Last month, in a surprise ruling, 20-year-old Kaley G.M. successfully sued Meta and Google over harms linked to childhood social-media use. A California jury awarded her $6 million in compensatory damages, holding Meta liable for 70% and Google (YouTube) for the remaining 30%.
Kaley alleged that using YouTube from age six and Instagram from age nine fostered an addictive cycle that triggered depression, anxiety, and body-dysmorphic disorder. Her lawyers argued that tech giants intentionally designed features such as endless scroll and autoplay to hook young users, despite internal data flagging mental health risks.
The verdict sent shockwaves through Silicon Valley. For years, 'Big Tech' appeared legally insulated, this moment showed signs that they are no longer above the law. It arrives amidst a global reckoning. Following Australia’s world-first under-16 social media ban, which saw the eSafety Commissioner restrict 4.7 million accounts, the UK and US are now moving towards similar prohibitions. With studies showing 11-20% teen addiction rates, the argument has reached a tipping point.
Following the California trial, and in a further escalation, Meta has begun removing ads from law firms soliciting clients who say they were harmed by social media use as minors. The removed ads, many from major firms like Morgan & Morgan and Sokolove Law, had run across Facebook, Instagram, Threads, Messenger, and Meta’s Audience Network, in the hopes of building a class action lawsuit that could yield lucrative verdicts. Meta justified the removals under its terms of service, citing efforts to prevent misuse or legal risks, adding that it would not allow trial lawyers to profit from its platforms while suing the company over alleged harm to children.
The $200 billion moral dilemma
For advertising, this is a crisis of complicity. Advertising dollars are the lifeblood of these platforms. Advertisers pour $200 billion annually into Meta and TikTok, knowing the dopamine hooks involved. Is it time for an industry reckoning? Do brands continue funding addiction or pivot to healthier spaces?
Ari Rosenberg, president and founder of IPC Pricing, recently said in a LinkedIn post that the digital ad industry has completely lost its moral compass: "It’s time for agency leaders to stand up and lead the redirection of ad dollars to publishers who serve the greater good at the expense of the dollars funding the destruction of the lives of others. It's time for us to stop oohing and ahhing when we meet employees at Google and Meta, and instead, start questioning their character."
However, Geoffrey Colon, chief strategy officer at Feelrmedia, does not think advertisers and morality are even in sync at the moment.
"Many businesses have aggressive targets to hit and it's a 'win at all costs' type of attitude now in business where there's still tons of allocation to ads on Meta and TikTok. What gives advertisers the upper hand in spending on these platforms is the advertisers have no control of these platforms. If there are any ethical fallouts at the platform level, advertisers can react in one of two ways: 1. We didn't know 2. We cut our spend with that platform."
This abdication of responsibility is often facilitated by adtech intermediaries. Over the last decade, rebates and incentive programmes have sometimes aligned agency commercial interests more closely with platform spend than with client ethics.
"Agencies historically have not shifted advertising budgets out of platforms on a permanent basis," says Iesha White, director of intelligence at Check My Ads. "Even when scandals emerge, any budget reallocations out of platforms are tied to the scandal’s news cycle: once the news cycle is over, campaigns are turned back on. In an ecosystem where agency margins grow thinner year after year, it’s not business-minded to see, much less act on, any moral crises."
The rot is not just social, it's financial. Meta recently admitted to earning billions from scam ads, while YouTube was caught serving adult-targeted ads to children. Despite these failures, the short-term focus of agencies ensures the status quo remains profitable.
Guillaume Legond, general manager of iProspect Singapore, says the question is not whether agencies or brands face a moral crisis, it's whether they are mature enough to evolve how value is defined. "For years, optimisation has followed platform incentives around attention and engagement. Agencies did not create those mechanics, but we have participated in maximising them because that’s how success was measured."
As regulators and parents demand better, top agencies are finally pivoting towards metrics such as 'quality exposure' and 'trusted environments' over raw attention.
"What we need to be doing is to relook at how we balance commercial outcomes with our responsibility not just as an agency, but as individuals as well," adds Legond.
Funding healthier digital spaces
So the logic goes that if the advertising industry is currently funding these addictive platforms, then it also has the power to break them or build better ones. Should agencies bite the bullet and funnel spend towards 'ethical-by-design' alternatives? Is there sufficient will in the industry to make this happen?
"If advertisers want to reach younger audiences in healthy ways, they need to fund new alternatives that aren't going to be created by the entrenched powers in these spaces," says Colon. "Also, competition is good especially if it is ethical by design."
Signs of a shift are appearing. "People are more willing to pay for experiences than just content. Gradually, we are finding that the grittiness of reality is preferred over digital perfection, that print is not going away and live events are making a comeback," adds Colon. "What this means is the amount of money agencies were putting toward digital advertising is shifting into areas like events, OOH and even direct mail."
Some budgets are being slashed by up to 50% in order to fund event marketing, with analysts suggesting brands can bypass social media toxicity without losing revenue. Suzanna Chaplin, CEO and founder of esbconnect, says that advertisers can continue to pump budgets into social and fund these dopamine hooks, or they could realise that people are looking for healthier spaces.
"I think this comes with stepping outside your normal publisher/media mix. Start looking at smaller, more niche players and place budgets with them," says Chaplin. "It might be a grassroots sports platform with youth teams across the country, a magazine aimed at children, or using email as an acquisition tool, and working with publishers who have audience segments which suit your needs, reaching your target in their inbox. It’s not necessarily about creating a new place; it’s about placing budgets with new publishers."
However, on the matter of the ad industry building their own social platforms, White warns that agency-owned platforms could create new conflicts of interest. "It would be unlikely that an agency would choose to tell its clients that the agency’s owned and operated platform directly monetised harm, and even more unlikely to give its platform a failing grade for ROAS."
While the EU discusses 'data sovereignty' and homegrown social alternatives, White remains sceptical of the maths. "Will we see some new social platforms focused on youth well-being coming out of the EU or UK, with government seeded funding? Maybe, only time will tell," says White. "But could these platforms even rely on advertising revenue from media agencies as a profitable business model? Can they compete with the deals offered by big tech giants? That is incredibly unlikely, based on current agency incentives to keep budgets fixed within established social media platforms that have deep pockets and enormous power."
Despite the hurdles, advertiser patience is thinning. Kantar found 26% of marketers plan to cut spend on X in 2025 due to safety concerns. If other platforms ignore the "moral crisis", they may face a similar permanent exodus. If the industry will not lead, regulation will.
"I think we have to look at history to see we probably should repeat some of the regulations that occurred in the 1970s around TV advertising," says Colon. "Whenever there were misstatements, fraud or lies in those ads, they were required to run 'rebuttals' to show they made misinformed claims. This was when TV was also around 20 years old as a medium. How old are social platforms? About 20 years old. Pulling ad spend is only a temporary solution. The larger solution needs to be what I would equate to a New 'Fairness Doctrine': running Public Service programming and content aimed at youth on the dangers of social media, the issues with dopamine regulation and the need to take care of your mental and physical health."
Ultimately, Chaplin argues that sincerity requires brands to actively encourage 'real-world' play over screen time. "One quick win is to think about how you can change the nature of the content you produce: fewer fast-moving videos and bright contrasting colours, slower formats, things that encourage dancing, singing or learning. Think about how you make the content help a child grow and not just keep them addicted."
Source: Campaign Asia
