X is back to warring with advertisers, and advertisers are back to executing caution when engaging with the platform, buyers told ADWEEK.
Two buy-side sources who have advertised on X this year said X’s new lawsuit against the Global Alliance of Responsible Media, an advertising trade body, makes them reconsider future investment in the platform.
X today filed a lawsuit against the Global Alliance of Responsible Media, the World Federation of Advertisers (of which GARM is a subsidiary), and GARM members CVS Health, Mars, Orsted and Unilever for using their influence to inspire brands to boycott X and depriving the platform of ad revenue. GARM is an industry organization that formed in 2019 to help brands avoid monetizing illegal or harmful content on digital media platforms.
X owner Elon Musk said on the platform today, “We tried peace for 2 years, now it’s war,” as he reposted CEO Linda Yaccarino’s post about the lawsuit.
This is an about face from Musk’s conciliatory presence at the Cannes Lions Festival earlier this summer, where he called brand safety “critical,” and said that “advertisers have a right to appear next to content that they think fits with their brand.”
One buy-side source, who is not authorized to speak with the media on the record, said a brand they work with had paused advertising on X last year after Musk made antisemitic comments in November but returned to the platform this year as the dust settled around that controversy.
“A lot of brands had kind of like slowly warmed back up,” to advertising on X, the source said, noting incentives X has given to advertisers.
Today’s lawsuit could change that calculus.
“Every advertiser needs to stop and think very hard right now, and decide if, Twitter just doesn’t fit a campaign, and [a brand is] not going to spend with them on this quarter or this initiative, is Elon going to just tell Linda Yaccarino to sue?” the buyer said. “Here’s a guy …who can fund any lawsuit forever.”
A large brand who advertised on X around the Olympics said the lawsuit would make the brand reconsider whether to even post organically on X. Their paid activation has ended.
“Why would I want to be in any way, shape or form, involved in a place that wants to sue individual advertisers and the bodies that authentically represent them for choosing to not advertise there?” the source said.
X currently takes the most time for VaynerMedia employees to monitor for their clients out of every other platform, given the myriad controversies and drama on X, said Anthony Scarola, vp of media and programmatic lead at VaynerMedia. He said today’s lawsuit is another example of the volatility of the platform, though noted the platform’s reporting on brand safety has become more granular, and thus has flagged more brand safety issues as a result.
