Elon Outlines the Future of X Ads, Including AI Targeting, Ads in Grok Answers and More

X (formerly Twitter) is getting ready for a massive holiday campaign, relying heavily on AI by targeting creative scoring, Ads in Grok Answers and beyond.

As part of the X Spaces session on Wednesday, Elon Musk and the team behind the platform’s advertising presented their plan of action. The plan includes more precise audience targeting aided with Grok AI, more streamlined advertising presentation guidelines, and even the possibility of integrating advertising directly with Grok’s chatbot’s responses.

AI Targeting as the Centerpiece

As explained by Musk:

“We’re geared toward making X the best platform for advertising in the world, and one of the key ways that we’re doing that is by applying the smartest AI in the world, the one that’s got the highest intelligence on every benchmark, which is the Grok AI. And what Grok AI allows us to do is to really understand how to match a product of service with the consumer, with some who would find that interesting.”

This overview demonstrates that the main selling point of X is the company’s highly developed Grok AI system that now delivers much more precise ads through a thorough and systematic understanding of each user’s interests.

As per Musk, Grok has replaced Twitter’s “somewhat random” ad targeting with a system that actually knows the interests of users. According to Musk, this has already resulted in more relevant ads as well as greater brand security, which has been an issue as well as source of contention following his takeover in 2022.

Grok has also increased the safety of brands, a problem that has been a major concern on X. The ad team of X is noting the improved performance statistics from its placements powered by Grok.

Brand safety became a top security concern for advertisers, because of which they moved away from X following Elon Musk acquisition of X. As his change in guidelines for moderation of content resulted in more lenient ad placement requirements, consequently the ads being placed alongside the content became controversial. The issue grew more serious when Musk was able to openly tell dissenting advertisers to “go f*** themselves” if they didn’t like it. This was a bold position that eventually prompted the majority of the advertising partners on X to reconsider their investment in their X platform.

Some advertisers have returned since then and the outcome of the 2024 elections, prompting some to re-think their X strategy. Yet however, the revenue generated by ads on the platform is still well down than it had been under Twitter. However, a slight improvement is expected this year.

Improved AI targeting and advertising placement can provide the needed boost to the X’s advertising. It’s not the only “improvement” Musk and the company officials are advocating.

Ads Get a Makeover

Alongside the targeting enhancements, X is tightening creative standards. Hashtags are not allowed in ads, the use of emojis is limited, and a brand’s newly introduced “aesthetic score” will evaluate ads’ visuals. Ads with better design will be less expensive to run.

“Basically, ugly and strident ads are not okay. We’re not saying that an ad has to be a complete work of art, but it can’t be an eyesore. We believe in making the beauty of the overall system better.”

X says that Grok will now evaluate all creative ads, assessing not just relevance but even the aesthetic appeal of your advertisements.

“Additionally, we’ll be rewarding ads that have high-quality, engaging landing pages. So the longer an average user is spending on your website or your app after clicking on an ad, the more preference you’ll get in the auction.”

Although the overall strategy appears to be logical, the ‘aesthetic score’ element raises doubts. X has not yet demonstrated how aesthetic appeal as measured by Grok, is actually related to an improved performance of ads in relation to user reaction. While engagement metrics do reflect user behaviour, the aesthetic score is more a reflection of the tastes of Elon Musk rather than actual data on response.

Only time will determine whether this method of judging will actually improve the effectiveness of ads in the marketplace or not.

Full Automation Ahead

X has launched updated Dynamic Product Ads. They use AI to present relevant products to users. 

Musk announced plans to integrate ads into Grok’s chatbot’s responses providing users with relevant advertisements in response to their questions.

If we look further ahead, Musk envisions Grok managing all aspects of the advertising process. Advertisers will upload their campaign materials while Grok’s AI autonomically manages placement, targeting, and optimization

“Grok is good enough that you should be able to upload an ad and do nothing else. Grok will figure out everything from there. You don’t need to do anything at all.”

This idea bears a striking resemblance to how Mark’s Zuckerberg’s has been touting Meta’s increasingly AI-driven ads process.

Part of the ‘Everything App’ Vision

These changes to the ads align with Musk’s larger vision of X to be the “everything app,” including the coming “X Finance” feature that allows one-click purchase. The idea is to keep users informed, engaged, and making transactions without having to leave the platform.

The assessment of X’s potential for advertising remains an arduous task. Although external indicators suggest declines in users and their importance, the platform insists that its user base is expanding. 

However, the numbers of its users are not as important to companies than whether their particular customers are still engaged. If the demographic you want to target is still engaged on X platform, its new Grok-powered targeting can finally yield meaningful results if the AI can live up to its promise.

Musk also emphasizes its role as the most important platform for global decision-makers, asserting that it is where CEOs, world leaders and “influencers in real life” turn for instantaneous information and discussion.

“They don’t go to TikTok, TikTok’s a fine platform, Instagram’s fine, but people of substance go to X.”

What Musk says, clearly indicates that X “has buying power in the trillions.”

He mentioned Marc Benioff, Michael Dell, and Larry Ellison as examples of people who are not so involved on various platforms. If brands are targeting decision-makers with high value, this could be a compelling reason to use them.

Key Takeaways

There is a clear debate going on about the number of audiences in which X claims that it is growing but third-party reports suggest a decline. However, for advertisers, the most important thing is that their target audience should be present and active.

If your company’s customers are on X platforms, these AI-driven solutions could help you target your audience and increase efficiency. But do not expect to see the aesthetic scores take over the actual performance metrics in the near future.