Elon Musk’s Advertising War with X in 2024: A Year of Tension and Turnarounds

In 2024, Elon Musk found himself at the center of an escalating battle over X’s advertising revenue, with major brands distancing themselves from the platform, followed by lawsuits and public conflicts. This tension culminated in a year-long saga that saw Musk’s push for free speech absolutism clash head-on with advertisers’ concerns over brand safety.

The Catalyst: Musk’s $44 Billion Twitter Takeover
The controversy began shortly after Musk’s $44 billion acquisition of Twitter in 2022. Following the takeover, several major brands including Apple, Disney, and Coca-Cola suspended advertising on the platform, citing concerns over the moderation of content and the safety of their brand image. Musk’s inflammatory remarks and changes in the platform’s policies further strained relationships, creating a rift between X and its advertisers.

The Breaking Point: A Year of Boycotts and Legal Battles
The situation reached a boiling point in November 2023, during Musk’s appearance at The New York Times DealBook Summit, where his remarks caused another wave of brand departures, resulting in an estimated $75 million loss in advertising revenue. This period highlighted the ongoing clash between Musk’s free speech principles and the advertising industry’s focus on brand safety.

In a dramatic turn, Musk began to retaliate. In June 2024, during his appearance at the Cannes Lions festival, he tried to mend his relationship with advertisers, clarifying his stance on censorship and explaining that his previous comments had been targeted at certain advertisers, not the industry at large. However, by August, Musk’s frustration boiled over and he filed an antitrust lawsuit against several major brands and advertising entities, including Unilever, Mars, CVS Health, and the World Federation of Advertisers (WFA). He accused these organizations of orchestrating a coordinated boycott that he claimed cost X billions in lost revenue.

The War on Advertising: Musk’s Lawsuit and GARM’s Collapse
Musk’s public announcement of a “war” on advertisers in August 2024 shocked the advertising community. His lawsuit specifically pointed to the Global Alliance for Responsible Media (GARM), accusing it of conspiring to withhold advertising dollars from X. This sparked a fierce reaction, culminating in the unexpected dissolution of GARM in August, further disrupting the advertising industry’s established guidelines on brand safety.

This shift in the power dynamics between social media platforms and advertisers was further intensified when Congress held hearings on the matter, with Musk’s allies calling for testimony from key figures within GARM and other advertising bodies. It became evident that Musk was pushing back against the traditional advertising machinery.

The Turnaround: Resurgence in Advertising Investment
By October, there were signs of a détente. Musk dropped Unilever from the lawsuit, and the consumer goods giant struck an agreement with X, marking the beginning of a shift in the industry’s attitude. As November approached, a significant rebound in advertising revenue was reported, with MediaRadar data revealing that companies like Comcast, IBM, Disney, Warner Bros. Discovery, and Lionsgate Entertainment had increased their investments on the platform.

This resurgence in advertising came at a pivotal moment when Musk’s alignment with Donald Trump and his political influence appeared to boost X’s commercial prospects, alongside his $119 million reported campaign contribution to Trump’s 2024 re-election efforts.

Key Takeaways
Musk’s battle with advertisers in 2024 centered around his vision of free speech versus the industry’s demand for brand safety.
The dissolution of GARM marked a major turning point in advertising oversight and brand safety protocols.
Despite initial losses, X’s advertising revenue began to rebound in the latter part of the year, fueled by new agreements with major brands.
Musk’s political alignment with Trump seemed to play a role in restoring X’s financial footing.

Author: Sania Khan