Leaders at Elon Musk’s social media company X told employees this week that 65 percent of advertisers had returned to the platform since January, according to meeting tapes obtained by The New York Times, and that smaller companies now make up the majority of its revenue.
Executives, including Linda Yaccarino, who was appointed to run the company a year ago, acknowledged that the company continued to face challenges as it rebuilt its beleaguered advertising business. They did not provide updated sales figures, according to three people in attendance Wednesday and Thursday, who noted that the return of advertisers does not necessarily reflect an increase in revenue.
The meetings came as Mr Musk, who is acquiring the company for $44 billion in 2022, faced a vote by Tesla shareholders on Thursday on his pay package, worth more than $45 billion. Some investors in Tesla, which represents the bulk of Mr. Musk’s wealth, expressed concern that he had been ousted by X. Later in the day, the company announced that shareholders had approved his compensation.
Since Mr Musk took over the social media company, the billionaire has cut 75% of staff, reinstated hundreds of banned accounts and rebuilt the platform to allow more speech, without consequence. In November, he told advertisers not to spend on X, dismissing them using an expletive during an interview at the Times’ DealBook conference.
But Ms Yaccarino painted a rosier picture this week as she spoke to employees, promoting increased advertising by small and medium-sized businesses on the platform. She and Mr. Musk are expected to continue talking about brands in meetings next week as the two executives head to the Cannes Lions festival, an ad industry summit.
“There will be hundreds of customer meetings and there will be many moments where we will be able to present X,” he said. Recordings were verified by meeting workers.
“Our customers are cheering us on and are excited and in awe of all the progress we’re making,” added Ms. Yaccarino.
While X’s ability to attract small and medium-sized businesses would be a win, those advertisers are unlikely to replace Fortune 500 companies with significant ad budgets, said Jasmine Enberg, an Emarketer analyst who covers X.
“There is still a healthy dose of skepticism and concern among big brands, which tend to be more risk averse, about advertising on the platform,” he added. “There is a risk of content there and retaliation from Elon Musk.”
X lost about 52 percent of its U.S. ad revenue in 2023, with total earnings falling to about $1.13 billion, according to Emarketer estimates. The company forecasts an additional 2.5% decline this year, to $1.1 billion.
Mr. Musk did not respond to a request for comment. X declined to comment.
Ms. Yaccarino, a longtime TV executive who worked at NBCUniversal before joining X last June, told employees she planned to turn the company into a “video-first” platform that competed with YouTube and TikTok.
“We know the importance of turning the business around in the US,” Monique Pintarelli, an advertising executive at X, said during a meeting, according to a recording. “We’re making tremendous progress driving reactivations across the US, with a 65 percent increase in active advertisers returning to the platform since January.”
Ms. Pintarelli noted that the shift of X’s current advertisers to smaller businesses was a distinct shift from Twitter’s historical reliance on big brands for most of its revenue.
Moving away from the top brands could shield X from some of the volatility it has faced since Mr. Musk’s takeover. Hate speech and violent content have increased on the platform, according to researchers. Marketers of well-known brands such as Apple and Disney were hesitant about having their brands appear next to this content.
“We’re also working hard to make sure we’re building a business that’s much more resilient for the future, one that’s less dependent solely on Fortune 500 companies,” Ms. Pintarelli said.
