X, the company formerly known as Twitter, has a new initiative aimed at luring smaller businesses to advertise on its platform. The company announced on Wednesday it would offer a one-time ad credit of $250 to select businesses when they spend $1,000 or more on new ad campaigns over the next 30 days.
In its post, X touted that more than eight in 10 active X customers were small to medium-sized businesses (SMBs) -- the segment of the market where X is directing its new promotion. In a related FAQ, X says the ad credits will expire on December 31 of the year they were issued and may be subject to a minimum spend.
More than eight in 10 active X customers are SMBs—and today we’re enabling more of them to experience the power of X Ads.
We’re offering a one-time ad credit of $250 USD when select businesses spend $1,000 USD or more on a new campaign within the next 30 days.
For more details…
— Business (@XBusiness) August 23, 2023
The announcement follows an interview that X CEO Linda Yaccarino recently did with CNBC where she broadly discussed X's future plans. She told the outlet that X was integrating AI-powered ad tech that lets brands choose how careful they want to be about the kinds of content their ads are placed alongside. The ad slots that are less conservative would be sold at a discount.
Yaccarino also highlighted advertisers that were returning to X, including Coca-Cola and State Farm, after Elon Musk's chaotic takeover of the company had led many major advertisers to depart or at least re-evaluate their ad spend.
Despite Yaccarino's assurances, the reality of the situation is that Twitter/X advertising revenue has been on the decline. According to a June piece by The New York Times, Twitter/X's U.S. advertising revenue for the five weeks from April 1 to the first week of May was $88 million -- a drop of 59% year-over-year, the report said, citing internal documents the outlet had obtained. In addition, Twitter/X had fallen short of U.S. weekly sales projections by as much as 30% on a regular basis, it noted.
Even X owner Musk has talked about the ad revenue decline, posting just last month that X was still seeing negative cash flow due to a roughly 50% drop in ad revenue and heavy debt.
Surprisingly, Yaccarino claimed only a month later that X was "pretty close to breaking even," crediting X's API, data licensing and subscription businesses as aiding with that, alongside advertising as helping reach that goal.
While ad credits are a common business practice, it's clear that in X's case, it's more in need of a promotion to give brands a little push.