X’s ad business is still half of its pre-Musk size — but it might be turning a corner

X CEO Linda Yaccarino announced this week that she’s departing the company after a tumultuous two-year run.

She’ll be leaving behind an ads business that is still reeling — about half the size it was before Elon Musk bought the platform formerly known as Twitter in October 2022. But for the first time in years, growth may be on the horizon.

The company generated $4.46 billion in global ad revenue in 2021 and $4.1 billion in 2022, according to eMarketer. Revenue cratered to $2 billion in 2023, a 51.7% decrease following Musk’s takeover. It dipped again last year to $1.94 billion.

Now eMarketer projects X’s ads business to rise to $2.26 billion this year, a 16.5% increase — the first time it would experience growth since Musk bought X, but still around half of its pre-Musk ad revenue.

X is still hemorrhaging users, though, as eMarketer projects its user base to fall 3.8% this year.

The social platform’s relationship with advertisers has been strained since Musk bought it. During The New York Times’ DealBook conference in November 2023, he infamously told advertisers to “go f--- yourself,” blaming what he called an “advertising boycott” against X.

He doubled down on his claims last year by filing an antitrust lawsuit against some advertisers affiliated with the Global Alliance for Responsible Media (GARM), which then discontinued its activities, citing that the lawsuit “caused a distraction and significantly drained its resources and finances.”

Yaccarino backed Musk’s allegations; in an open letter last year, she wrote in part: “People are hurt when the marketplace of ideas is undermined, and some viewpoints are not funded over others as part of an illegal boycott.”

Despite Musk’s scorched-earth approach, some big-name companies have returned to X after an advertising freeze, though they’re spending far less than before.

The platform’s former top five advertisers spent less than $3.3 million on X from January to September 2024, a 98% year-over-year drop, according to MediaRadar data cited by Adweek. The report noted that some new, smaller brands began advertising on X to take advantage of a less-crowded field.

Yaccarino’s exit comes just two weeks after the Federal Trade Commission greenlit the Omnicom-IPG merger on the condition that the new company would not engage “in collusion or coordination to direct advertising away from media publishers based on the publishers’ political or ideological viewpoints.”