This week, U.S. advertisers who rely on TikTok as their primary digital marketing tool scrambled to prepare contingency plans for the short-video service being banned in the country. Advertisers’ concerns are growing as January 19 approaches, when the service’s owner, Chinese company ByteDance, must announce the sale of its American business or face the platform being blocked.
Image source: Unsplash, Olivier Bergeron
A TikTok ban would be a blow to the advertising industry, according to one company’s marketing executive, as there had been speculation over the past few months that a solution would be found to keep the platform operational in the country. “Just a few weeks ago, it seemed impossible to imagine that there would be no TikTok. We all thought that any problems accessing the TikTok app would be slow and lingering,” said Kerry Perse, founder of marketing firm Influence & Inspire Consulting and former head of social media at Omnicom Group.
Let us remind you that ByteDance must complete the sale of TikTok assets in the United States by January 19, since otherwise the application, which is used by 170 million people in the country, may be blocked, which the authorities associate with national security. According to Reuters, TikTok plans to limit the operation of its application in the United States on Sunday if the American authorities do not grant a delay in the remaining time to comply with the requirement to sell the business. Earlier, a representative of the administration of US President-elect Donald Trump announced plans to take measures “to prevent TikTok from being blocked,” but it is unclear whether the authorities will have time to do this, since the new president takes office only on January 20.
According to the forecast of the marketing company WARC Media, if the TikTok ban comes into force in the United States, more than $11 billion annually invested in advertising will be at risk. Most of these funds will likely be distributed among other platforms, primarily Instagram✴ and the Shorts service, which is part of YouTube. TikTok employees are apparently unaware of what exactly will happen to the app in just a few days. The platform continues to offer advertisers new features, such as a tool launched this week that makes it easier to create text-based ads.
In recent years, TikTok has become a powerful tool for advertisers looking to reach young Americans in particular. The service occupied about 20% of the advertising market in US social networks, while back in 2020 it occupied only 2%. This is partly because the platform has promoted an online shopping culture, making it a stable driver of e-commerce sales. At the end of last year, about 43.8% of TikTok’s U.S. users made purchases on the platform, higher than Meta✴-owned Facebook✴ and Instagram✴, according to research firm E-Marketer.