The wildly popular app faces an uncertain future in the U.S., but it’s not going away
Marketers go where their audiences go. If people are on TikTok — which has more than 1 billion monthly users worldwide — so too will brands, regardless of a looming ban if the Chinese-owned app is not sold by mid-January 2025. “Consumers don’t know or care, really, about the pending sale and political controversy,” says Dave Kersey, chief media officer at ad agency and ANA member GSD&M, whose clients include Fruit of the Loom, Southwest Airlines, and Stanley. “They’re still engaging at rapid rates. As long as our consumers are engaging, we want to be right there with them.”
The controversy surrounding TikTok has only accelerated in the past few years, with bipartisan agreement emerging in Washington that the video-forward app — which exploded during the COVID-19 pandemic — is a national security threat.
Soon after President Biden signed a bill in April forcing TikTok’s Beijing-based parent company, ByteDance, to sell the app or face a ban in the U.S., TikTok sued the U.S. federal government, saying the potential ban violates the First Amendment. In early August, the U.S. Justice Department and the Federal Trade Commission sued ByteDance and TikTok for widespread violations of children’s privacy laws. About two weeks later, TikTok’s legal team filed another lawsuit arguing that the U.S. is illegally singling out the app.
Brands are not deterred. TikTok’s U.S. ad revenue is expected to increase 38.1 percent this year to more than $10 billion, according to Jasmine Enberg, VP and principal analyst at Emarketer. “The uncertainty around [TikTok’s] future has caused some advertisers to be more cautious with their ad and influencer marketing spending there, but most aren’t making any significant changes to their TikTok budgets through at least the end of 2024,” Enberg says.
To be sure, ad spending on TikTok pales to the $56 billion U.S. advertisers are expected to drop on Meta in 2024. Just 26 percent of marketers use TikTok.
That may be changing. Industry observers insist that the app offers marketers advantages that other social media networks do not, including an algorithm that intuits consumer behavior among its highly engaged and growing audience.
“TikTok’s user base is still extremely engaged,” says Brad May, VP of creative and strategy at Reach Agency, whose clients include Clorox and Nestlé. “We see campaigns succeeding there. We see brands increasing spend there. Of course, there’s a picture that’s painted in the news around the controversy of the ban. That is one perspective. But it is not really evident on the platform itself. It’s kind of just business as usual.”
Part of a Diversified Strategy
Perhaps what mainly distinguishes TikTok from its rivals is its lean-in quality.
“On Instagram, and really all Meta products, it’s more of a passive environment,” Kersey says. “It is just thumb scrolling, whereas on TikTok, it is people consuming content, participating in content, creating their own stitched versions of content. That offers incredible value, especially if you’re a brand doing it well, where you can get people to engage with your brand in the most authentic and unique way possible.”
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