X Shuts Down $100M Promoted Accounts Ad Business

X, the company formerly known as Twitter, will no longer allow advertisers to promote their accounts within the platform’s timeline to attract new followers, according to an email to advertising clients obtained by Axios. According to Axios, promoted accounts – or “Follower Objective” ads – generate more than $100 million annually in global revenue for X, a source familiar with the company’s business told Axios.

Promoted accounts are one of the oldest ad formats offered on the platform. The ads appear as text-based posts within the X timeline and include a “Follow” button for the account prompting them.

But follower ads, while easy to sell, are static. They don’t leverage any of the multi-media tools, like video, that X is trying to lean into.

Axios also reported that in a note to clients on August 10, an X representative said the company planned to start “depreciating the Followers objective” ad unit beginning as soon as last Friday.

The representative wrote that the change “comes as part of a larger effort to optimize the X experience by prioritizing content formats.”

They further noted that given client’s strategies are reliant on the followers objective ad unit, X – in the weeks ahead – “will work to identify alternative routes to meet these goals.”

According to Axios, the source familiar with X’s business said the change was driven by X’s product group, not the revenue side of the company. The company’s client team was given little time to communicate the change to clients ahead of time, the source said.

Follower objective ads represent a small portion of X’s overall ad revenue, but the company is cutting them at a time where reports suggest it’s list a significant among of ad revenue. X is still not profitable, and has reportedly failed to pay vendors and bills as its revenue challenges persist.

Forbes reported that X, formerly known as Twitter, has told clients it will stop offering advertisements that encourage users to follow accounts directly from their own timeline, as the company plans to redirect advertisers toward other promotions – amid reports the company’s ad revenue has dropped significantly since Elon Musk’s takeover last year.

According to Forbes, “Follower Objective” ads allow a tweet to appear on the timeline of someone who does not follow an advertiser’s account, along with a clickable “follow” button – X says these ads are an “easy way” to quickly grow followers.

Forbes also reported that by the end of January, more than half of Twitter’s top advertisers – a list that includes Wells Fargo, Jeep, and Coca-Cola – had spent no money on the platform in the first few weeks of the year. Six ad agency executives told the New York Times their clients had been driven away from X by Musk’s changes to the platform and concerns about “misleading and toxic content.”

In my opinion, it sounds like Elon Musk doesn’t really care much for advertising (which is valid – many people avoid ads). That said, I don’t see how cracking down on “Follower Objective” ads will suddenly entice big companies to return to X. Some companies may have concerns about the content posted above and below their ads.