How Elon Musk redefines advertising: Inside X’s shift from brand safety battles to AI-driven performance ads

Billionaire businessman and X-owner Elon Musk has always had a complicated relationship with advertisers. The broader pattern shows a blunt, confrontational tone toward advertisers who withdraw or criticise his platforms. Musk has on several occasions told advertisers: “Go f--- yourself,” when they pulled spend in response to content-moderation concerns. Musk frames advertising not purely as a commercial revenue stream, but as a reflection of his views on free speech, platform identity and leverage.

Musk’s philosophy on advertising

Advertising as secondary to platform identity

From Musk’s remarks and actions, it is clear he views advertising through a broader lens than “ads = money.” For example, when speaking at the advertising-industry festival in Cannes once, Musk said his earlier profanity‐laced comment was not aimed at all advertisers; he insisted that the principle was a global free-speech platform, not being censored for money.

In his view: Platforms like X should not tailor their content (or their moderation) simply to satisfy advertisers’ demands for “safe” content.

If advertisers seek to dictate which content can or cannot appear — beyond their choice of where to place ads — then Musk objects. (He told advertisers they have the right to pick where to appear, but not to insist on every other piece of content being brand-safe, at least in his framework.)

Advertising is a means, but not the raison d’être of the platform: free user expression and influence matter more.

Thus, there is a tension between “maximising ad revenue” and “preserving the platform’s identity as a free-speech, independent space.” Musk clearly gives more weight to the latter (in his public statements) than many platform executives typically do.

Ads as part of commerce and performance, not just brand-messaging

In more recent months, Musk has laid out a somewhat more commercial and forward-looking vision for advertising on X: using AI, targeting and commerce capabilities. In August 2025 he stated that advertising on X would be “dramatically better” by leveraging the in-house AI (named “Grok”) to match ads to people most likely to buy.

Key points in this vision:

He sees X as having “the wealthiest and most influential audience in the world” (his claim) — hence a fertile ad base.

The goal moves from simply “reach impressions” to “scroll → sale” (i.e., ads that lead to conversion, not just awareness).

The platform is encouraging more engagement between ad placement and actual commerce (product catalogs, conversion tracking, direct purchase).

Hence advertisers are being told that X is evolving beyond a classic social-media ad model into something more direct-response oriented.

In short: Musk wants advertising on X not just to exist — but to work better, with better targeting, data and conversion. Yet this is layered on top of his free-speech-first stance.

Advertising and X: The commercial landscape

A precipitous drop, then tentative recovery

Under Musk’s takeover (he acquired Twitter in late 2022), X’s advertising business faced sharp disruption. For example, ad revenue reportedly dropped from ~$4.4 billion in 2021 to around ~$2.0 billion in 2023.

Forecasts for 2025 suggest growth (≈ +16 %) to about $2.26 billion globally — the first year of growth since Musk’s acquisition — though still far below its peak.

Brand-safety concerns and advertiser trust

A key headwind has been brand-safety and trust: A 2024 survey by Kantar found only ~4% of marketers believed X provided brand safety — compared to ~39% for Google.

Many big advertisers pulled or paused spend because they worried about their ads appearing next to extreme content, or unpredictable moderation of the platform.

Musk’s reaction to the pull-back has been aggressive: for example, X filed a lawsuit alleging that a global advertising coalition conspired to boycott the platform.

Some commentators see Musk’s posture as “we’ll either thrive with advertisers who accept our model, or we’ll survive without them” rather than a full attempt to placate the ad ecosystem. Others say this tension remains unresolved.

The strategic pivot: long tail & smaller advertisers

Given the reluctance of major advertisers, X has also shifted focus to the “long tail” of advertisers: smaller brands, direct-response ads, performance marketing. As per reports, Musk has emphasised that improved targeting and commerce features will unlock these smaller ad budgets.

The logic: while big brand advertisers might stay cautious, smaller advertisers might be more flexible and drawn by conversion-oriented value propositions.

Advertising across Musk’s companies

While much of the focus is on X, Musk’s broader ecosystem (including Tesla, SpaceX, etc) also reflect how he thinks about advertising (or the lack thereof).

Tesla historically spends very little on traditional advertising compared to competitors; Musk often leverages social media, owned channels and his personal brand to generate attention.

This suggests a preference for earned media, social amplification and direct reach rather than mass-advertising budgets.

When applied to X, one sees a similar logic: if Musk himself can reach millions of users directly, then the platform’s ad model can shift more toward high-intent, smaller-scale, direct-response deals rather than “spray and pray” brand buys.

Thus, the strategy across his companies: more direct control, more leveraging owned/earned media, less reliance on high-volume traditional ad-spend.

Key tensions and questions

Free speech vs brand safety Musk’s strong stance on “free speech” — meaning fewer restrictions on content — clashes with advertisers’ demands that their brand not appear next to extreme or objectionable content. Whether those two can be reconciled at scale remains uncertain.

Revenue potential vs advertiser confidence The goal of converting X into a high-value ad platform is clear. But getting advertisers back (especially large brands) requires building trust, and that has been shaky. The strategic pivot to smaller advertisers may help, but may not replace lost large-brand spend quickly.

User experience vs ad-load growth Musk has called for ads on X to become so good that users will “look forward to them”. That is an ambitious claim, but raises questions: if feed becomes filled with ad-placements (even if high-quality), does user experience suffer? The balance between monetisation and audience retention will be crucial.

Measurement & conversion vs branding Musk’s emphasis on “scroll to sale” means X must have strong measurement tools, e-commerce integration, and targeting. That’s a competitive arena (other platforms have mature ecosystems). Will X catch up and differentiate meaningfully?

Platform identity & advertiser segmentation X under Musk is not simply a neutral social feed — it is positioned as a platform for “the world’s most influential people”, with a particular tone and user base. That may appeal to some advertisers (e.g., niche, high-value audience) but repel others (mass-market brands worried about unpredictability or controversy).

The Bottom-line

Elon Musk views advertising as important, but not at the cost of compromising the platform’s identity (especially free speech). He is shifting the ad-model toward performance, conversion and smaller advertisers rather than traditional large-brand buys alone.

He recognises that for X to succeed commercially, ad revenue must return — but he is simultaneously signalling that X will not simply behave like other social-ad platforms if doing so means compromising his principles or control.

The success of this vision hinges on advertisers’ willingness to buy into a less conventional ad-environment (with more risk but potentially higher reward) and on X’s ability to deliver improved targeting, measurement and brand safety.

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