Tuesday, November 5, 2024

How Musk dropped all pretence of civility to wage war on advertisers

Must read

Yaccarino pointed to a US House of Representatives committee report that accused Garm and its members, which include Unilever and Mars, of conspiring to shun the social network.

“To put it simply, people are hurt when the marketplace of ideas is undermined and some viewpoints are not funded over others as part of an illegal boycott,” she wrote. “This behaviour is a stain on a great industry, and cannot be allowed to continue.”

The outcome of Musk’s legal crusade will be watched eagerly.

GB News, which has suffered its own advertising boycott since its launch in 2021, has said it is “closely monitoring” the situation and is understood to be considering its own potential action against ad agencies.

X has claimed boycotts have deprived the company of billions of dollars in revenue, meaning it could be in line for significant damages if successful.

Merely launching the legal action could also serve as a deterrent to ad groups plotting boycotts.

Yet in declaring war, Musk risks damaging relations with advertisers beyond all repair.

The lawsuit coincides with heightened scrutiny over X’s role in the spread of disinformation in the wake of the Southport stabbings.

Musk himself has also clashed with the Prime Minister over claims that “civil war is inevitable” in Britain.

For Ajaz Ahmed, chief executive of ad agency AKQA, these issues are at the heart of the problem.

“A social media platform cannot force companies who have legitimate concerns about brand safety and content moderation to buy advertising space on it,” he says.

“Advertisers have the right to protest against the proliferation of content they deem to be toxic and harmful.”

ISBA, a UK ad industry body which is part of Garm’s steering committee, also insists that every brand has the “right to spend where it sees fit”.

Given Musk’s declaration of war, analysts believe he risks alienating brands further and undermining his future business model.

“It is just breathtaking to see a service provider attack their customers this way and it certainly flips things on its head,” says Richard Pinder, chief executive of ad agency The Hunger.

“You attack your customers for not liking the food in your restaurant and they might not come back.”

Latest article