Elon Musk Announces Shift in X’s Ad Pricing Strategy to Enhance User Experience
AI-summarised brief · reviewed before publication
Elon Musk has announced that X will transition to charging advertisers based on vertical screen size, marking a significant shift in the platform's revenue strategy. The company's move comes as it works to restore advertising income to pre-acquisition levels. Musk wrote on X that the platform "is moving to charging for ads based on vertical size, so an ad that takes up the whole screen would cost more than an ad that takes up 1/4 of the screen, otherwise the incentive is to create giant ads that impair the user experience." This pricing adjustment is part of X's broader transformation into an "everything app" under Musk's leadership. The platform recently secured money transmitter licenses across 40 states and Washington D.C., positioning itself to compete with financial services companies through its upcoming X Money service. X CEO Linda Yaccarino has been working alongside Musk to restore advertising revenues to 2022 levels following the platform's $44 billion acquisition. According to Emarketer data, X's revenue is expected to rise to $2.3 billion this year from $1.9 billion previously. Despite ongoing challenges with advertiser relations, the new ad pricing model addresses user experience concerns while potentially impacting revenue streams. Major brands recently resumed advertising on X following legal pressure from Musk's antitrust lawsuit against the Global Alliance for Responsible Media. In early 2025, there was a 2% decline in U.S. ad spending on X. However, major advertising agencies, including WPP and Omnicom, have agreed to set annual spending targets with the platform. The advertising changes reflect X's strategy to balance user experience with revenue generation as it expands beyond social media into comprehensive financial services.