Lou Paskalis: The WFA's Capitulation to Elon Musk and the House Judiciary Committee is the Worst Setback for Marketing in Decades

If you work in marketing a very bad thing happened last week, perhaps the worst thing that happened in my three and a half decade tenure in the industry. Did you catch it? I’ll give you a hint, the event that I am writing about doesn’t involve Google, Adalytics, layoffs, CNN, IAS or DV. Stumped?

What happened last week that has me so concerned is that the World Federation of Advertisers (WFA) folded GARM in the face of a completely untrue report from the Jim Jordan lead House Judiciary Committee and a highly opportunistic lawsuit that it catalyzed from X owner and Twitter murderer Elon Musk. Based on some recent reporting By the Wall Street Journal, it’s possible to conclude that Mr. Musk actually influenced the House Judiciary Committee’s agenda to take on GARM. Some might conclude that this was the only path open to WFA, after all, GARM was not a money maker, it wasn’t designed to be, and shutting down GARM might dissuade Mr. Musk from following through on his suit against them that will be very expensive for them to defend against, even though they will ultimately win.

Why do I call this out as such a terrible outcome for the marketing industry? It sets a very dangerous precedent. It gives the perpetrators of misinformation a win that will undoubtedly embolden them in the future. The basis of both the House Judiciary Report and the subsequent suit against GARM by X is that GARM directed its members as to which platforms they should and should not invest their advertising dollars in. At no time, in any way shape or form, did that happen. GARM merely provided a framework which provided advertisers a common language and set of definitions to set their own policies when it came to what content, publishers and platforms were suitable for their own advertising investments. This was very much in line with their charter, first published on January 17 of 2020 after a year of vetting with publishers, platforms, including then Twitter, and many advertisers. You could have been able to review that charter here, but WFA took it down last week and now all you will see if you click on the link is an error message.

As someone who has made a career in the marketing industry, I understand the value of the work that trade associations do. Industry task groups often work together to solve issues that help the advertising industry create and maintain marketplaces so that advertisers eager to engage audiences can transact in clean, well lit environments where currencies are common, taxonomies are consistent and even ad units are standardized. For example, prior to 1998, there were no ad size standards in the digital realm leading to a ‘tower of babel like marketplace. The IAB stepped in and introduced the first set of standard ad units which significantly improved the digital advertising marketplace for both the buy-side and the sell-side. This was the result of a task force of publishers and marketers collaborating to create that first batch of standard ad units that represented the best options for all parties. Just like the work of GARM, this was done in full transparency with ample opportunities for anyone with standing to comment. This is some of the most vital work that trade associations do. If they don’t do this work, I can’t imagine what mechanism will be available to us, short of slow to respond regulation, to continue to harness new innovations to advance the art and science of marketing.

The WFA’s faintheartedness has put this long standing practice in jeopardy however. It’s rewarded the combination of an obviously politically motivated report by the House Judiciary committee that is a reflection of Jim Jordan’s agenda and not a reflection of the truth in any way and catalyzed a vanity infused nuisance suit from the world’s richest man to try to rewrite history and blame the wholesale departure of well-governed brand advertisers on a trade body and not his own antics which have turned X into a toxic dumpster fire of his own making.

What is even more chilling is that the lawsuit brought forward by X has named four advertisers as codefendants along with GARM. Just imagine the next time a marketer wants to participate in a trade association initiative or JIC (joint industry committee). This kind of litigation is widely acknowledged to be a SLAPP lawsuit, or Strategic Lawsuit Against Public Participation. A SLAPP is defined as a civil complaint or counterclaim that aims to silence or punish someone for speaking out on a matter of public interest. It seems odd to me that such an ardent supporter of free speech such as Mr. Musk would use tactics so blatantly designed to suppress it.

Now there will be new risk considerations that will lead to multiple rounds of discussion with the corporate communications team, the legal team, lobbyists and others that were not part of the equation in the past. I suspect that marketers will be precluded from participating in these task forces by one or more of the constituents above, dramatically reducing the gene pool of marketers available to participate and help shape these outcomes that are so vital to our business.

And, unfortunately, the near instantaneous capitulation of the WFA to this ill-conceived lawsuit does not stop there. Trade associations will be much more reluctant to embark on new initiatives to continue to level the playing field for the buy side and sell side, set standards and provide the essential leadership that keeps the advertising industry humming for fear of an emboldened House Judiciary committee seeking cheap political wins and disgruntled publishers and platforms looking for contexts to deflect why their business is underperforming. The analogy is like an overmatched boxer refusing to get in the ring for a previously scheduled fight. What if David never took on Goliath?

At the end of the day, a combination of political and commercial opportunism has conspired to conflate collaboration with collusion with the net effect of contributing to the growing polarization of our culture. While I am very proud to say that the marketing industry is and has always been driven by relationships that span the tests of time and endure career journeys that take many twists and turns that sometimes see friends on opposite sides of an issue (I am a good friend of Linda Yaccarino’s for example, which is on my mind as I write this), this rock in the pond will cause some to hold their cards a little closer, forego participating in vital, trade association driven initiatives and consider political consequences of their actions in a way that’s never been present in the calculus of our business previously.

A final word about what has played out since the House Judiciary committee released its interim report on GARM July 10. The absence of full-throated support from the WFA, from the more than forty marketers who participated in the GARM steering committees, the other trade associations such as my good friends at the ANA and the IAB may perhaps be the worst aspect of what has transpired in the ensuing month. This sent a very clear signal to not just the House Judiciary committee and others looking to make politically motivated attacks on our industry, it also paved the way for Elon Musk’s suit against GARM and the advertisers who had moved away from the platform.  Hiding in the shadows and hoping the that the eye of Sauron will not see you is not leadership, it’s the same kind of dynamic that gripped 1930’s Germany.

Lou Paskalis is an advertising executive with decades of experience in the industry. He currently serves as founder and chief executive of AJL Advisory. The views and opinions expressed in this op-ed are his.