TikTok Advertisers Back To The Drawing Table Amid Potential US Ban

Advertisers using TikTok to market their products and services to young audiences in the United States are now looking towards rival platforms in case the short video app is banned or sold in the United States.

These advertisers are currently awaiting the final decision on the recent action taken by the US House of Representatives to ban TikTok in the US because of national security concerns.

On Wednesday, US legislatures placed a vote forcing ByteDance, TikTok's parent company, to sell the platform in around six months or be banned.

The potential ban from the US is among the main challenges facing the social media company. However, the criticism from US regulators is not new. With a potential ban looming, advertisers on the platform are now looking toward competitors like Meta and Google.

The possibility of shutting down TikTok, which reaches 170 million users in the U.S., the majority of whom are young people, has spurred advertisers into action. Advertisers plan to transfer their TikTok budgets to Instagram Reels and YouTube Shorts. pic.twitter.com/IVJeG02ml9

- Swipeline (@Swipeline_Media) March 15, 2024

Advertisers Consider Reels and YouTube Shorts Amid Senate TikTok Ban

While the US President, Joe Biden, has yet to sign the bill to ban TikTok, he has already pledged he will do so. The company has around six months to decide on whether to sell or take its services outside the United States.

The two platforms that will receive the advertisers that will no longer be able to promote their products and services in TikTok are Meta's Instagram Reels and YouTube Shorts.

TikTok is planning to exercise its legal rights to prevent the looming ban, but once the President signs in on it, the company will be forced to leave the US. While the US has previously contemplated such a ban, the current momentum in the legislation is greater than the previous efforts.

A Reuters report noted that advertisers are now keeping track of the developments. One digital marketing firm has already confirmed that it is considering other platforms in case TikTok fails to bow down to the pressure levied by the US government.

However, some are relying on a more conserved approach and are choosing to retain normal operations on TikTok. According to some advertisers, TikTok has faced past criticism from US legislatures and emerged as the winner.

In 2020, the former US President, Donald Trump, imposed an executive order to ban the platform from the US. However, the ban did not go through.

While there is some optimism that TikTok might continue operating in the US, the recent Senate action might affect advertising revenue on the platform. Companies tend to plan their advertising budgets months in advance. Those nearing the renewal of their marketing campaigns might have to hold off and await what will happen.

Sale, Not Ban, Is More Likely

TikTok is expected to generate $8.66 billion in US ad revenue in 2024, pointing towards a large number of advertisers on the platform. The sheer size of its share in the advertising market makes a ban less likely. Therefore, a sale might be in play.

While platforms such as Reels and Shorts exist, there is no guarantee that advertisers will turn to these platforms. TikTok offers different features than Reels and Shorts, which influences advertiser choices.

TikTok CEO Calls US Legislatures Action Disappointing"

The CEO of TikTok, Shou Zi Chew, has responded to the recent Senate action saying it was disappointing." The executive also said that the company was considering taking legal action, indicating that the company is not planning to shut down US operations without a fight.

Our CEO Shou Chew's response to the TikTok ban bill: pic.twitter.com/7AnDYOLD96

- TikTok Policy (@TikTokPolicy) March 13, 2024

Chew also expressed his displeasure with the bill, saying the goal was to remove TikTok from the US. He also outlined some effects of the ban including taking revenues from creators.

This bill gives more power to a handful of other social media companies," Chew said. It will also take billions of dollars out of the pockets of creators and small businesses. It will put more than 300,000 American jobs at risk and it will take away your TikTok."

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