Is Advertising on Elon Musk's X Truly 'Pathological'? Expert Weighs In
Yale professor criticizes brands for endorsing Elon Musk's X despite his controversial views, calling it 'irresponsible' Advertisers face a marketing dilemma as pressure mounts on their association with the billionaire
According to Yale professor Jeffrey Sonnenfeld, brands are being "irresponsible" by advertising on Elon Musk's X after the billionaire endorsed antisemitic views. Sonnenfeld, the dean for leadership studies at the Yale School of Management, mentioned in a phone interview with CNN that it is self-destructive and pathological for any advertiser to be associated with him.
Musk sparked further controversy recently when he expressed agreement with an antisemitic statement on X. The statement suggested that Jewish communities promote "hatred against Whites." Musk's response was, "You have spoken the truth."
Certain prominent brands, such as Disney, NBCUniversal, and Warner Bros. Discovery (owner of CNN), have suspended their advertising on X (formerly known as Twitter). While these advertisers did not explicitly state that their decision was a result of Musk's post, it was discovered that some of their advertisements were placed alongside antisemitic content on X, as reported by the progressive watchdog group Media Matters.
Sonnenfeld stated that public company advertising should not be allowed on Twitter due to the endorsement of replacement theory. This theory, which gained popularity among far-right White nationalist circles, suggests that Democrats and liberals are planning to bring in undocumented immigrants in order to diminish the political influence of White individuals.
In response to this, Joe Benarroch, the head of business operations at X, countered in an email to CNN, accusing Jeffrey Sonnenfeld of not supporting the principles of free speech.
Yaccarino under pressure
On Friday, a blog post by X alleged that Media Matters was engaging in an aggressive search for pro-Nazi material, which they claimed was distorting the actual user experience and potentially deceiving advertisers. Additionally, Musk has initiated a legal lawsuit against Media Matters, a battle that the organization believes it can emerge victorious from.
The advertiser backlash is putting additional financial strain on X, which is already facing difficulties. This is creating a major problem for X's CEO Linda Yaccarino, who joined the company recently to enhance its advertising operations.
"In my opinion, Linda Yaccarino should step down," Sonnenfeld stated during the interview. "Despite her talent, unless she can convince (Musk) to retract his statements, which is unlikely, she should relinquish her position."
Several advertisers are attempting to convince Yaccarino to take that course of action. Marketing industry expert Lou Paskalis informed CNN that there has been a significant surge of advertising executives pressuring Yaccarino to resign.
However, Yaccarino has signaled she doesnt plan to quit, posting on Monday morning: "I believe deeply in our vision, our team and our community."
A marketing dilemma
Nell Minow, vice chair of ValueEdge Advisors, a corporate governance advisory firm for institutional investors, believes that the free market will resolve the problems at X.
Minow stated, "This situation presents an ideal chance for the market to demonstrate its inherent strengths. If advertisers are unwilling to showcase their products in an unfavorable environment, they will choose to withdraw. It's analogous to deciding whether to advertise in Time Magazine or Hustler."
Minow highlighted that despite X ceasing to be a publicly traded company, there could still be repercussions for Musk. In the event that other investors and debt holders begin to harbor uncertainties regarding the company's financial future, they may hold Musk responsible, according to Minow.
Brands no longer have to fully align with a media outlet or its policies in order to advertise there, according to Tim Calkins, a marketing professor at Northwestern University's Kellogg School of Management.
However, Calkins acknowledged the growing difficulty in dissociating Elon Musk from his controversial statements and voiced concerns regarding the social media platform's content moderation.
"The last thing a brand wants is to spend money to unintentionally get pulled into a polarizing topic," Calkins said.
