Two years after Elon Musk acquired X (formerly Twitter), his confrontational stance against advertisers has intensified, culminating in a blunt “go fuck themselves” message to them. Advertisers initially dismissed Musk’s tirades, but his subsequent legal action against their top trade group, the Global Alliance of Responsible Media (GARM), has sent shockwaves through the industry, leading to widespread silence among major advertisers and trade organizations.
These groups, including the World Federation of Advertisers (WFA), are now refraining from public comment on the situation, highlighting the tension and uncertainty gripping the industry.
The controversy centers on the unraveling of GARM, a voluntary committee responsible for setting industry standards, which was dissolved following Musk’s lawsuit. The WFA, which oversaw GARM, decided to dismantle it, citing limited resources and the legal pressure from Musk’s accusations that GARM was operating like a “mob.”
This abrupt end to GARM is seen as a significant and troubling development, suggesting that influential figures can now potentially dismantle industry standards through legal means.
The dismantling of GARM signals a dangerous precedent for the advertising industry, where powerful individuals or entities can undermine collective efforts to address critical issues like brand safety and ethical practices.
Elon Musk
This situation could embolden others to challenge similar organizations, destabilizing the industry’s ability to self-regulate. The industry is now faced with the reality that its standards and accountability measures are vulnerable to legal and financial pressures from disruptive figures like Musk.
Josh Rosen, president of Hotspex Media, sees this as a wake-up call for the industry, highlighting the unpredictability and potential consequences of relying on platforms governed by volatile leaders.
He emphasizes the need for long-term stability and respect between platforms and advertisers, urging the industry to reconsider its associations in light of Musk’s actions. The collapse of X’s ad revenue, dropping from $5 billion in 2021 to just $114 million recently, is a stark indicator of the growing rift between advertisers and the platform.
Despite the legal battle, the WFA is committed to fighting Musk’s lawsuit and is confident in a favorable outcome. Legal experts also support this view, arguing that advertisers have legitimate reasons to distance themselves from X due to brand safety concerns and that their actions are protected under the First Amendment.
However, Musk’s lawsuit against GARM is not just about winning in court; it’s part of a larger effort to reshape the narrative around the ad industry and position himself as a defender of free speech against an allegedly elitist establishment.
Musk’s supporters, including Linda Yaccarino, CEO of X, and Chris Pavlovski, CEO of Rumble Video, have lauded the lawsuit and the downfall of GARM as victories in a broader culture war. The Republican-led House Judiciary Committee, which had been investigating GARM’s potential collusion against conservative platforms, also celebrated its demise as a win for the First Amendment.
This perspective ignores the detrimental impact of Musk’s actions on content moderation and advertiser confidence, further exacerbating the revenue crisis at X.
Amid this turmoil, industry experts like Chris Rigas of Markacy argue that Musk’s aggressive stance against advertisers is counterproductive, discouraging brands from associating with X. While GARM faced its own challenges, including criticisms of being co-opted by ad tech firms, it was never intended to be a nefarious entity.
Instead, it aimed to guide responsible media buying, and its dissolution represents a significant loss for industry standards. The silence from key industry players, who now view Musk with a mix of fear and uncertainty, underscores the deepening crisis within the advertising world as it grapples with Musk’s disruptive influence.
