A fierce battle in the advertising market
The former Twitter, now X, is continuing its legal battle with big brands in the advertising market. The company has added Lego, Nestlé, Pinterest, Shell and other advertising giants to its antitrust lawsuit. X CEO Linda Iaccarino has called the situation a “systematic illegal boycott.”
How did the boycott begin?
X first filed a lawsuit in August 2024 against the World Federation of Advertisers (WFA) and its brand safety initiative GARM, accusing them of encouraging advertisers to boycott Twitter.
The WFA suspended GARM shortly after, calling the allegations “misrepresentative.” However, the federation said it was prepared to defend itself in court.
Why are big advertisers being targeted?
X alleged in its lawsuit that the WFA and GARM had called for an advertiser boycott to force Twitter to comply with its brand safety standards. As a result, at least 18 advertisers stopped advertising on Twitter in November and December 2022, while others significantly reduced their advertising spend.
X is forced to rely on small and medium-sized businesses
The boycott has worsened X’s position in the advertising market. With large brands leaving, the company’s revenue now comes from small and medium-sized business advertisers. As demand for advertising has fallen, prices have also fallen.
“X’s advertising prices are now significantly lower than its main competitors in the social media market,” the complaint states. This suggests that brands that boycott are missing out on the opportunity to use the space to advertise.
Elon Musk’s cautionary statement
X’s owner, Elon Musk, gave a pessimistic assessment of the company’s financial situation at a January meeting: “User growth is not growing, revenue is below expectations, and we are barely making ends meet.”
What does the future hold?
X’s anti-boycott lawsuit could have a major impact on the advertising market. If the company wins, it will have the opportunity to start working with big brands again and restore its revenue stream. Otherwise, X risks falling behind its competitors.
This lawsuit could redefine the rules of the digital advertising market. Everyone is now watching the outcome of this legal battle closely.
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