Linda Yaccarino’s Departure Deepens Uncertainty for X’s Ad Business

Linda Yaccarino’s sudden exit as CEO of X has left advertisers cautious amid persistent brand safety concerns and lingering doubts about the platform’s future as a dependable advertising venue.

A media buyer at a digital agency, who wasn’t authorized to speak to media, said only one of their clients has consistently advertised on X, primarily to reach politically active audiences. “It didn’t seem like [Yaccarino] was actually doing the job she had hoped to: make [brands] feel more comfortable with X,” the buyer said.

Following her departure, the agency has advised clients to pull back spending—especially those relying on leftover budgets, called slush funds, to test the platform.

Amber Tinker, paid social and influencer director at PMG, said X’s sales team under Yaccarino was responsive and offered significant incentives to bring brands back, including match credits early last year. For example, if a brand spent $50,000, they could receive an equal amount in ad credit. The platform also delivered attractive CPMs, sometimes dipping below $1, she said.

Yet several PMG clients witnessed their ads appearing alongside racially charged content. “Even if the platform is super efficient, the risk I take being on it right now is far greater than the results,” Tinker said, adding that she expects X to double down on brand safety following Yaccarino’s exit. 

While X introduced tiered brand safety settings, ranging from standard to maximum control, under Yaccarino’s leadership, Tinker noted that advertisers still shoulder much of the burden. “On other platforms, I don’t have to go to that extent to protect my investment,” she said.

Since Elon Musk’s $44 billion acquisition of the platform in 2022, X has seen a roughly 50% spike in weekly hate speech incidents, including homophobic, transphobic, and racist slurs. Its subscription-driven AI chatbot, Grok, made by xAI, has also drawn criticism for spitting out antisemitic tropes. Such instances have long spooked major brands like Comcast and Disney, which fled in record numbers in 2023.

A modest rebound in ad revenue

Since onboarding Yaccarino in June 2023 to stabilize a business in freefall after Musk’s takeover, X has yet to demonstrate sustained ad revenue. The platform is projected to grow U.S. ad revenue by 17.5% this year to $1.31 billion, according to eMarketer, marking its first increase in two years.

As ad dollars began trickling back, they did so under complex motivations. “The ones that did come back came back either because they have a strong personal relationship with Linda herself, or because they did a little bit of calculus around the lawsuits Musk put in the market,” said Lou Paskalis, chief strategy officer of Ad Fontes Media. “That’s more like buying insurance than buying advertising.”

Paskalis described Yaccarino’s stint as both a victory and a defeat. “Is that a victory because she got advertisers back on the platform? Yes. Is that a defeat because they’re never going to spend as much as they used to? Also yes. Both things can be true,” he said. 

Subscriptions and AI over ads

Musk has increasingly shifted focus from ads toward subscriptions and AI. The folding of X into xAI earlier this year signaled a long-term pivot away from ad revenue, according to three industry sources. In July, xAI raised $10 billion in debt and equity, underscoring the shift.

“When X folded into xAI, it was an indication that subscription revenue was going to become much more important than ad revenue for Musk,” Paskalis said. “All of a sudden, that might be a good time to take costs out of the ad side of the business.”

Lawsuits against advertisers could ease off

X’s combative leadership leaned heavily on lawsuits to pressure brands. In August, the company sued the World Federation of Advertisers and several marketers, accusing them of orchestrating an illegal boycott in violation of antitrust laws.

Ruben Schreurs, global chief strategy officer at Ebiquity, said the lawsuit “may lose some of its momentum with fewer people in power focused and dedicated to it.”

The situation is further complicated by Musk’s ugly divorce with President Donald Trump. “This just portends an acceleration of the decline in the platform’s importance to advertisers,” said Paskalis.

ADWEEK has reached out to X for comments.