In another desperate attempt to draw in revenue, social media company Twitter — now going by X — is demanding brands spend a minimum of $1,000 per month on ads to retain their gold checkmark on the platform.
Elon Musk claims the fee is to prevent fake accounts from spamming the network, but with the company's advertising profits dropping 50% since the billionaire took the helm, the fee is could be seen as a last-ditched attempt to ramp up ad spending on the platform.
X is also slashing the price of its advertising slots, but with the company losing users at historic rates, it's unclear whether this carrot-and-stick strategy will be enough to secure its future.
X is Charging Advertisers to Keep their Gold Check
As X (formerly Twitter) contends with its biggest advertising slump on record, the social media platform is going to require brands to spend at least $1,000 on ads per month — or $6,000 per 180 days— to keep their gold checkmark verification.
The new policy will be enacted from August 7, according to a recent email obtained by The Wall Street Journal, and is assumed to be imposed on top of the $1,000 per month the company is already charging for its gold check.
Or they can just pay $1000/month for a verified organization subscription with the ability to convey that organizational authority to affiliates. This more than pays for itself in organic reach.
— Elon Musk (@elonmusk) July 26, 2023
The reason for the $1000/month is to set a moderately high bar to be a verified org,…
According to a Tweet Musk recently fired off, he claims the new fee is part of an effort to “make it expensive for scammers to create millions of accounts” – a reference to the longstanding issue the exec has had with bots on the site.
But charging for the privilege of the gold tick isn't the only radical action X has taken this week.
X Also Slashes the Price of Advertising Slots
In addition to imposing new ad spending minimums, the social media company is also offering a number of discounts for its advertising clients, according to The Wall Street Journal. For example, X is reducing the price of video ads that run alongside trending topics on the platform's “Explore” page by 50% until July 31.
According to one email obtained by The Wall Street Journal, these markdowns aim to help advertisers “gain reach during crucial moments on Twitter such as the Women's World Cup”. But are these scrambled attempts to boost ad spending enough to recover X's recent losses?
Are X's Advertising Problems Redeemable?
X's advertising woes are no secret. Just last month the social media company reported that it had lost almost 50% of its ad revenue, as concerns around content moderation continue to drive away once-loyal brands.
Musk also revealed the company is still experiencing negative cash flow, due to the heavy debt load X has been burdened with since his $44 billion acquisition last October.
This new fee will undoubtedly draw more well-needed revenue into the platform, potentially helping the company to pay off some of its ~$13 billion debts. However, experts believe this $1,000 charge could have an adverse effect, by deterring smaller advertisers who don't have the budget to keep up with these payments.
But clawing back ad revenue isn't X's only concern. Just a day after Twitter's somewhat awkward rebrand to ‘X', Musk landed himself in hot water again for taking over the @X handle without paying its former owner. Not a good look for a man that's already facing a barrage of lawsuits from publishers, landlords, and his own employees.
