There’s big news coming out of Elon Musk’s largest acquisition as X have turned to sell their ad inventory programmatically for the first time. Earlier this year, X recently introduced ad inventory outside of their standard home feed, with advertisers able to appear in comment sections under popular posts within the search results and on the account pages of highly followed accounts. However, advertisers will be restricted to X’s home feed because this additional inventory will not be available to advertisers to buy programmatically. Regardless, this is a significant change for the walled gardens with X losing substantial advertising control over their platform for solely monetary purposes.
At current, only allowing advertisers across X’s home feed is the safest bet because it has the most integrations with third-party brand safety providers, which is a present necessity given X’s content must now adhere to Google’s publisher standards with selling their inventory programmatically. These brand safety partners are crucial inclusions in campaign setup, with brand safety becoming a progressively larger issue across the platform, advertisers can opt out of targeting X if they desire.
Now, why are X doing this? As alluded to earlier, X are desperately trying to recoup lost revenue ever since Musk took over. Insider Intelligence slashed its forecast for X’s 2023 ad revenue to $2.98 billion, which is down 37% on the projection made in October for the same period, prior to this programmatic news surfacing. This is based on the company continuing to struggle to get to grips with issues ranging from content moderation to tech glitches, alongside a heavy number of redundancies that mean advertisers are left guessing why their rep isn’t responding to their emails.
Allowing your inventory to be bought programmatically across the open marketplace, in theory, should open the floodgates for advertiser revenue to pour in due to its cost-efficient and unparalleled reach. Initially, there is no doubt this will happen and will temporarily balance their books, however, if Elon wants this to be a long-term solution, he is setting himself up for failure without the backing of a strong programmatic and sales team in place. Musk’s revolutionary business model of sacking everyone may just come back to bite him.
Could this all be an elaborate and orchestrated plan by Musk that snowballs a shift toward more walled gardens conforming to the idea of programmatic buying? Regardless, it’ll be interesting to see how this unfolds and how X adapts to the everchanging advancements of programmatic buying.