Ayodeji Ayenuwa
In a recent development, Walmart, the largest retailer in the United States, has decided to halt its advertising on Elon Musk’s social media platform, X (formerly Twitter).
This decision comes amidst a broader trend, with major companies like Disney and Apple suspending ads on the platform following Musk’s endorsement of an antisemitic post, a move that has triggered a substantial decline in X’s ad revenue.
According to estimates, potential costs could reach $75 million by the end of 2023.
Immediate Impact on Walmart’s Advertising Strategy:
A spokesperson from Walmart explained, “We aren’t advertising on X as we’ve found other platforms to better reach our customers.”
This statement emphasizes a shift in Walmart’s advertising preferences, opting for platforms that align more closely with their customer base.
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Although Joe Benarroch, X’s head of business operations, mentioned that Walmart had already ceased advertising on X in October, the recent controversy surrounding Musk’s statements has accelerated the departure of advertisers from the platform.
Escalating Fallout from Musk’s Statements:
Musk, at the DealBook Summit, expressed concerns about the advertiser boycott, stating it could potentially “kill” the company, and added, “And the whole world will know that those advertisers killed the company.”
In an attempt to address the controversy, Musk apologized, saying, “I am quite sorry. I should, in retrospect, not have replied to that particular post.”
Market Response and Future Viability of X:
The fallout has led to a marginal decline in Walmart’s stock. Despite this, the retailer maintains an overall positive trajectory, with a 7% increase in share price for the year.
This situation raises questions about X’s viability in the competitive social media landscape, as major advertisers, including Apple and Disney, continue to distance themselves from the platform.
Walmart’s decision, combined with similar moves by other major brands, underscores the challenges faced by X. Musk’s attempts to address the controversy and shift blame onto departing advertisers have added to the platform’s tumultuous situation.
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