Fear and favor are bringing advertisers back to X under Musk

A hot potato: Advertisers who abandoned X en masse following Elon Musk's takeover are returning to the platform. Companies had been concerned about associating with the service and Musk's controversial antics, but it seems his position in the Trump administration is convincing firms to return in the hope there will be political benefits.

In November 2023, IBM suspended its advertising on former X, formerly Twitter, after a report from a media watchdog said one of its ads appeared next to posts that promoted Hitler and the Nazi party.

Apple, Walt Disney, Comcast, Warner Bros, and others also suspended advertising on the platform, leading to a frustrated Musk telling the advertisers to "go f**k yourself" and insisting he didn't want them back. Musk later claimed his profane statement was more of a point highlighting freedom of speech.

Watch my conversation with @ElonMusk: https://t.co/YedkELVhFn

Since then, Musk has become a senior advisor to President Trump and found himself head of the Department of Government Efficiency (DOGE).

Now, X is on track to record its first year of advertising growth since Musk took over in 2022. According to eMarketer, X is predicted to generate $1.31 billion in US advertising sales, up 17.5% year-on-year. It's a similar picture globally, with sales projected to grow 16.5% to $2.26 billion.

Emarketer Principal Analyst Jasmine Enberg told Bloomberg that some of the spending growth is being driven by fear as big advertisers return in an effort to curry favor with the Trump administration.

However, it's worth noting that even if X does meet those projections, the company's advertising business would still be bringing less money than before Musk took over. Twitter, as it still was at the time, reported advertising revenue of $4.5 billion in 2021, its final full year as a public company.

Would advertising on X really benefit companies politically? The Wall Street Journal wrote earlier this year that X CEO Linda Yaccarino had suggested that if brands don't start spending money on X again, they could face extra government scrutiny. Advertiser Interpublic Group, which is in the midst of a merger with rival Omnicom Group, took notice and signed a new annual deal with X for potential client spending.

Despite the increased advertising revenue, X has seen daily active iOS and Android users fall 22.1% from Election Day. Rivals Threads and Bluesky, meanwhile, have seen their user activity increase.