Elon Musk argues
this is designed to deter bots and spam from polluting the
platform. However, credits are skeptical,
speculating whether this is just desperate move to scrape
together some more revenue. And also, do most bots come from
New Zealand in the Philippines? No one really knows.
And adding another layer to this issue is how this fee might
deter new user adoption. While a dollar may not seem like
a lot, it's a psychological barrier for people used to free
social media platforms. This could push potential new
users toward alternative platforms that don't charge an
entry fee, like Threads from Meta.
And the existing user base also might view this new fee as a
worrying sign of things to come. If X is willing to charge new
users, what stops them from monetizing other aspects of the
platform? Will this be the first in a
series of charges leading to a fundamentally different user
experience? It's only time that'll tell now.
From the advertiser standpoint, this situation is quite grim.
A report from News Guard noted A majority of viral misinformation
concerning the Israel Hamas conflict on X originated from
verified users. This is a significant concern
for advertisers, who must consider brand safety.
They don't want to associate themselves with a platform that
becomes a breeding ground for misinformation now.
Moreover, a report by digital marketing firm Similar Lab
indicated a significant decline in user traffic on X.
With fewer eyeballs on the platform, the value proposition
for advertisers dwindles. It's kind of a snowball effect
as users leave, advertisers find less value, which in turn makes
the platform less attractive to new users.
And Musk's decision to appoint Lydia Ocarina, formerly of NBC
Universal is CEO, seemed to be a move aimed at restoring
advertiser confidence. However, with the erratic policy
changes and lack of consistency and leadership, advertisers may
not be convinced that X is as stable or as a reliable platform
for their campaigns. So where does all this leave us
now? To put it plainly, X is
navigating troubled waters. Between the decline in
advertisers and the new user fee, there's a disconnect
between what the leadership portrays and what the data
reveals. This raises concerns not just
about the platform's financial stability, but also about the
credibility of its leaders, Elon Musk and Linda Yaccarino.
And we've discussed the Ubiquity report detailing the alarming
drop in advertisers, explored the implications of the new
$1.00 fee, and consider the perspective of advertisers who
are increasingly reluctant to invest in X.
Taken together, these elements paint a picture of a platform
facing a multitude of challenges, with a leadership
whose public statements are increasingly being called into
question. Now let's shift gears a little
bit from the advertisers to the users.
X has seen a significant decline in daily active users since
Musk's takeover, and changes to the platform have been largely
unpopular. We'll break down some of the
story into five essential Parse to give you a comprehensive look
of what's happening at X under Elon Musk's control.
Now Aptopia, a leading mobile research firm, recently revealed
that since Elon Musk's acquisition is subsequent
rebranding of Twitter as X, the app has lost about 13% of its
daily active users. The user base has contracted
from 140 million to around 121 million and the decline shows no
signs of stopping. This comes as a stark contrast
to the claims made by Ex's CEO Linda Yaccarino that the usage
of the platform is at an all time high.
While the app may have had a momentary spike in new users
following Musk's acquisition, the data indicates that this was
short lived. This new information should
quell any debate over Musk's positive impact on the platform,
revealing instead all waning user base and dwindling
engagement levels. Now, under Musk's leadership, X
has undergone several changes that have not been well received
by the user community. The platform was initially known
for delivering real time updates on current events, giving it a
unique edge over the competition.
However, changes to the News Feed algorithm now favor
profiles that are far from traditional news sources such as
ChatGPT, Influencers and Edge Lords.
Additionally, the introduction of a paid verification feature
has put a strain on users ability to identify credible
sources. The platform has consequently
seen less engagement and has given users fewer reasons to
stay on board. Now when Musk decided to rebrand
Twitter to X, he discarded a brand name that despite its
issues, was globally recognized. This decision has had a
significant impact on the platform and in the months
following, the rebrand X experienced a month over month
loss of more than 5% of its daily users, and user reviews
indicate that the new brand and logo are not resonating with the
community, exacerbating the decline in user numbers.
According to Aptopia's Adam Blacker, there was a roughly
2000% spike in negative daily app reviews post rebrand, with
the terms Logo and Bluebird appearing as top keywords with
negative sentiments. And while X is seeing a decline,
Meta's Twitter clone threads hasn't been able to capitalize
on this opportunity either. Initially touted as a potential
Twitter killer, Threads has struggled to maintain user
engagement. Data shows that only about 10%
of X users have ever tried. Threads in its current user base
is far from hitting any significant milestones, but
Threads reluctance to incorporate Real Time's news
into his platform has also Hanford its ability to engage
users. This could have been an
excellent opportunity for Threads to fill the void left by
X, but Meta's hesitance to re enter the news arena has put a
damper on that possibility. And the decline of X and the
stagnation of Threads indicate a significant shift in what users
are seeking from social media platforms.
And with the availability of alternative platforms like
Tiktok for entertainment and traditional online publishers
for news, XS Model seems to be losing its appeal.
One year into his ownership of X, Elon Musk is grappling with
the reality that the platform may not be the mass draw it was
once considered to be. And as Musk begins to charge for
essential functions on X, the door may be opening for another
competitor to take the stage. However, the existing trend
suggests that the type of platform might not be what the
public really wants anymore. Now, thank you so much for
tuning into this episode of the Elon Musk Podcast today.
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