X’s ad business improved under departing CEO Linda Yaccarino, but it’s still tough times ahead

Linda Yaccarino's brief yet impactful tenure at X has come to an end, marked by significant changes in the platform's advertising strategy. According to new insights from ad intelligence firm Guideline, Yaccarino leaves X in a stronger position than when she started, despite the ongoing challenges facing the social network's ad revenue. During the first half of 2025, U.S. ad spending on X surged by 62% year-over-year, a sign of recovery from the depths it had reached. Yaccarino reported that as of May 2025, 96% of X’s advertisers had returned, indicating a slow but steady rebound. However, the path to revitalizing X’s advertising business was anything but smooth. The platform remains vulnerable as it struggles to diversify its revenue streams, particularly with its X Premium subscriptions contributing only a minor fraction of its overall income. Yaccarino stepped into a challenging environment in June 2023, following her years of service at NBCUniversal. The advertising climate for X had deteriorated significantly after Elon Musk's acquisition in October 2022, which led to mass cuts in ad spending. Advertisers were alarmed by escalating misinformation and hate speech on the platform, prompting 14 of the top 30 advertisers to cease their campaigns entirely. A staggering 89% of X’s U.S. ad revenue evaporated between Q3 2022 and Q3 2024, and reports suggest that by early 2023, over 500 advertisers had exited the platform. The fourth quarter also bore witness to a 35% drop in revenue, as internal documents revealed a 59% decline in U.S. ad business year-over-year. In an attempt to attract back advertisers, X implemented initiatives such as ad credits, and Yaccarino was said to be working diligently behind the scenes to mend relationships with brands. A year into her role, reports indicated that 65% of advertisers had returned, and Yaccarino asserted that X was nearing a break-even operational status. However, the situation took another downturn due to a boycott in late 2023, spurred by Musk's controversial endorsement of an antisemitic post. This prompted major brands like Apple and Disney to halt their ad spending, further threatening the recovery. Musk's confrontational approach towards departing advertisers, including a notorious remark to “go fuck yourself,” added to the tensions. Legal action followed, with X suing advertisers for what it termed an “illegal boycott.” This strategy proved somewhat effective; companies like Verizon returned to the platform after being threatened with litigation. Moreover, data from Guideline suggests a rebound in U.S. ad spending since December 2024, influenced by the upcoming presidential elections, with a notable 37.7% increase from Q3 to Q4 2024. Under Yaccarino's leadership, X also focused on enhancing brand safety by collaborating with adtech firms like DoubleVerify and Integral Ad Science, which aimed to prevent ads from appearing alongside inappropriate content. Despite these efforts, X’s reputation regarding ad safety remains contentious, as evidenced by recent controversies involving its AI bot, Grok. With Yaccarino's departure, made prior to the recent incidents, X faces new uncertainties. The social network has made strides under her guidance, but the future of its advertising business remains precarious as it navigates a landscape fraught with challenges.