X signed up as an authorized seller of PubMatic ads, as it looks to outside companies to help boost ad revenue. PubMatic is a supply-side platform that helps website, apps, and streaming-TV providers manage, sell, and optimize their advertising inventory.
PubMatic's COE Rajeev Goel said on its recent earnings call:
“Historically, X had only accessed social-media ad budgets. They selected PubMatic as an SSP partner, opening up their traditionally closed ecosystem to tap into the $26 billion in open internet native display and video ad spend.”
PubMatic joins Google and InMobi, which each previously made deals with the company to sell ads on its platform. However, Business Insider sources say that although InMobi is listed as a seller of X ads on its Ads.txt file, the company hasn't offered ads on X for more than a year.
Before Elon Musk's takeover of Twitter, the social media company did not open up its ad inventory to outside vendors, and instead exclusively brokered deals with advertisers directly.
Is it a bad idea for X to outsource its advertising?
Pros: It's easier, doesn't require a huge in-house advertising division, and opens up the platform to more advertising partners.
Cons: It gives X less control over which ads appear on its platform, which may not be that big of a deal, as X doesn't seem to be too particular in that regard, and X has to give the supply-side platforms a cut of the revenue.
To be frank — X might not have much choice at this point. Brands aren't necessarily lining up to advertise on the platform. That'll happen when you sue your advertisers! Which by the way, X just added Twitch to its lawsuit, which is claiming that dozens of companies conspired with an advertising industry group to boycott the social media platform, causing it to lose revenue.
WARC recently reported that X’s ad revenue dropped by 46.4% between 2022 and 2023 — from $4.5B to $2.2B — and that the decline is forecast to continue with revenue in 2024 predicted to come in at $2B and below that in 2025.