Advertising boycott at the platform formerly known as Twitter grows by the day

STEVE INSKEEP, HOST:

Many advertisers on social media find the behavior of Elon Musk is not worth the trouble of advertising on his platform X. Musk says that the lack of advertising may sink his company. He also said something else. Here's NPR's Bobby Allyn.

BOBBY ALLYN, BYLINE: Even longtime observers of the unpredictable Elon Musk were taken aback at his comments recently on stage at The New York Times DealBook Summit with journalist Andrew Ross Sorkin.

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ELON MUSK: Don't advertise.

ANDREW ROSS SORKIN: You don't want them to advertise?

MUSK: No.

SORKIN: What do you mean?

MUSK: If somebody's going to try to blackmail me with advertising, blackmail with money, go [expletive] yourself.

TOM HESPOS: When Elon Musk tells advertisers to F themselves, kind of makes it difficult for people like me to tell their clients that he has their interests at heart.

ALLYN: That's Tom Hespos. He runs Abydos, an advertising consulting business. Hespos says he had meetings with companies that used to advertise on X after Musk's comments who were wondering what to do, and he said, well, maybe it's time to leave.

HESPOS: That was kind of like the final nail in the coffin. Like, if he's telling you what he wants you to do, believe him.

ALLYN: It was the final nail in the coffin for many advertisers. That's because since Musk bought the platform last year, he got rid of more than two-thirds of the staff, including those who police the platform for hate speech and harassment. He reinstated previously banned users, and now anyone can buy the verified blue check. That has supercharged the spread of false posts. And Musk himself has courted controversy recently by endorsing an antisemitic post.

HESPOS: Advertisers don't want to answer questions about, you know, why you want a platform that seems like it's a safe space for antisemitism, for hate speech.

ALLYN: The Musk post? He apologized for it, but not before the damage was done, says Lou Paskalis, a former advertising executive who now helps blue-chip companies with marketing plans.

LOU PASKALIS: If your CEO is on a different sheet of music than the rest of the company, it really requires a lot of suspension of disbelief that those views aren't imbued in the company.

ALLYN: When Musk has generated controversy in recent weeks, Paskalis says he's fielded questions like these from top executives worried about what placing ads on X would mean.

PASKALIS: Could we precipitate a boycott of our products? If our products get boycotted, will the board call my CEO to task?

ALLYN: Lots of large companies, like Walmart, Apple, Disney and IBM, have stopped advertising on X. It's hard to know how much ad money has disappeared. That's because Musk took the company private, and its financials are no longer publicly available. What we do know is that 90% of the company's annual revenue comes from advertising. On the DealBook stage, Musk said the advertiser revolt could be lethal for the company.

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MUSK: Actually, what this advertising boycott is going to do - it's going to kill the company.

SORKIN: And do you think that the...

MUSK: But - and the whole world will know that those advertisers killed the company.

ALLYN: But what does he mean by kill? Bankruptcy? Will it go totally under? Will he sell it? Is he exaggerating? As is always the case with Musk, it's hard to answer some of the basic questions. Paskalis says there is no doubt that with reusable rockets and electric vehicles, Musk has been a business genius. But running a social media site is not something that can be solved mathematically.

PASKALIS: And I think that does not comport with his superpower. So I'm hoping that causes him to ultimately want to sell the platform to someone who would be a more capable steward.

ALLYN: Of course, as the richest person in the world, Musk can bail out X for a very long time if he wants to, but at what point might he just want to cut his losses? Some Musk observers say probably never. He's too determined to prove something to his haters.

Bobby Allyn, NPR News. Transcript provided by NPR, Copyright NPR.