‘It seems a bully has won’: Ad industry reacts to GARM’s demise after Musk’s X lawsuit | Performance Marketing World August 2024

Tech billionaire’s legal ​“war” could signal a shift towards a payment model for the platform as its relationship with advertisers continues to fracture.

by Robin Langford 12 August 2024

Last week the Global Alliance for Responsible Media (GARM) announced it was ​‘discontinuing’ after Elon Musk’s X filed a lawsuit against its parent organisation, the World Federation of Advertisers.

The lawsuit claims the advertisers – acting through the WFA initiative – colluded in a way that violated US antitrust laws. 

Announcing the move, Musk wrote on X: ​“We tried peace for two years, now it is war.” 

The non-profit GARM initiative intended to help members avoid advertising on harmful websites, had limited resources and was staffed by only two full-time employees. It counted over 100 major businesses among its members, including Unilever, Mars and CVS – brands named by X in its lawsuit. 

The WFA will continue on and challenge X’s lawsuit, saying they committed no wrongdoing.

Musk has cultivated animosity within the ad industry since buying X, formerly known as Twitter, for $44bn in 2022. He famously told advertisers to ​“go f*** themselves” in an interview last year, before attempting to woo them back in a stage session at Cannes Lions in June. The billionaire entrepreneur has spoken of his ambitions to transform X into an ​‘everything app’ – where users pay for goods and services via the platform, much like the successful model used by companies such as Wechat in Asia. 

According to a recent discovery by app researcher Nima Owji, the company is working on adding a ​“Payments” button to the navigation bar under the bookmarks tab, which could signal a shift towards a subscription revenue model.

To assess the wider impact of GARM’s shut down, PMW spoke to a number of industry experts who discussed the impact on brand safety, staff morale and the merits and drawbacks of advertiser blacklists. 

“Every advertiser must make their own individual decisions on advertising investment”

Phil Smith, Director General at ISBA, the UK advertiser body that is part of the WFA, said: ​“The difficult decision made by the WFA to discontinue GARM does not affect ISBA’s commitment to user and brand safety online. We have been consistent in our strong support for platform safety and for a brand-safe environment, where our members’ advertising does not appear next to unacceptable or harmful content.

“ISBA has also been consistently clear that every advertiser must make their own individual decisions on advertising investment – and every advertiser has the right to spend where it sees fit.”

“A challenge for our industry and one that will require cross-industry collaboration to solve”

Paul Bainsfair, Director General of the IPA, said: ​“We are disappointed to hear that GARM is being discontinued. GARM served an important role in tackling illegal or harmful content online, raising standards across the board in the process. Illegal and harmful content on digital media platforms remains a significant challenge for our industry and one that will require cross-industry collaboration to solve.”

“The people really on my mind right now are those who work for X”

Fiona Salmon, Managing Director at Mantis, said: ​“Like so many others, my first response was shock that a company like X would use its influence in such a harmful way. However, the people really on my mind right now are those who work for X or who may be interviewing for roles at the platform and must be feeling hugely conflicted.

“X has continued to play a crucial role in how we all consume media and there are many brilliant people in the company that are rightly proud of the mission it was set up to achieve. These individuals may feel embarrassed at the approach its leadership has taken, especially in respect to an initiative such as GARM, which was created with all our best interests at its heart.”

“Let’s hope the industry doesn’t retreat back into the dark ages”

Richard Raddon, CEO of Zefr, said: ​“Today is a sad day for the Industry. Zefr entered the brand safety measurement space when GARM was created. GARM established a common framework that allowed for increased transparency and accuracy with brand safety reporting. 

“Let’s hope the industry doesn’t retreat back into the dark ages where every placement no matter the risky content adjacency is considered 99.9% brand safe. That is equivalent to ​‘alternative facts’.”

“In the absence of GARM, brands must be looking for better tools and placements”

Mateusz Rumiński, VP of Product at PrimeAudience, said: ​“The impact of the discontinuation of GARM following X’s lawsuit cannot be understated. Displaying ads next to brand-safe content is essential for maintaining the integrity, reputation, and trustworthiness of a brand. Ads placed alongside inappropriate or controversial content can harm brand perception and customer loyalty. Unfortunately, social media platforms often lack robust tools and transparency to ensure that ads are consistently placed next to brand-safe content. The dynamic and user-generated nature of these platforms makes it challenging for brands to monitor where their ads appear, which can also lead to potential risks of brand damage.

“In contrast, the Open Web provides a range of tools and technologies that allow advertisers to exercise greater control over where ads are being placed. These include content verification services, programmatic buying filters, and keyword blocking, which ensure ads appear in appropriate and safe environments. This can be bolstered by the use of generative AI, which elevates brand safety by moving beyond basic keyword blocking to a more nuanced understanding of an article’s context and tone, which allows for greater accuracy. It is clear that, in the absence of GARM, brands must be looking for better tools and placements, like generative AI, wherever possible to ensure that brand safety is prioritised.”

“Blacklisting is not the way to stop misinformation”

John Gable, CEO of AllSides, said: ​“GARM encouraged the nation’s leading advertisers to use opaque and biassed blacklists to determine which media outlets and platforms to boycott. These lists, which are not open to public scrutiny, help shape the flow of billions of dollars in ad spending. 

“The GARM model raises serious concerns about how small groups can exert unseen influence on the free flow of information. Blacklisting is not the way to stop misinformation. Defunding can actually promote more misinformation as hidden agendas and bias take over.”

“The irony is the need to manage brand safety hasn’t changed”

Tony Uphoff, President of Pipeline360, said: ​“GARM has had a considerable positive impact on the industry since it was founded in 2019. The irony is that with the news of its closing the need to manage brand safety hasn’t changed and remains a significant issue for the industry. As a company that was founded on advanced data governance, compliance and brand safety capabilities, we’re hopeful that some of other industry associations including IAB, ISBA and IPA can continue to champion this critical issue and advance the progress made by GARM.”

“I’ve seen a number of industry leaders announce that they have closed down their Twitter accounts”

Stephen Jenkins, Founder & MD, Too Many Dreams, said: ​“The news that the WFA has decided to close GARM due to the drain on its resources and finances because of X’s threatened legal action is a huge loss to the advertising industry. The not-for-profit was a small operation with an outsized positive impact, both in its work to ensure advertising doesn’t fund illegal or harmful content online and, more recently, its sustainability push with the launch of the Global Media Sustainability Framework. And the irony that Twitter was a founding member of GARM has not gone unnoticed. 

“It seems a bully has won. But maybe Musk’s actions will actually accelerate the advertising exodus and hasten the platform’s demise. I’ve seen a number of industry leaders announce that they have closed down their Twitter accounts and I’ve now done so too. Perhaps more of PMW’s advertising audience will decide to do the same, which could be the industry’s ultimate retort.”