Can X (formerly Twitter) win advertisers back, and get its main revenue stream back to at least the level that it was before Elon took over?
X’s ad revenue is reportedly still at least down 50% on its pre-Elon levels, and without a significant reversal, or a significant boost in its other revenue streams (subscriptions, data sales), it’s hard to see how the company will remain viable as an ongoing concern.
On that front, X has been making a bigger push of late, with X ad reps reaching out to many brands direct, while X has also been pitching key ad partners on coming opportunities, including advancing ad tech, improved influencer placement, AI, and more.
According to Digiday, X has been presenting a new pitch deck to selected brands, which includes notes on AI-powered search, peer-to-peer payments, premium content, and enhanced ad performance.
Though a lot of it is fairly vague at this stage.
First off, on AI-powered search. X is already working to integrate its “Grok” AI chatbot into its discovery elements, by providing summaries of trends on X within the Explore tab.
The next phase of that would see its AI tools directly powering user search, which could help to uncover more relevant matches.
Though as with all AI systems, there have also been problems with this. Grok’s summaries, thus far, have sometimes had trouble separating humor from fact, while it’s also created whole incidents that never happened, and amplified them in the tab.
How, exactly, X will look to use the same tech to improve its search results, for the benefit of brand partners, is not clear, but it’s one area that X is currently pitching as an opportunity.
Payments is also a key element of Musk’s “everything app” vision, though X is still a long way off from facilitating such.
This week, X has been granted money transmitter approval in Tennessee, which means that it now has money transmitter licenses in 25 U.S. states.
Which is another advance, though for context, X has been seeking money transmitter licences since mid last year, and there’s no definitive timeline on how long it will take the platform to get full approval in each state.
And that’s just the first step. From there, X would also need payment processor licensing as well, if it wanted to facilitate direct shopping in-stream. And this is just for the U.S.
So while it is gradually progressing, it’s still likely a year away, at the least, from even offering direct user transfers, as opposed to anything beyond that.
X has previously claimed that it plans to enable full payments and banking services within the X platform by the end of 2024. That seems unlikely, but it is making some progress on this front.
X’s pitch on premium content, meanwhile, relates to its new placement offering, which it tested with MrBeast earlier this year.
In order to give advertisers more options on ad placement, X is expanding its “Amplify” content sponsorship offering, which will enable brands to sponsor content from a chosen creator. X is still finalizing the details on this, and is working with selected creators to offer more monetization potential. But eventually, brands will have more options to choose specific content, from specific creators, to help boost their brands.
X has also been touting its improved AI audience matching and placement tools, which will help advertisers maximize their results. In recent testing of its updated AI-based ad placement, for example, X claims that advertisers saw a 10% increase in click-through rates, on average, and a 16% increase in conversions.
This has been another element of focus for X, though given the broader reduction in ad inventory, it’s hard to know whether these results will hold on a bigger scale.
Will these pitches get more advertisers interested in promotions on X?
Overall, it still seems like X’s biggest impediment is Elon himself, and his repeated political statements, and attacks on perceived opponents. Every time Elon shares such, he amplifies these claims to hundreds of millions of people in the app, and that would likely be the bigger concern among potential ad partners, most of whom have moved away from the app due to concerns about brand safety.
And with reports on that front suggesting that X is still placing ads alongside harmful content, those concerns still seem to be the biggest weight on its efforts.
I don’t think most of these concepts are going to be major lures, but maybe they will help X win back some ad partners.