Social Platforms Keep Paying Fines. Ad Budgets Keep Growing.

Last month, a New Mexico jury ordered Meta to pay $375 million for violating state consumer protection laws related to child safety, and the next day a California jury found both Meta and Google liable for negligence in fueling a young user's depression and anxiety. 

These are the first cases in which social platforms have been held directly accountable for harm to children, and they were called landmark decisions.

But if history is any guide, advertisers won't be pulling spend anytime soon. Guideline's chief insights and analytics officer Sean Wright pointed to a consistent pattern: every major platform scandal of the last six years—FTC fines, the Instagram teen mental health revelations, state AG lawsuits—has been followed by double-digit revenue growth in the same quarter. As long as the reach stays high and the cost stays low, the math still works for most marketers.

That calculus could shift, though. Wright compared the situation to the gradual downfall of the tobacco industry, noting that two or three more plaintiff wins could begin to change advertiser behavior. Rising CPA costs driven by platform AI investments are already making the value proposition less attractive, and social media bans for children in Australia and Indonesia are beginning to shrink global audiences.

If usage drops, platforms will likely raise ad prices to compensate, which could finally push budgets elsewhere. Wright pointed to Reddit and retail media networks as early beneficiaries of brands already looking for alternatives.

Full story: Marketing Brew