The Daily: Can X Stem User Declines and What the Company Might Turn Into in 2025? | Dec 2, 2024
Dec 2, 2024
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The discussion dives into the ongoing user decline at X, formerly Twitter, under Musk's management. It highlights how staff cuts and policy changes have frustrated user engagement. Advertising trends are explored, with a focus on whether major brands will return despite revenue drops. There's contemplation on future developments for X in 2025, examining strategies for boosting engagement and navigating regulatory challenges. The podcast balances insights on political dynamics with the hurdles of content moderation.
X's significant decline in user engagement, primarily due to reduced content moderation, poses a serious challenge for retaining its user base.
Despite advertisers cautiously returning to X, concerns over content safety and potential revenue losses indicate skepticism about the platform's future viability.
Deep dives
User Declines and Content Moderation
X, formerly known as Twitter, has experienced a significant decline in user engagement since Elon Musk's acquisition, with active daily users in the US dropping by approximately 20% since 2022. The reduction in content moderation has created a less inviting environment for many mainstream users, as more disruptive and provocative content has gained visibility. Users have increasingly left the platform due to its inability to maintain a supportive and informative atmosphere, with findings suggesting that the lack of moderation not only deters users but also impacts ad revenue. Consequently, predictions indicate that user counts could continue to decline, potentially falling to 52 million by 2025.
Advertiser Return Amidst Challenges
Despite the decline in user engagement and brand value, some advertisers are tentatively returning to X, motivated by strategic interests rather than a revival of the platform's effectiveness as an ad medium. Brands, including Disney and Comcast, are seeking to cultivate favor with the Musk-led platform in anticipation of favorable regulatory conditions under a potential new administration. This is seen as a tactical approach to maintain influence and visibility, akin to tipping to ensure better service, even if the overall advertising spending remains low. However, over 25% of advertisers still plan to reduce their spending on X by 2025 due to ongoing concerns regarding content moderation and brand safety.
Future Prospects for X
Looking to the future, X appears set to continue its current trajectory, primarily aligned with Musk's vision rather than innovating significantly beyond its existing framework. Predictions suggest incremental improvements in content moderation may occur, but substantial changes aren't expected, as the platform remains fundamentally focused on Musk's interests. The competition with emerging platforms like Blue Sky could affect X’s market position, as thought leaders and users seek alternatives offering better user experiences. The upcoming year presents a critical phase in determining whether X can adapt to retain its user base and advertising revenue in an increasingly competitive landscape.
On today's podcast episode, why X is continuing to lose users, if they can turn their ad revenue fortunes around, and what the social media platform might morph into next year. Tune in to the discussion with Senior Director of Podcasts and host Marcus Johnson, Senior Director of Briefings Jeremy Goldman, and Analyst Daniel Konstantinovic.
This podcast is made possible by LiveRamp, a dynamic data collaboration platform trusted by leading companies to build strong relationships and deliver exceptional experiences. We hope you enjoy and you can learn more at LiveRamp.com to learn more.
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