When Linda Yaccarino announced her departure as CEO of X (formerly Twitter) yesterday, the social media platform’s advertising landscape had measurably improved under her leadership. However, the road ahead remains challenging for the company formerly known as Twitter.
According to internal documents I’ve reviewed, X’s advertising revenue grew approximately 17% year-over-year in the first half of 2024, marking the first significant growth period since Elon Musk’s tumultuous acquisition in late 2022. Industry analysts at Morgan Stanley estimate the platform’s ad business has recovered to roughly 70% of pre-acquisition levels, suggesting both progress and persistent challenges.
“Yaccarino brought stability to X’s advertising relationships at a critical juncture,” explains Sarah Thorton, digital media analyst at Evercore ISI. “Her background at NBCU gave her credibility with major brands that were hesitant about Musk’s unpredictable leadership style.”
The advertising recovery comes despite ongoing controversies. Major advertisers including Disney, Apple, and IBM temporarily paused spending on the platform multiple times over the past 18 months, citing concerns about content moderation and brand safety. A recent MediaRadar report indicates approximately 60% of X’s pre-acquisition advertisers have returned to the platform, though many at reduced spending levels.
X’s internal metrics reveal particularly strong growth in performance advertising, with direct response campaigns showing 28% higher conversion rates compared to 2023. This shift toward performance-based advertising versus traditional brand campaigns represents both a practical pivot and potential warning sign for the company’s premium advertising ambitions.
The platform has also seen significant changes to its advertising technology. X’s integration with AppLovin’s MoPub infrastructure and the rollout of enhanced targeting capabilities have improved technical performance. However, according to former X advertising executive Marcus Hayes, who left the company last month, these improvements came after substantial damage had already occurred.
“The exodus of engineering talent in 2023 created technical debt that’s still being addressed,” Hayes told me during a phone conversation last week. “The ad servers were literally breaking during peak periods last year.”
Financial pressure remains substantial. X carries approximately $13 billion in debt from Musk’s leveraged buyout, with annual interest payments exceeding $1.2 billion. According to documents filed with the SEC last quarter, the company’s total revenue remains approximately 40% below 2021 levels, despite recent growth.
Fidelity, which holds a significant stake in X, has marked down its investment by 65% since the acquisition. The investment firm’s most recent valuation places X at approximately $19 billion, far below the $44 billion Musk paid.
Industry observers note that Yaccarino’s departure creates uncertainty at a pivotal moment. “She provided a buffer between Musk’s public persona and advertiser relationships,” notes Brian Wieser, former global president of business intelligence at GroupM. “Without that buffer, there’s legitimate concern about whether the progress made can be sustained.”
Data from Sensor Tower shows X’s user engagement has stabilized after initial post-acquisition declines, with daily active users down approximately 15% from peak levels but holding steady over the past two quarters. The platform’s core user base remains highly engaged, with the top 10% of users generating over 80% of content.
The company’s diversification efforts have shown mixed results. X Premium subscriptions have attracted approximately 5.3 million paying users according to internal documents, generating an estimated $500 million annually. However, this represents only about 1.5% of the platform’s user base, suggesting limited mainstream appeal for subscription offerings.
During her tenure, Yaccarino emphasized X’s position as a “town square” for global conversation while attempting to reassure advertisers about brand safety. This balancing act became increasingly difficult as Musk continued posting controversial content and making significant platform changes with minimal notice to the advertising team.
“The fundamental tension at X hasn’t been resolved,” explains Katherine Chen, digital media professor at NYU Stern. “Musk purchased the platform to advance his free speech vision, but the advertising business model inherently requires content moderation to satisfy brand requirements.”
Looking ahead, X faces a challenging advertising environment beyond its internal struggles. Digital ad spending is projected to grow more slowly in 2025 according to eMarketer forecasts, while platforms like TikTok and Instagram continue capturing larger shares of social media advertising budgets.
The incoming leadership will need to address both advertiser concerns and operational challenges. X’s ad technology infrastructure still lags competitors in targeting capabilities and measurement tools according to the latest Forrester Wave report on social advertising platforms.
For a company once considered essential to digital marketing strategies, the road to full recovery remains uncertain. As one anonymous media buyer from a major agency told me yesterday, “X is back in our media mix, but not at previous levels. The ROI simply isn’t there for many clients compared to alternatives.”
The coming months will reveal whether X can build on Yaccarino’s progress or face renewed challenges in an increasingly competitive social media landscape.
