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X -Formerly Twitter - Losing Users and Advertisers · Elon Musk Podcast

• 0:00
  Hi, everybody. Welcome back to the Elon Musk
• 0:02
  podcast. Today, we're focusing on the
• 0:05
  precarious financial situation at X, formerly known as Twitter.
• 0:09
  And the topic at hand centers on the drastic decline in
• 0:12
  advertising revenue, challenging the optimistic picture presented
• 0:15
  by Elon Musk and CEO Linda Yaccarino.
• 0:19
  Notably, a recent report from marketing consultancy Ubiquity
• 0:23
  indicates that the number of top advertisers on X has plummeted.
• 0:27
  We're not talking about a small dip here.
• 0:29
  The statistics are actually staggering.
• 0:32
  Coupled with this issue is the introduction of a $1.00 annual
• 0:35
  fee for new users, a move explained as an anti spam
• 0:38
  measure but raising eyebrows as potentially a last ditch effort
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  to generate revenue. And as we examine the data in
• 0:45
  the leadership's public statements, the critical
• 0:48
  question emerges. Is X in the midst of a
• 0:50
  resurgence or is it teetering on the edge of financial collapse?
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  Now stick around. We explore a few of these topics
• 0:57
  to see where X may be going and see where it's been.
• 1:00
  And 1st up, let's talk about the Ambiquity report.
• 1:03
  This consultancy works with 70 out of the 100 top spending
• 1:07
  advertisers, A respectable chunk of the advertising world
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  Ambiquity revealed that only two of their clients bought ads on X
• 1:14
  last month. It declined from 31 in September
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  of 2022. That's not just a decrease,
• 1:20
  that's a huge freefall. And to compound with this issue,
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  Ruben Schurz, Ambiguity's Chief Strategy Officer, stated that
• 1:29
  this level of advertising departure is unprecedented for a
• 1:32
  major advertising platform. This dire situation blatantly
• 1:35
  contradicts the upbeat narrative advanced by Elon Musk and Linda
• 1:39
  Yaccarino, who've been claiming a return to normalcy.
• 1:42
  You know, it's not just the loss of revenue that's concerning.
• 1:45
  It's also the credibility of the platform's leadership.
• 1:48
  If Musk and Yaccarino are not transparent about the real state
• 1:51
  of affairs, it raises some questions about whether they can
• 1:54
  be trusted. Now, Ubiquities findings cast a
• 1:57
  shadow of doubt over the public statements coming out of X's
• 2:01
  corner offices. Now let's shift our focus a
• 2:05
  little bit to the one dollar annual fee that X has started
• 2:10
  charging new users in just New Zealand and Philippines for the
• 2:13
  time being. On the surface, Elon Musk argues
• 2:17
  this is designed to deter bots and spam from polluting the
• 2:20
  platform. However, credits are skeptical,
• 2:23
  speculating whether this is just desperate move to scrape
• 2:26
  together some more revenue. And also, do most bots come from
• 2:30
  New Zealand in the Philippines? No one really knows.
• 2:34
  And adding another layer to this issue is how this fee might
• 2:37
  deter new user adoption. While a dollar may not seem like
• 2:41
  a lot, it's a psychological barrier for people used to free
• 2:45
  social media platforms. This could push potential new
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  users toward alternative platforms that don't charge an
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  entry fee, like Threads from Meta.
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  And the existing user base also might view this new fee as a
• 2:59
  worrying sign of things to come. If X is willing to charge new
• 3:02
  users, what stops them from monetizing other aspects of the
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  platform? Will this be the first in a
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  series of charges leading to a fundamentally different user
• 3:11
  experience? It's only time that'll tell now.
• 3:14
  From the advertiser standpoint, this situation is quite grim.
• 3:19
  A report from News Guard noted A majority of viral misinformation
• 3:23
  concerning the Israel Hamas conflict on X originated from
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  verified users. This is a significant concern
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  for advertisers, who must consider brand safety.
• 3:33
  They don't want to associate themselves with a platform that
• 3:36
  becomes a breeding ground for misinformation now.
• 3:39
  Moreover, a report by digital marketing firm Similar Lab
• 3:42
  indicated a significant decline in user traffic on X.
• 3:46
  With fewer eyeballs on the platform, the value proposition
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  for advertisers dwindles. It's kind of a snowball effect
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  as users leave, advertisers find less value, which in turn makes
• 3:57
  the platform less attractive to new users.
• 4:00
  And Musk's decision to appoint Lydia Ocarina, formerly of NBC
• 4:04
  Universal is CEO, seemed to be a move aimed at restoring
• 4:08
  advertiser confidence. However, with the erratic policy
• 4:11
  changes and lack of consistency and leadership, advertisers may
• 4:16
  not be convinced that X is as stable or as a reliable platform
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  for their campaigns. So where does all this leave us
• 4:25
  now? To put it plainly, X is
• 4:27
  navigating troubled waters. Between the decline in
• 4:29
  advertisers and the new user fee, there's a disconnect
• 4:32
  between what the leadership portrays and what the data
• 4:35
  reveals. This raises concerns not just
• 4:37
  about the platform's financial stability, but also about the
• 4:40
  credibility of its leaders, Elon Musk and Linda Yaccarino.
• 4:45
  And we've discussed the Ubiquity report detailing the alarming
• 4:47
  drop in advertisers, explored the implications of the new
• 4:50
  $1.00 fee, and consider the perspective of advertisers who
• 4:54
  are increasingly reluctant to invest in X.
• 4:57
  Taken together, these elements paint a picture of a platform
• 5:00
  facing a multitude of challenges, with a leadership
• 5:03
  whose public statements are increasingly being called into
• 5:06
  question. Now let's shift gears a little
• 5:08
  bit from the advertisers to the users.
• 5:12
  X has seen a significant decline in daily active users since
• 5:15
  Musk's takeover, and changes to the platform have been largely
• 5:18
  unpopular. We'll break down some of the
• 5:20
  story into five essential Parse to give you a comprehensive look
• 5:23
  of what's happening at X under Elon Musk's control.
• 5:27
  Now Aptopia, a leading mobile research firm, recently revealed
• 5:30
  that since Elon Musk's acquisition is subsequent
• 5:33
  rebranding of Twitter as X, the app has lost about 13% of its
• 5:39
  daily active users. The user base has contracted
• 5:41
  from 140 million to around 121 million and the decline shows no
• 5:46
  signs of stopping. This comes as a stark contrast
• 5:49
  to the claims made by Ex's CEO Linda Yaccarino that the usage
• 5:53
  of the platform is at an all time high.
• 5:56
  While the app may have had a momentary spike in new users
• 5:59
  following Musk's acquisition, the data indicates that this was
• 6:02
  short lived. This new information should
• 6:05
  quell any debate over Musk's positive impact on the platform,
• 6:08
  revealing instead all waning user base and dwindling
• 6:12
  engagement levels. Now, under Musk's leadership, X
• 6:15
  has undergone several changes that have not been well received
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  by the user community. The platform was initially known
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  for delivering real time updates on current events, giving it a
• 6:24
  unique edge over the competition.
• 6:27
  However, changes to the News Feed algorithm now favor
• 6:30
  profiles that are far from traditional news sources such as
• 6:33
  ChatGPT, Influencers and Edge Lords.
• 6:36
  Additionally, the introduction of a paid verification feature
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  has put a strain on users ability to identify credible
• 6:42
  sources. The platform has consequently
• 6:44
  seen less engagement and has given users fewer reasons to
• 6:47
  stay on board. Now when Musk decided to rebrand
• 6:51
  Twitter to X, he discarded a brand name that despite its
• 6:54
  issues, was globally recognized. This decision has had a
• 6:57
  significant impact on the platform and in the months
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  following, the rebrand X experienced a month over month
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  loss of more than 5% of its daily users, and user reviews
• 7:08
  indicate that the new brand and logo are not resonating with the
• 7:11
  community, exacerbating the decline in user numbers.
• 7:15
  According to Aptopia's Adam Blacker, there was a roughly
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  2000% spike in negative daily app reviews post rebrand, with
• 7:24
  the terms Logo and Bluebird appearing as top keywords with
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  negative sentiments. And while X is seeing a decline,
• 7:31
  Meta's Twitter clone threads hasn't been able to capitalize
• 7:35
  on this opportunity either. Initially touted as a potential
• 7:38
  Twitter killer, Threads has struggled to maintain user
• 7:41
  engagement. Data shows that only about 10%
• 7:44
  of X users have ever tried. Threads in its current user base
• 7:48
  is far from hitting any significant milestones, but
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  Threads reluctance to incorporate Real Time's news
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  into his platform has also Hanford its ability to engage
• 7:57
  users. This could have been an
• 7:59
  excellent opportunity for Threads to fill the void left by
• 8:02
  X, but Meta's hesitance to re enter the news arena has put a
• 8:06
  damper on that possibility. And the decline of X and the
• 8:09
  stagnation of Threads indicate a significant shift in what users
• 8:12
  are seeking from social media platforms.
• 8:14
  And with the availability of alternative platforms like
• 8:17
  Tiktok for entertainment and traditional online publishers
• 8:20
  for news, XS Model seems to be losing its appeal.
• 8:24
  One year into his ownership of X, Elon Musk is grappling with
• 8:28
  the reality that the platform may not be the mass draw it was
• 8:31
  once considered to be. And as Musk begins to charge for
• 8:35
  essential functions on X, the door may be opening for another
• 8:39
  competitor to take the stage. However, the existing trend
• 8:42
  suggests that the type of platform might not be what the
• 8:46
  public really wants anymore. Now, thank you so much for
• 8:50
  tuning into this episode of the Elon Musk Podcast today.
• 8:53
  If you found this analysis useful, don't forget to hit the
• 8:56
  subscriber the follow button on whatever podcast platform you're
• 8:59
  on right now. It's free, only takes a second,
• 9:02
  and it helps us out tremendously.
• 9:04
  And remember, each episode is about 10 minutes or less to help
• 9:08
  you get quickly caught up on all things Musk.
• 9:11
  And until the next episode, please take care of yourselves
• 9:13
  and each other, and I'll see you in the next one.