The World Federation of Advertisers (WFA) has closed the Global Alliance for Responsible Media (GARM) after Elon Musk’s X (née Twitter) filed a lawsuit alleging that its members had illegally colluded to stop spending on the platform.
WFA CEO Stephan Loerke told its members in an email that the decision was “not made lightly” but that GARM is a non-profit with limited resources.
However, he added that the WFA and GARM would contest the allegations in X’s suit and was confident that it would “demonstrate our full adherence to competition rules in all our activities.”
X filed its suit just two days ago, alleging that GARM’s members illegally colluded to “collectively withhold billions of dollars in advertising revenue” from the platform.
Linda Yaccarino, CEO of X and former NBCUniversal ad exec, posted on the platform that the closing of GARM was a “step in the right direction.”
No small group should be able to monopolize what gets monetized. This is an important acknowledgement and a necessary step in the right direction. I am hopeful that it means ecosystem-wide reform is coming. https://t.co/BlHqHqZEyp
— Linda Yaccarino (@lindayaX) August 8, 2024
Nishma Patel Robb, who until recently was the top marketer for Google UK, expressed shock that the WFA had bullied into shutting down the non-for-profit GARM.
In a LinkedIn post, she said: “Well I’m sure you’re all desperate to now go spend on X against the cess pit shite content on there?!! Oh sorry I mean ‘the global town square’ 🙄
Good to see that Elon Musk’s efforts to woo advertisers at Cannes are paying off! 🙄
“Please help me to have to stop eye rolling and ensure we keep starving hate – and not let Musk and his bros bully anyone into telling them where and how they have to spend their marketing budgets. Especially against content that is not considered safe!”
The move follows extended flip-flopping by Musk following his takeover of Twitter. Late last year, he told the advertising industry at large to “Go fuck yourself”.
He also promised in November last year to file a “thermonuclear lawsuit” against Media Matters for America, a group that seeks to redress misinformation spread by right-wing groups in America. Media Matters had told IBM that X had placed its ads next to content promoting Adolf Hitler and the Nazi Party.
IBM subsequently pulled its ad dollars. Media Matters then reported finding ads for Amazon, NBA Mexico, NBCUniversal Catalyst, Action Network, and Club for Growth next to white nationalist hashtags such as “KeepEuropeWhite,” “white pride,” and “WLM” (“White Lives Matter”).
Then, in Cannes, Musk said that not all of the advertising industry needed to “Go fuck yourself” and that his comments were only addressed to those advertisers that had chosen to stop spending on X. Musk said that advertisers had the right to choose only to appear next to content that they deem safe. However, they did not have the right to insist on content being removed from the platform — quite how he’s squaring that circle in his own head remains a mystery.
Last month, in a US Congressional hearing, right-wing commentator Ben Shapiro branded GARM members — including the likes of Unilever, Disney, Coca-Cola and more — members of a “cartel”.
“In reality, GARM acts as a cartel. Its members account for 90 per cent of ad spending in the United States–almost $US1 trillion ($AU1.41 trillion). In other words, if you’re not getting ad dollars from GARM members, it’s nearly impossible to run an ad-based business. And if you’re not following their preferred political narratives – the ones Kara Swisher and Dianne Feinstein would follow – you will not be deemed ‘brand safe,’” Shapiro told legislators.
Of course, the shutting down of GARM will not mean that advertisers are now compelled to spend their ad dollars on X. Hopefully someone can remind Musk of this fact.
