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