Advertisers are hoping TikTok can return to the U.S. soon after the ban, which is likely to take effect Sunday. The future of TikTok in the United States now appears to be in the hands of President-elect Donald Trump. Advertisers argue that an extended U.S. shutdown would reduce TikTok’s value as users flee.
If TikTok returns to the US after going dark, will advertisers come back too?
That was the big question floating around in the advertising industry on Friday after the Supreme Court on Sunday upheld a law that would force TikTok’s Chinese owners to leave the app or have it banned.
Once TikTok’s ban goes into effect, brands won’t be able to run ad campaigns in the U.S., but they can still log into the ad platform and control ads that run on the app in other countries, multiple ad agency executives told Business. spoke. insider.
TikTok officials said they would consider refunding advertisers for campaigns that were not completed by the time the ban went into effect, one agency executive said. They, like several others interviewed for this article, requested anonymity to discuss client plans and protect business relationships. Their identities are known to BI.
Despite the moves and confusion, and claims from Congress that the app could be weaponized by the Chinese government for data collection and spreading propaganda, industry officials say TikTok has been relaunched in the United States. If so, most advertisers said they are prepared to bounce back.
“Our clients have had so much success with this platform that they can’t take their eyes off it completely,” a second agency executive told BI.
TikTok generated about $12 billion in advertising revenue in the U.S. last year, according to estimates from research firm EMARKETER.
As the possibility of TikTok’s shutdown loomed large in recent months, the agency was already advising clients to allocate TikTok’s budget to broader apps if a ban were to materialize.
John Molina, senior director at digital agency Brainlabs, advises clients to allocate about 75% of their TikTok budgets to Meta for Facebook and Instagram Reels and the remaining 25% to YouTube Shorts once the ban goes into effect. He said he is doing so. He said advertisers should monitor the performance of these campaigns over the coming days and optimize their budgets accordingly.
Meta and YouTube are expected to be big beneficiaries of TikTok’s woes, but some ad buyers said the companies are not equal replacements.
“Many brands are seeing organic new engagement from TikTok, not just from advertising, but from people reviewing products and filming unboxing videos,” said a third agency executive. Ta. “Brands can connect with new and diverse audiences, and that’s what we expect from every platform going forward.”
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Advertisers hope TikTok bailout deal is concluded soon
TikTok and many of its advertisers are now hoping that Trump will save the app once he takes office next week. President Trump recently said he opposes banning TikTok, but on Friday he said in a social media post that he would make a decision on the app soon.
A TikTok representative pointed to BI a video posted on Friday in which TikTok CEO Shou Zi Chew said, “We will find a solution to keep TikTok available in the U.S.” We thanked President Trump for the opportunity to work with us to achieve this goal.
TikTok CEO Shou Zhi Chu. Chip Somodevilla (via Getty Images)
Whether advertisers’ appetite for TikTok persists will depend in part on how long a bailout deal takes, especially since parent company ByteDance is expected to require approval from the Chinese government. be done. Even if creators find success elsewhere, they won’t want to reestablish themselves on TikTok, and advertisers will follow their audience.
“It would be shocking if a big-time TikTok creator could replicate that success in a week, but if it was a few months, that’s too far away,” said Shamsul Chaudhry, vice president of paid social at digital agency Jellyfish. It may pass,” he said.
A third agency executive said some advertisers will have big questions about TikTok’s new owners before picking up where they left off. For example, you may want peace of mind that you can continue to run global campaigns from the US, details about how your data will be handled going forward, and information about the brand safety controls available to you.
Brands are ramping up their use of YouTube Shorts and Meta Reels
For now, advertisers are preparing to implement contingency plans. Rival apps are keen to make the process as easy as possible. January is marketing budgeting season, with many media companies luring advertisers with incentives.
“We are learning from multiple providers, including other social platforms and non-social media providers, how to make TikTok’s audience available on their own platforms as well, value-add based on minimum incremental spend, and influence such as acquisitions. We’re hearing about reallocation incentives, such as discounts on larger units. We’re also offering funding to support creative projects,” said Prerna Tareja, managing director of integrated investments and partnerships at media agency Crossmedia. said.
When advertisers drag and drop their TikTok campaigns onto Meta or Google, ad prices can skyrocket given the supply and demand auction dynamics of these platforms.
“We may see CPM disrupted in the short term,” said James Poulter, head of AI and innovation at creative agency House 337. CPM refers to the cost of generating 1,000 ad impressions.
Language learning app Duolingo, a major TikTok advertiser known for its “freewheeling” marketing that features a green owl mascot and sarcastic reactions in the comments, has seen the film before.
Manu Orssaud, Duolingo’s head of marketing, said the company is focusing more on YouTube Shorts. Duolingo
Manu Orssaud, Duolingo’s chief marketing officer, said the company was shown the importance of adaptability when TikTok was banned in India in 2020.
The brand is particularly focused on YouTube. Last year, Duolingo increased the number of views on its YouTube Shorts by 423% to 1.1 billion, and the number of subscribers to its YouTube channel increased by 3.3 million to a total of 5.2 million.
“TikTok’s algorithm has been revolutionary, but what’s truly driving our success is the creativity and innovation of our social team,” Olso said.
