- Elon Musk’s X has reportedly partnered with adtech firm Magnite Inc. (MGNI) to enhance its programmatic ad sales, aiming to recover from a revenue drop post-Musk’s 2022 acquisition.
- This partnership, alongside previous ones with Google and PubMatic, allows X to tap into broader advertiser demand through third-party ad inventory management, despite having to share revenue with these partners.
- Despite challenges, including a 28% decline in US advertising revenue to $1.4 billion in 2024 from $2 billion in 2023, X has seen a 15% increase in advertisers, navigating through content moderation changes and legal disputes.
According to Business Insider, Elon Musk’s X has embarked on a new strategy to bolster its advertising revenue by partnering with Magnite Inc. (MGNI), a leading supply-side platform (SSP) in the US. This move is part of a broader initiative to expand programmatic ad sales, allowing X to leverage Magnite’s technology, which assists in managing and selling ad spaces across various digital platforms. This partnership signifies a shift for X, which under Musk’s leadership, has been opening up to third-party adtech vendors after previously focusing solely on direct sales, a change motivated by the need to recover from a significant revenue drop following his acquisition of the company in 2022.
Since the acquisition, X has faced challenges with advertiser confidence due to changes in content moderation, staff layoffs, and Musk’s controversial public statements, including his infamous advice to advertisers to “go f… yourself.” The publication however notes that the partnership with Magnite, alongside previous collaborations with Google, PubMatic, and an earlier association with InMobi, aims to attract a broader range of advertisers by tapping into the extensive networks these SSPs offer. This strategy could help fill the revenue gaps left by traditional sales methods by offering ad inventory at potentially lower prices but with the caveat of revenue sharing with adtech partners.
Despite these efforts, X’s advertising revenue saw a 28% decline to $1.4 billion in 2024 from nearly $2 billion the previous year, according to MediaRadar. However, there has been a 15% increase in the number of companies choosing to advertise on X, hinting at a gradual recovery or at least stabilization. These partnerships come at a time when X is also entangled in legal battles, including a lawsuit against 11 advertisers for allegedly conspiring to boycott the platform. With Musk’s significant influence in both tech and politics, particularly in the wake of Donald Trump’s reelection, X continues to navigate its unique position in the social media landscape, striving to regain its footing in the ad market while managing the complexities of content and community governance.
Price Action: MGNI is having a solid day on the market, with its $2.69 billion market cap stock currently trading at $20.72, up 8.25% intraday. The stock has been on a tear lately, climbing 30% year-to-date and an impressive 118% year-over-year.
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