Nikita Mishra
Jan 15, 2025

X escalates fight against advertisers

Less than a week before President-elect Trump takes office, X doubles down on legal war against advertisers with plans to expand its antitrust lawsuit.

X escalates fight against advertisers

Elon Musk’s X (formerly Twitter) is ramping up its legal battle against the antitrust suit it filed against advertisers, preparing to name additional defendants in its lawsuit, according to Business Insider. The lawsuit, filed in August 2024 in Texas, accuses brands of colluding to withhold billions in ad revenue and violating antitrust laws. Specifically, X claims members of the now-defunct Global Alliance for Responsible Media (GARM) organised a boycott of the platform.

Current defendants include the World Federation of Advertisers (WFA), CVS Health, Mars, Orsted, and Twitch. While Unilever was initially named but reached a settlement in October 2024 and was dropped from the case. A recent legal filing revealed that X plans to submit a second amended complaint by January 25, 2025, adding "multiple additional defendants."

GARM ceased operations shortly after the lawsuit was filed, citing financial constraints as the reason for its closure. Meanwhile, the WFA has denied the allegations, insisting that its actions complied with competition law.

Kantar Media Reactions 2024 report paints a grim picture of X’s deteriorating reputational issues among advertisers. Trust in the platform has plummeted, with only 4% of marketers now viewing X as a brand-safe space. Confidence in its advertising has eroded sharply, dropping from 22% in 2022 to a mere 12% in 2024. A staggering 26% of marketers plan to cut their ad spending on X in 2025—marking the largest pullback of any major global platform.

The platform’s financial outlook is equally bleak. According to eMarketer, X is projected to attract just 0.2% of worldwide digital ad spend in 2025, lagging dramatically behind rivals such as Facebook at 14.6% and TikTok/Douyin at 7.1%. 

The timing of the lawsuit changes coincides with political shifts in the US. Less than a week before President-elect Donald Trump takes office for his second term, speculation is rife that Musk’s close relationship with Trump could influence X’s growth trajectory.

Advertisers, including IBM, Comcast, Warner Bros. Discovery, Apple, and Disney, have cautiously returned to X following the U.S. election results in November 2024. However, ad spend remains a shadow of its former levels. Comcast spent just under $1.5 million on the platform this year, Warner Bros. Discovery allocated $1.1 million, Disney dropped to under $550,000, Lionsgate spent less than $230,000, and IBM allocated a token amount of less than $2,000.

Apple also returned to X, after a pause in advertising. X still leans heavily on core advertisers such as Karma Shopping, Canles Shoes, and Kueez Entertainment, which collectively accounted for only $68 million in ad spend in 2024. While this is step forward for X, the subdued spend shows the ongoing struggle to win back advertiser trust and stabilise its revenue base.
Source:
Campaign Asia

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