Major brands are allocating light advertising budgets to Elon Musk’s X platform to avoid potential conflicts with the billionaire owner, according to Ars Technica.

Marketing execs reveal that companies feel pressured to maintain a presence on X, particularly following Musk’s prominent role in President Trump’s administration and recent legal actions against advertisers who ceased spending.

Lou Paskalis, CEO of AJL Advisory, explains, “It’s whatever amount is enough to stay off the naughty list. The far greater risk is that a comment (from Musk) in the press sends your stock price tumbling.”

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Revenue and Advertiser Trends

X’s revenue is projected to increase to $2.3 billion this year, up from $1.9 billion last year, but still below 2022’s $4.1 billion. Some major advertisers, including Hulu and Unilever, have returned to the platform, while others like American Express have significantly reduced their spending.

Four large ad agencies are negotiating annual spending targets with X, despite concerns about potential legal repercussions. X has filed a federal antitrust lawsuit against a coalition of brands and ad agencies, accusing them of coordinating an “illegal boycott.”

Mark Penn, CEO of Stagwell agency, believes X is “a revived and increasingly vibrant platform,” noting that “political boycotts and things are dissipating because companies are realizing that taking one side and the other is a dangerous place to be.”

However, some industry experts remain skeptical about the platform’s return on investment and its ability to attract major advertisers at previous levels.

Read more at Ars Technica