(CLO) Billionaire Elon Musk's support for Donald Trump is expected to help social network X (formerly Twitter) restore business, as some brands begin to return to advertising on this platform to gain support from the new administration.
Some brands are preparing to reinvest in X, according to media executives who spoke to the Financial Times, as billionaire Elon Musk is expected to play a major role in the incoming Trump administration, especially given his appointment as co-chair of the Commission on Effective Government. Marketers are hoping that this will help them gain “ political leverage,” especially if they need access to federal government contracts.
Billionaire Elon Musk has enthusiastically supported Donald Trump's election campaign through the X platform. Photo: FT
X's revenue has plummeted since Musk bought the platform for $44 billion two years ago, with X now estimated to be worth less than $10 billion. Major brands including Disney, IBM and Apple have pulled out over concerns that Musk will ease up on content moderation.
Brands return to X, partly because of politics
Lou Paskalis, CEO of marketing consultancy AJL Advisory, said some brands will return to advertising on X to show political support. This could help them maintain good relations with Musk, who plays a key role in the Trump administration. Some experts even think X could become the official media channel for the White House.
Elon Musk predicts that supporting Trump will help X attract advertisers again. In an interview with Joe Rogan, Musk said that “if Trump wins, most of the boycott will be lifted.” Musk recently shared a chart showing the number of global users hitting a new high, claiming that the platform is experiencing “all-time high usage.”
Linda Yaccarino, CEO of X, also supported this view, noting that X will become an important communication channel for political candidates. Some investors, such as Shaun Maguire of Sequoia Capital, expressed optimism that investing in X will pay off, despite initial skepticism.
X still faces many challenges
The US election had a mixed impact on X's user base. Data from Similarweb shows that X's website recorded its best traffic of the year in the US on the day after the election, but at the same time, 115,000 US users deleted their X accounts on that day, the highest number since the platform began tracking.
Additionally, X is likely to merge with Truth Social, Mr. Trump’s social media platform, according to several sources. This would create a new space for conservatives and Trump supporters to exchange information.
X has also struggled financially. Morgan Stanley and its partners are expected to hold the $13 billion debt from Musk’s acquisition of X until 2025. Even in the face of trouble, X will continue to make interest payments. In September, banks abandoned hopes that Musk would use Tesla or SpaceX stock as collateral to repay some of the debt.
Data shows that advertising on X has declined sharply, with only 7 of the top 200 advertisers returning in 2024. However, X says nearly 90% of the top advertisers from 2023 are still advertising on the platform, with half increasing their spending year-over-year.
With support from the Trump administration, billionaire Musk can hope that X will restore its position in the social media and marketing industry, although many challenges still lie ahead.
Cao Phong (according to FT)
Source: https://www.congluan.vn/mang-xa-hoi-x-sap-hot-bac-khi-cac-nha-quang-cao-muon-lay-long-ty-phu-elon-musk-post321269.html
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