Advertisers with ‘hair on fire’ brace themselves for US TikTok ban
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If a ban does occur, more than US$11 billion (S$15 billion) in annual US ad investment would be up for grabs.
PHOTO: AFP
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NEW YORK - Advertisers reliant on TikTok as a major digital marketing tool rushed to prepare contingency plans this week, as the realisation dawned on many that the popular Chinese-owned social media app may not be saved before a US ban takes effect on Jan 19
One marketing executive described it as a “hair-on-fire” moment for the ad world, after months of conventional wisdom saying that a solution would materialise to keep the short-video app up and running.
“It seemed unbelievable even as at just a few weeks ago to imagine that there would be no TikTok,” said Ms Kerry Perse, the founder of marketing firm Influence & Inspire Consulting and former head of social media at Omnicom Group’s media agency OMD.
“We all thought that any access issues to the TikTok app would be slow and drawn-out
Chinese tech firm ByteDance is facing a Jan 19 deadline to sell TikTok’s US assets or accept an unprecedented ban of the app, used by 170 million Americans, on national security grounds.
TikTok plans to shut US operations of the app on Jan 19 barring a last-minute reprieve, Reuters reported on Jan 15.
US President-elect Donald Trump’s incoming national security adviser said the new administration plans to put measures in place
“I think after a long time feeling like this was a ‘boy who cried wolf’ situation, we may actually have a wolf sighting,” said Mr Craig Atkinson, chief executive of digital marketing agency Code3.
If a ban does occur, more than US$11 billion (S$15 billion) in annual US ad investment would be up for grabs, according to a forecast from marketing group Warc Media.
Most of that spending is likely to shift to platforms where advertisers are already established and running short-video ad campaigns, primarily Meta’s Instagram and Alphabet’s YouTube Shorts, four ad agency sources told Reuters.
TikTok staff appeared to be in the dark about what exactly would happen to the app as of Jan 19, the sources said, although two of the sources noted that TikTok was offering favourable refund terms in the event services stop in the middle of advertisers’ campaigns. TikTok did not immediately respond to a request for comment.
Even as the ban approached, the company continued to pitch advertisers on new features, like a tool launching in test form on Jan 16 that would make it easier to create, modify and add advertisements in bulk, according to an e-mail from this week described to Reuters.
It also planned to host a booth at the upcoming World Economic Forum meeting of political and business leaders in Davos, Switzerland, next week, after holding cocktail parties at the Consumer Electronics Show in Las Vegas earlier in January.
Meanwhile, brands and content creators alike were downloading their data en masse in case the app becomes inaccessible as of Jan 19, hoping to salvage at least some of the fruits of their labour.
One influencer, who hawks cereal and beauty products in her videos, posted on Jan 14 advising her nearly 16,000 followers on how to save their videos.
“Here’s how to download your TikTok data so you don’t lose literally everything you’ve had from the past five years,” said Ms Maria Slate, grimacing, as the words “it’s fine I’m fine” displayed over her head. The sentiment was a marked change from the dominant mood in December, when advertisers told Reuters they were in no rush to shift their marketing budgets off TikTok despite a US appeals court upholding the law requiring a divestment or ban.
As at Jan 8, ad spending on TikTok was set to increase 57 per cent in the first two months of 2025, according to Guideline.ai, a research firm that tracks forward booking data from major ad agencies.
TikTok has become a powerful tool for advertisers looking to reach young Americans in particular in recent years, growing to 20 per cent of US social media ad spending from only 2 per cent in 2020, its first full year of operation in the US, Guideline.ai said.
Part of that power has come from the platform’s cultivation of influencers and online shopping culture, which has made it a reliable driver of e-commerce sales.
E-Marketer, another research firm, forecast late in 2024 that some 43.8 per cent of US TikTok users would have made a purchase on the platform by the end of 2024, a higher share than on Meta-owned services Facebook and Instagram. REUTERS
