Serial lawsuit-filer and entrepreneur Elon Musk launched a high-profile, if somewhat muddled and awkward legal campaign against a global advertising group this week--plus a short list of top-rank brands like Unilever. In the X Corp. lawsuit filed August 6, the billionaire owner of social media platform X alleged that a nonprofit ad issues group and some large advertisers allegedly conspired in an "illegal" boycott. Now the group in Musk's crosshairs, the Global Alliance for Responsible Media, GARM, announced plans to close.
In an email to global ad body World Federation of Advertisers (WFA) members, Stephan Loerke, WFA's CEO, apologized for the decision to shutter GARM, which was "not made lightly" and explained simply that the body's limited resources wouldn't be enough to combat X's lawsuit, industry news site AdWeek reports.
The nonprofit GARM was established in 2019 as a U.S.-based initiative by WFA--which counts influential names like Adidas and, oddly, X itself as members. It was set up around the idea of brand safety, keeping member ads away from troublesome content, and pointing out safe platforms for ad placements that wouldn't damage brands' images.
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The twisty, tiresome back-and-forth between the increasingly angry Musk and advertisers started after the self-styled free speech advocate bought Twitter in 2022 and swiftly renamed the social media platform X. Advertisers quickly voiced concern that X was becoming a place where their ads could be shown alongside hateful or extremist content, and over time many big advertisers like IBM abandoned the platform, angering Musk. The new owner then accused former ad partners of attempting "blackmail." He also publicly told advertisers to, "f--- off." Many did so, eventually spurring Musk to, this week, launch a lawsuit targeting the ad industry for taking his advice.
In a statement provided to Adweek, Claire Atkin, co-founder of adtech watchdog group Check My Ads, pointed out that although GARM is gone, ad agencies and their multinational corporate clients won't forget. "Advertisers know a bad ad placement when they see one," Atkin said, adding that the decision to close GARM may influence advertisers who may now "flee X, and quickly," so that they don't find themselves targeted by a Musk-led lawsuit in the future. Speaking to news site Mashable, the ad watchdog underlined that Musk has simply proved he's not trustworthy, and that "advertising on X is a treacherous business relationship for advertisers."
Check My Ads seems to be suggesting Musk may have accidentally set off something like the famous Streisand effect: an online phenomenon coined in 2003 when the actress and singer sought to prevent the posting of photos of her house. Her efforts ultimately drew widespread attention to her issue and actually worsened the problem after she launched an aggressive effort to "solve" it.
Meanwhile, Mashable also revealed how surprisingly small GARM was--with only two full-time employees--and noted that the WFA itself (which has presumably much deeper pockets than GARM) admitted no wrongdoing and promised it will continue to challenge Musk's lawsuit. The news site also noted another group that seems happy about GARM's demise: the Republican-led House Judiciary Committee, whose critical report on the group was cited in X's lawsuit. The committee said--ironically in a post on X--it thinks that GARM's end is a "Big win for the First Amendment" and a "Big win for oversight."
Industry observers' opinions differ. They suggest Musk's tactics against the ad industry may actually end up being a big loss for X's ad revenue prospects. Another classic lesson in how not to run a business from Elon?