Just days after Elon Musk’s X Company sued GARM, a nonprofit ad group that ensures digital ad safety for 150 brands and more than 60 major advertisers, the group has announced it is shutting down.
The group, called the Global Alliance for Responsible Media (GARM), was founded in 2019 to help brands prevent their ads from appearing next to offensive, illegal, or violent content on social media. Advertisers argue that when their ads appear next to such content, it immediately creates a risk for the brand. In its five years of existence, GARM has developed tools to help advertisers avoid unwanted ad placements.
“GARM is a small nonprofit, and recent allegations that unfortunately misrepresent its purpose and activities have significantly strained its resources and finances,” the alliance said on its website. “So we have made the difficult decision to cease operations.”
X Company’s Lawsuit and Advertiser Challenges
X’s lawsuit names several defendants, including GARM’s creator, the nonprofit World Federation of Advertisers, as well as major U.S. corporations Unilever, Mars, and CVS. The suit alleges that X’s “boycott” violates the Sherman Act. However, PCMag writes, the lawsuit could also be seen as an attempt to sue advertisers simply for choosing not to do business on X.
X CEO Linda Yaccarino welcomed GARM’s closure. “A small group should not be able to monopolize what is monetized. I hope this means that reform of the entire ecosystem is coming,” Yaccarino wrote in response to a tweet from the House Judiciary GOP account, which hailed the group’s closure as a “big win.”
Since Musk bought Twitter in 2022 and renamed it X, the platform has had trouble retaining large advertisers who have taken issue with extremist content, misinformation, and a near-total lack of moderation of posts, reminds NIXSOLUTIONS. Last year, companies including Apple, Disney, and IBM suspended ad buying on X after a Media Matters investigation found some of their ads next to objectionable posts.
Musk threatened to sue Media Matters, saying their report was a “fraudulent attack on our company.” That same year, Musk lashed out at the advertisers who left, wishing them [not verbatim] a safe journey. The New York Times, for its part, estimated that the advertisers leaving X could cost the company $75 million annually.
We’ll keep you updated on any further developments in this ongoing situation between X Company and advertisers.