Advertisers cut spending on X by 55% before Super Bowl
Ahead of this year's Super Bowl, advertising spending on X has plummeted by 55%, reported MediaRadar, an advertising intelligence and sales enablement platform. Last year itself, Adweek, an American advertising trade publication, reported major brands like NFL Enterprises, McDonald's, YouTube, and Oreo shifted their ad strategies to platforms such as TikTok and Reddit. MediaRadar CEO and co-founder Todd Krizelman links the latest decline to concerns over brand safety and Elon Musk's plans to focus on smaller advertisers.
Why does this story matter?
The Super Bowl, an annual spectacle in the United States, generates millions in revenue as brands vie for attention. Traditionally, major advertisers have heavily invested in platforms like X, formerly Twitter. Super Bowl Sunday marks the peak of advertising fervor, with brands fueling a $1 billion industry to captivate the massive audience. While historically, these brands have utilized X to extend their reach, a reversal of this trend is evident this year.
Ad revenue drops as large advertisers reduce spending
According to MediaRadar, NFL Enterprises, McDonald's, YouTube, and Oreo collectively invested $48.4 million on X advertising ahead of last year's Super Bowl, marking a 16% surge from 2022. However, these advertisers significantly reduced spending by 55% to $21.1 million now. BetMGM played a significant role in the decrease, slashing its spending by 87%. Despite that, the gambling platform recently forged a partnership with X to prominently feature sports betting statistics. This likely lessened its reliance on advertising.
High costs and brand safety concerns drive advertisers away
Creating a promoted trending topic on X during the Super Bowl costs $7,00,000, according to AdAge magazine. Although this is much cheaper than a 30-second game ad, which ranges from $6.5-7 million, brands are still distancing themselves from X due to safety concerns. These issues emerged after Musk's takeover led to the dismantling of the platform's safety team, reports of ads appearing alongside pro-Nazi posts, and the CEO reaffirming comments that have been criticized for their antisemitic nature.
Dubious ads becoming more noticeable on X
Insider Intelligence reveals that ad spending on X generated $1.89 billion in US revenue last year, marking a 54% decrease from 2022. Prominent advertisers still on the platform are increasingly promoting AI "undressing" apps and questionable crypto services, per Business Insider. Jeff MacDonald, social strategy director at ad agency Mekanism, stated that dubious ads gaining prominence on X is "proof that the large advertisers are gone." He said it demonstrates the platform's "race to the bottom."
