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SMBs Still Cautious Advertising on X Despite Lower CPMs

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X has been ramping up efforts to court small and midsized businesses in order to offset some of the ad revenue declines it has faced as brands have quit the platform.

While costs per click are relatively low, inconsistent conversion and brand safety concerns are making SMBs wary of spending on X, five sources told Adweek.

“The wider quality of the ads served across X has dropped, lowering trust in X ads, which, in turn, means SMBs are having to work harder to counter this in order to drive quality results,” said Jack Moore, head of social at social media agency Hatch Group.

Moore added that 10% of its SMB brands across business-to-business, lifestyle and sports are buying media on X.

“We are seeing better results in terms of CPM (cost per thousand impressions), CPE (cost per engagement) and CPC,” Moore said. “However, the quality conversions [are] inconsistent. [This is] in comparison to Meta, TikTok and LinkedIn.”

In the past six months, the average CPM on X was down by 60% to $0.38, while CPC saw a 50% decrease to $0.10, said Moore.

Driving conversion hasn’t been X’s strongest suit, and it has historically lagged behind platforms like Meta, Google and TikTok. After larger brands including Disney, Apple, and Comcast left X following its tumultuous takeover by Elon Musk, lower demand meant that its ad inventory became widely available at a lower cost. Yet, a lack of brand safety measures means that SMBs with limited ad dollars are instead choosing platforms that can drive repeatable results, like Meta, YouTube, and TikTok, alongside smaller platforms such as Reddit and Pinterest.

“The audience quality may be impacted since Musk’s takeover,” said Bryan Armit, senior social media manager at Tigerbond. “Another concern [for brands] always is what content ads are going to be shown next to. It always comes back to brand safety issues.”

Lower CPMs and easier ways to buy

X outsourced its ad sales to target SMBs to marketing startup JumpCrew, Financial Times reported last December, and it began focusing on subscription and data licensing services.

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