X's Bargain Basement Advertising

A report published by marketing agency Gupta Media reveals the extent to which the social media platform X (formerly Twitter) has been struggling to generate advertising revenue since it was officially acquired by entrepreneur Elon Musk in October 2022. Specifically, the study reports on the development of the cost per thousand impressions (CPM), an indicator used to compare the value of advertising space.

As the study's authors describe, when a platform's cost per thousand (CPM) falls, as was the case for Facebook during the Covid pandemic in 2020, its advertising revenues also tend to fall. Conversely, when CPM rises, as is usually the case during Black Friday and Cyber Monday for example, advertising sales tend to follow the same curve.

As this infographic shows, Twitter/X's CPM has plummeted by over 75% since the social network came into Musk's hands, falling to $0.65 in August 2023 (from $5.77 in September 2022), its lowest level in three years. At the time of the company's Q2 results last July, Musk admitted to "a drop of around 50% in advertising revenues" since the platform's takeover.

Over the covered period, Twitter/X saw by far the biggest annual drop in CPM of all the platforms studied. Under the leadership of the polarizing billionaire, X has seen a significant reduction in moderation teams coupled with an upsurge in misinformation and hateful conduct on the platform. Advertisers have as such become increasingly concerned and many have halted their advertising activity there.