X’s new CEO hire has done little to stem brand exodus, report says

Dive Brief:

• The appointment of Linda Yaccarino as CEO of X, formerly known as Twitter, has not appeared to bring U.S. advertisers back into the fold in a meaningful capacity, according to an analysis that MediaRadar shared with Marketing Dive. 
• Of the 3,100 brands advertising on X in May, the month Yaccarino stepped into the role, 34% chose not to return in June, per the firm’s tracking. Several companies that represented some of the platform’s biggest spenders in the first half of 2022, including AT&T, Coca-Cola and General Motors, drastically cut their spending in H1 2023. 
• X’s owner and Chief Technology Officer Elon Musk last month claimed that ad revenue was down about 50% year-over-year. Yaccarino this week indicated the situation has improved, though the recently rebranded firm clearly still has a long road ahead toward stability. 

Dive Insight:

Musk’s pick of Yaccarino to lead X was viewed as a potentially savvy move back in May. In her prior role spearheading ad sales at NBCUniversal, Yaccarino developed a sterling reputation for relationship-building with brands and agencies. NBCUniversal was also a heavy Twitter spender under Yaccarino’s tenure, leveraging the platform to promote blockbuster events like the Olympics. The combination of established Twitter know-how and strong industry connections held promise.

While it’s still early days, MediaRadar’s analysis indicates that Yaccarino’s hire has done little to move the needle so far, with an advertiser exodus continuing to pick up speed in June. The picture for the first half, including the months before Yaccarino took the reins, was also grim.

A group of top advertisers tracked by MediaRadar dumped $233 million into the platform formerly known as Twitter during H1 2022 versus just $52 million in H1 2023, a 78% YoY decline. AT&T’s spending slid 96% YoY, while Coke was down 99% YoY and General Motors 89% YoY. Progressive insurance and Meta Platforms appeared to cut spending entirely over the period.

MediaRadar examined a sample of Twitter advertiser data from Jan. 1 through June 2023. The analysis factored in in-feed image, carousel and video ads from a panel consisting of over 2 million U.S. users.

Since Yaccarino signed on as chief executive, the social media platform has continued to undergo changes at the directive of Musk that have baffled or frustrated consumers and brands alike. Chief among those shifts is the rebrand to X, part of Musk’s plan to eventually develop an “everything app” akin to China’s WeChat that can handle not just social posting, but also banking, digital payments and other forms of media. 

Third-party analyses have suggests that dropping the Twitter name and common parlance like “tweeting” has hurt X’s brand valuation while making the platform even less appealing to advertisers that want to appear on a site with easy name recognition. There is also a high degree of skepticism that Musk’s super-app idea will take hold in the U.S., where services like digital payments and banking are already widely adopted. Meta earlier this summer also launched a direct X competitor called Threads that saw an initial surge of engagement and buzz before leveling off, though the app continues to add new features.

“X is making changes to its platform and leadership, but advertiser concerns continue to plague the company,” said Todd Krizelman, MediaRadar’s CEO, in a statement attached to the report. “Not enough has been done to influence larger spenders, in particular, who continue to re-evaluate their commitment.”

Per Musk’s own admission in July, X’s ad revenue has been down about 50%. In an interview this week with CNBC — her first since taking on the CEO mantle — Yaccarino said that X is “close to breakeven” and took credit for helping bring blue-chip companies like Coke back on board. Yaccarino also claimed that X is a healthier and safer platform than it was last year.

Research has indicated that hate speech on X has surged under Musk, who has frequently described himself as a free speech absolutist and the site as a “digital town square.” According to Yaccarino, X plans to bring back an advisory council consisting of large advertisers that Musk previously disbanded.