Last month, billionaire Elon Musk publicly endorsed an antisemitic conspiracy theory popular among white supremacists, prompting more than 200 companies to halt their ads on X. Many of them said they don’t plan to return to the platform, to which Musk seemed intransigent. At the New York Times’s Dealbook Summit on November 29, Musk, using an expletive, told advertisers not to spend on the platform. Then, on December 10, Musk restored the X account of conspiracy theorist Alex Jones, adding to X’s kitty of controversies.
While these are among the freshest instances that have given advertisers pause, marketing specialists told BioSpace that a growing number of companies, including those in the biopharma and biotech sector, had been feeling trepidatious about using the platform ever since Musk took over what was then called Twitter in October 2022. In fact, in July of this year, Musk revealed that the company had lost almost half of its advertising revenue since his acquisition of the company.
After the Takeover
Under Musk’s leadership, X quickly instituted a series of rash policy changes, said Bill Gadless, founding partner of emagineHealth, a Florida-based marketing agency for healthcare and biopharma companies. For instance, Musk’s decisions to charge $8 per month for a verification badge and to reinstate banned accounts such as that of Donald Trump made many of Gadless’s clients uneasy. That uneasiness turned into full-blown panic when a fake Eli Lilly account with a paid-for verification badge posted on X: “We are excited to announce insulin is free now.” The incident caused Lily’s share prices to plummet by 4.45%, prompting the company to halt all its ads on X. “At that point, we definitely saw nervous clients pulling back on ads and content on X, but again, not many wanted to leave the platform completely,” Gadless said.
Musk’s rebranding of Twitter in July of this year, when he changed its name to X and called it the new “everything” application, resulted in many companies flying away from the platform, said Shalon Kerr, founder of the London-based biotech and healthcare public relations and communications firm PR-it. “The sense is that Musk wants to turn X into a consumer application like China’s WeChat, which may not be the best place for life sciences businesses,” she said.
Kerr also noted that the lack of robust moderation of fake news and other problematic content on X has been a matter of great concern among her biopharma clients, as the industry has seen a decline in public trust since the COVID-19 pandemic. “I have been advising my biotech and biopharma clients, who already have a complicated relationship with stakeholder audiences, to keep away from X," she said.
With X's lax moderation came an uptick in neo-Nazi posts, an issue that surfaced long before Musk’s support of antisemitic content last month. In August, nonprofit news watchdog Media Matters for America documented in a report that ads for several brands were placed on an account that had shared content celebrating Hitler and the Nazi Party. The news led two companies, including biotech giant Gilead Sciences, to pause their ad spending while X investigated the issue, CNN reported. (X has since sued Media Matters, alleging the organization defamed it in a later report about ad placement next to hate groups’ posts.)
Kerr said she has been increasingly advising her clients to halt all engagement with the platform out of consideration for their brand reputation. “The last thing biopharma brands need is to be aligned with a platform that posts antisemitic content.”
Sheldon Zhai, founder of Supreme, a life sciences digital marketing firm, said that all his digital health clients have completely abandoned X. “They don’t want the headaches or being associated with a PR nightmare next to their ads.”
Falling Return on Investment
While marketing experts couldn’t put a number to the relative return on ad investment on X before and during the Musk era, sources said it is clear that biotech and pharma companies are finding that they don’t get their money’s worth on the platform. Kerr observed that even though big pharma companies have massive followings on X, there is very little engagement on the platform. “So if they have no engagement organically and no community, then who are they even advertising to?” she said.
At least three pharma companies, Novo Nordisk, Gilead and Merck, have said that they have stopped all paid ads on X, Endpoints News reported last month. According to data from market analytics company Sensor Tower, Pfizer, Eli Lilly and AbbVie have reduced their ad spending on X. For instance, Pfizer’s ad spending dropped 51% year-over-year through the end of October, the article noted.
Zhai said another issue his staff has experienced is consistent technical problems with X. “Ads go through an approval window that takes anything from 48 hours to several days. We don’t see such delays on LinkedIn or Facebook." Moreover, he added, there is almost no technical support for advertisers, and it’s impossible to get ahold of X representatives.
As a result of these issues, biopharma companies are increasingly turning to other platforms for their advertising needs, sources told BioSpace. Kerr said some of her biopharma clients are shifting to Meta’s Threads as an alternative to X, and some are also moving to Reddit. Gadless has been seeing a similar trend. “Companies are eager to move their advertising budgets to Facebook and LinkedIn . . . not so much on Instagram and Twitter,” he said.
He adds that at the end of the day, companies are driven by dollars and will place their ads wherever the users are. “But at the moment, advertisers are scrambling and looking for alternatives to X.”
https://www.biospace.com/article/in-musk-era-pharma-companies-move-ads-away-from-x/
