On Wednesday, Emarketer predicted that advertising revenues at X, previously known as Twitter, would increase this year due to concerns among brands about potential backlash from the politically linked owner, Elon Musk, should they choose not to advertise.
The ultra-wealthy proprietor of X, who holds the title of the planet’s wealthiest individual, provides significant financial support to U.S. President Donald Trump. Additionally, this person leads a Department of Government Efficiency aimed at reducing the number of government workers.
"Numerous advertisers might consider investing in X as an essential expense for their operations to reduce possible legal or financial consequences," stated Jasmine Enberg, who is the principal analyst at Emarketer.
However, fear cannot serve as a lasting incentive, and the circumstances remain unstable, partially due to rising consumer dissatisfaction with Musk.
Additionally, the prediction that X would experience its first year of positive advertising revenue growth since 2021 took into account Meta's choice to eliminate or modify content moderation policies, as the corporation aligns more closely with Trump.
Industry observers anticipate that the harmful content that has thrived on X under Musk will also permeate Meta's platforms once these alterations come into play.
Emarketer anticipates that global advertising revenue will increase by 16.5% this year, following several years of decline since Musk acquired Twitter for approximately $44 billion in late 2022.
"Although X's advertising sector is showing signs of recovery, it’s still premature to label it as a full rebound," Enberg stated.
According to Emarketer, the anticipated revenue of the social media platform for this year will remain below what it was in 2019.
The analyst mentioned that X has succeeded in drawing advertisements from smaller enterprises that Twitter traditionally found challenging to secure.
Enberg believes that Meta's recent choice to relax content moderation efforts might be advantageous for X.
Emarketer predicts that Meta’s advertising revenue will increase by just over 11 percent in the U.S. for this year.
"Although advertisers remain concerned about brand safety, many are now realizing that they might not have as much control over the placement and appearance of their advertisements as they previously believed," Enberg stated.
The type of divisive and contentious material that led sponsors to withdraw from X is not considered acceptable anymore; however, there’s an impression that it might soon be inevitable.