Advertisers are increasingly redirecting their marketing budgets towards Tiktok as trust in Elon Musk’s platform X continues to dwindle.
Some 77 per cent of marketers plan to boost their ad spend on Tiktok in 2024, reflecting the platform’s growing corporate appeal, according to new data from market research firm Kantar.
By contrast, only 14 per cent are looking to decrease their advertising budgets on X as the site grapples with a tarnished reputation among advertisers. Last year, six per cent of marketers were expecting to increase investment in the platform then known as Twitter.
This shift in advertiser loyalty comes as X, under Musk’s leadership, has declared “war” on marketers who have boycotted the social media site.
Last week, it filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM) and the World Federation of Advertisers (WFA), suggesting potential “criminal liability via the RICO Act,” a federal law initially designed to combat organised crime.
The lawsuit, which claims that the alleged boycott has collectively cost X billions in advertising revenue, X has accused GARM of orchestrating a “systematic illegal boycott” against the platform.
In response, the WFA announced that it would discontinue GARM operations due to a lack of financial resources to continue fighting Musk in court.
“GARM is a small, not-for-profit initiative, and recent allegations that unfortunately misconstrue its purpose and activities have caused a distraction and significantly drained its resources and finances,” the WFA said on Friday.
But Jane Ostler from Kantar questioned whether the situation at X truly constitutes a boycott or if it is simply a reflection of a broader decline in marketer confidence.
“Marketers’ perceptions of X are that it is neither particularly trustworthy nor innovative; two hurdles it needs to overcome to win back media spend from advertisers,” she said.
Meanwhile, Tiktok is capitalising on the advertiser exodus. It recently told City A.M. it has seen a 25 per cent surge in revenue following the launch of a campaign featuring GB athletes during the Olympics, thanks to advertisers ramping up spend during this period.
Blake Chandlee, president of global business solutions at Tiktok, recently said that the platform’s business is “growing faster year-over-year now than we were last year.”
As X’s legal and reputational challenges mount, Musk is set to livestream a conversation with former US President Donald Trump on X Spaces, promising “entertainment guaranteed”.
The “unscripted” discussion, with no limits on subject matter, is scheduled for 8pm ET (00:00 GMT) on Monday.
City A.M. has approached X for comment.