Major brands are now spending small amounts of money to advertise on the X platform, which was acquired last week by Elon Musk’s xAI, in a bid to avoid being seen as boycotting the platform and to avoid a public spat with the billionaire, the Financial Times reports.
Image source: X
Since Musk’s rise to prominence under US President Donald Trump, many companies have opted to spend token amounts of money on X ads rather than risk damaging their relationship with him. The situation has also been impacted by lawsuits Musk has filed against companies that stopped advertising after his $44 billion acquisition of Twitter in late 2022. Last month, X added about half a dozen companies to its lawsuit, including Shell, Nestlé, Pinterest and Lego.
«”It could be any amount that’s big enough to keep us off the naughty list,” said Lou Paskalis, CEO of marketing consultancy AJL Advisory and a former media executive at Bank of America. That approach is better than risking negative press from Musk, which could depress the company’s stock price and cause significant losses, he said.
Musk and X CEO Linda Yaccarino have set a goal to grow the platform’s advertising revenue to 2022 levels, the people said. X’s revenue will grow to $2.3 billion this year, up from $1.9 billion a year earlier, according to eMarketer, but that’s still well short of the $4.1 billion the platform earned in 2022, before Musk bought it.
Overall U.S. ad spending on X fell 2% year over year in the first two months of 2025, despite the recent return of major advertisers like Hulu and Unilever, according to research firm Sensor Tower. American Express also resumed advertising on the platform this year, but its spending is down about 80% compared to the first quarter of 2022.
Meanwhile, four of the largest advertising agencies – WPP, Omnicom, Interpublic Group and Publicis – have recently struck deals or are in talks with X to set annual spending targets. These agreements are part of so-called “advance agreements,” which require agencies to buy ad slots in advance.
Sensor Tower also reports that among X’s top advertisers in 2025, 35 companies did not advertise on the platform in 2023, indicating that it is “attracting a new wave of advertisers.” These include MAGA retailer Rock Paper Sizzle, caffeinated beverage brand Celsius, and telehealth group Hims & Hers.
Insiders are seeing a rise in smaller brands using self-service tools, as well as new AI solutions offered by X’s Grok chatbot to automate ad campaigns. “They will return [to previous ad revenue levels], it’s just going to be a different mix of advertisers,” one source said.
Not all experts share this optimism, however. Ruben Schreurs, CEO of Ebiquity, which analyzes brands’ marketing spend across platforms, said he “doesn’t expect an imminent return to the previous levels of advertising budgets directed to X.”