Brands hesitant about marketing on ‘X’, Musk’s rebranded Twitter

Brands are taking a “wait and see” approach to advertising on the social media platform X, formerly known as Twitter, until they can understand where the owner Elon Musk is taking the company, the chief executive of ad group WPP has said.

Mr Musk unveiled the name and logo last month, signifying his focus on building an “everything app” with services beyond social media, such as peer-to-peer payments.

The firm has endured months of chaos since Mr Musk’s takeover in October, including thousands of lay-offs, criticism over lax moderation, and an exodus of advertisers who did not want their ads appearing next to inappropriate content.

Ad revenue had fallen 50 per cent, Mr Musk said last month.

Mark Read, chief executive of WPP, the world’s largest ad group, said the rebranding “took people a little bit by surprise”.

“Clients cannot understand where the platform is heading and what its character will be in the future,” he said after WPP published its first-half results.

“Some clients are dipping their toe back in, but overall I’d describe it as ‘wait and see’.”

He warned that weaker spending by US tech groups was hitting WPP’s outlook this year. The cutting of marketing spending, widely seen as a measure of economic health, did not augur well, he added.

Mr Read said the cut in marketing had taken WPP by surprise.

“Spend will pick up after a period of time, but I think we are nervous for the rest of the year because we can’t get total clarity on when that’s going to happen,” he said.

The WPP warning followed that of its rival Interpublic in lowering its growth forecast for this year, to 1.5-3 per cent from 3-5 per cent.

WPP, which owns the Ogilvy, Grey and GroupM agencies, said in February that it believed clients would spend on marketing through any downturn to prop up sales and justify price rises.

Analysts said the reduced spending reflected caution among companies wrestling with higher borrowing costs and consumers tackling a cost of living crisis.