X Little Chance of Regaining Advertisers Before End of Year

Elon Musk has appointed Linda Yaccarino as the CEO of X, previously known as Twitter, in the hopes that the former NBC Universal executive would persuade advertisers who had ceased spending on the platform to come back. However, numerous prominent brands are still refraining from participating and have already made arrangements to allocate their budgets elsewhere during the holiday season, which has traditionally been the most profitable time for advertising revenue.

The social media has sought to win back advertisers who fled after Musk’s chaotic takeover and controversial policy changes, taking more than half of the company’s annual revenue with it. But Yaccarino’s time isn’t up for a turnaround this year, according to several advertisers responsible for significant brand spending.

Marketers typically lock in their vacation budgets by August, said Natasha Blumenkron, director of paid social services at marketing firm Tinuit. The last three months of the year have historically been X’s biggest revenue generator. “It would take a big change and a big reason to believe that we would recommend that our advertisers move their budgets back there,” he said. None of Tinuit’s advertisers are going to buy ads on X during the holidays, instead increasing their spending on Facebook, Instagram, TikTok and even Snapchat.

Twitter “was part of every plan,” said Jason Harris, CEO of advertising agency Mekanism, which works with Alaska Airlines, Charles Schwab and Dropbox, among others. “Now the brands, our customers, are moving from that to more stable platforms like TikTok or Reels or even YouTube Shorts,” he said.

A representative of one major ad agency, who declined to be named to discuss internal metrics, estimates that their X spend is down more than 60% from a year ago.

X did not respond to a request for comment.

The company has offered deals and incentives to try to lure back advertisers, but the enticements don’t address some marketers’ biggest concern about the platform: its reputation for allowing harmful, offensive or racist messages since Musk took over. . Several advertising agency representatives said they still have clients who have not returned to X because they are concerned about such content appearing near their ad campaigns.

“I believe that few — if any — advertisers are actively considering investing more in advertising on Twitter,” said Lou Paskalis, director of strategy at Ad Fontes Media. “Even if they were, it would be much lower than what they were using before.”

X also announced a series of moves in recent weeks that have irked advertisers, including the removal of popular ads and the removal of a feature that allows users to block others. Nearly a year into Musk’s tenure, advertisers are no longer surprised by his ability to make quick changes and are used to debating how to respond, said Steve Susi, director of brand communications at Siegel & Gale. “The idea of turning budgets away from Twitter is already familiar in advertisers’ media rooms,” he said.

Shortly after Musk took over, some ad agencies including WPP, IPG and Omnicom advised clients to suspend or consider suspending their ads on the site. Then, when Yaccarino was named CEO at X in May, several advertisers said they were reconsidering spending on the platform. They hoped Yaccarino would help bring a sense of stability to X, clean up the site’s content, mend relations with agencies and act as the de facto adult in the room.

X has added tools to give brands more control over where their ads appear, while repairing a few relationships since Yaccarino joined, the agencies say. But months after his appointment, some agencies say optimism has waned.

“I think everybody was pretty excited when he was hired. I think there was some kind of glimmer of hope,” Harris said. “I don’t know if the optimism has worn off, but I think it’s definitely seeped in pretty badly. And it’s really bad for his brand, because it really looks like he has no power,” he said. Yaccarino’s upbeat posts on the site — as opposed to Musk’s outbursts or attacks on his critics — have sometimes fueled that perception.

Some executives who oversaw paid social media for ad agencies said they hadn’t yet heard of Yaccarino. They also felt his absence at this year’s Cannes Lions festival, a major industry event. Yaccarino’s contract with NBCUniversal initially prevented him from entering into any agreements that conflicted with his former employer, the New York Times reported. The Financial Times reports that Yaccarino has been in direct talks with some brands and companies since his move, including talent agencies CAA and UTA and Walt Disney Co. Yaccarino also holds informal conversations with advertising agency executives he knows personally.

On Thursday, Yaccarino announced that X is adding new members to its sales and agent teams, employees who will work directly with advertisers. When Musk lost or laid off 75% of X’s staff, employees with strong relationships with advertisers were heavily impacted, leaving many agencies without points of contact.

But ad revenue hasn’t recovered and is still at 60%, Musk acknowledged earlier this month, without specifying a specific timeframe. “In general, working with X hasn’t changed much since he came on board,” said Stephen Brandow, vice president of paid social media at Mediahub. Mediahub has worked with clients like the NBA, Lyft and JetBlue and still has some advertisers. in X. But “we can imagine that he’s kind of coming into that role and it’s probably going to be a while.”

But others say it doesn’t matter. “X is no longer relevant or worthwhile,” said Marc Beckham, CEO of DMA United. DMA United has worked with clients such as Pepsi, Tom Ford and Warner Bros. .”