Leaders at X, Elon Musk’s social media company, told employees this week that 65 percent of advertisers had returned to the platform since January, according to recordings of general meetings obtained by The New York Times, and that the smaller companies now made up the group. most of their income.
Executives, including Linda Yaccarino, who was appointed to lead the company a year ago, admitted 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 who attended on Wednesday and Thursday, who noted that the return of advertisers does not necessarily reflect an increase in revenue.
The meetings took place as Musk, who acquired the company for $44 billion in 2022, faced a vote by Tesla shareholders on Thursday over his pay package, valued at more than $45 billion. Some investors in Tesla, which accounts for most of Musk’s wealth, have expressed concern that X has distracted him. Later that day, the company announced that shareholders had approved his compensation.
Since Musk took over the social media company, the billionaire has cut 75 percent of the staff, reinstated hundreds of banned accounts and remade the platform to allow most expression, without consequences. In November, he told advertisers not to spend on X, dismissing them using an insult during an interview at the Times’ DealBook conference.
Still, Yaccarino painted a more optimistic picture this week while speaking to employees, promoting increased advertising by small and medium-sized businesses on the platform. She and Musk are expected to continue making their case to brands in meetings next week, as the two executives head to the Cannes Lions festival, an advertising industry summit.
“Hundreds of client meetings will take place and there will be many moments where we can show X,” he said. The recordings were verified by employees at meetings.
“Our customers encourage us and are excited and amazed by all the progress we are making,” added Ms. Yaccarino.
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“There is still a good deal 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 the content there and of retaliation by Elon Musk.”
X lost about 52 percent of its advertising income in the US in 2023, and total profits fell to around 1,130 million dollars, according to Emarketer estimates. The company predicts a further decline of 2.5 percent this year, to $1.1 billion.
Musk did not respond to a request for comment. X declined to comment.
Yaccarino, a longtime television executive who worked at NBCUniversal before joining X last June, told workers she planned to transform the company into a “video-first” platform that would compete with YouTube and TikTok.
“We know the importance of turning the business around in the United States,” Monique Pintarelli, an advertising executive at X, said during a meeting, according to a recording. “We are making tremendous progress in driving reactivations across the United States, with a 65 percent increase in the number of active advertisers returning to the platform since January.”
Pintarelli noted that the shift of X’s current advertisers to smaller companies was a distinct shift from Twitter’s historical dependence on major brands for most of its revenue.
A move away from major brands could protect X from some of the volatility it has faced since Musk’s acquisition. According to researchers, hate speech and violent content have increased on the platform. Marketers at household names like Apple and Disney have been nervous about having their brands appear alongside such content.
“We are also working hard to ensure that we are building a business that is much more resilient for the future, one that is less reliant solely on Fortune 500 companies,” Ms. Pintarelli said.
