The U.S. government is threatening to ban TikTok within the country if ByteDance, its China-based owner, refuses to sell. The lack of the hugely popular social media platform could mean big changes for brands’ influencer marketing within the United States.
Status of the law. Last month President Biden signed a law requiring TikTok to be sold inside nine months or be banned within the U.S. ByteDance has repeatedly said it would not sell, and the Chinese government said TikTok’s key asset — the algorithm it runs on — can’t be moved outside China. Last week the corporate filed suit in federal court to dam the ban. Given the resources of either side, a court case would likely be a very long, drawn-out affair.
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TikTok’s reach within the U.S. In February of last 12 months, TikTok said it had 150 million monthly energetic users within the U.S., up from 100 million reported in August 2020. An evaluation by digital consultants Kepios suggests that TikTok has a 53.9% adult reach rate within the U.S. According to eMarketer, 45.3% of social media users within the U.S. use it not less than once a month.
This 12 months TikTok will get 3.5% of all the cash spent within the U.S. on digital promoting, in response to Statista. Worldwide nearly 30,000 corporations advertised over 35,000 brands on TikTok during 2023. Companies spent a median of $954 million per quarter and $318 million per 30 days.
What happens if it goes away
Influencers, especially those totally on TikTok, would see the most important disruption. They would lose access to the audience there which implies they would also lose income. However, while TikTok is a highly regarded channel, especially with Gen Z, it is barely one among several available to influencers. So a ban would force a strategic shift on influencers and certain slow their audience growth.
Michael Jaconi, CEO and founding father of Button, a mobile commerce optimization platform, said that the primary impact would be a migration of users, influencers and ad spending to other existing platforms.
“The influencers at the highest of the market even have a large variety of followers on Instagram, on YouTube, on other platforms,” he told MarTech. “And so the likely initial final result here is that you simply’ll see dispersion to those other platforms that they’re using today.”
Benefits of a multi-channel strategy
The same is true for advertisers.
“The brands are mature and know they’ll’t just be on TikTok. They also must be on Facebook, Instagram, X, the entire platforms,” Susan Ganeshan, CMO of Emplifi, a customer engagement platform, told MarTech. “They’re multichannel and really effectively follow the no-silver-bullet rule, and would experience a little disruption, but would move on to the opposite platforms they’ll work with.”
The fact is TikTok’s users won’t vanish if the app is banned, they’ll just go elsewhere.
“With the audience migration, you’ll see a form of leveling of the water level here, were the ban to take effect,” said Jaconi. “The tools themselves within the format, there could also be some adjustments. Is Reels the exact same as a TikTok short-form video? Not at once. And so perhaps there’ll be some tweaks and changes to the creative formats themselves.”
Who may profit from a ban
Jaconi believes a ban may very well be excellent news for other social media platforms which have had trouble gaining traction.
“The primary beneficiaries within the short term will likely be the platforms which can be on the market today,” he said. “I don’t think it’ll be a revival of platforms that aren’t getting used today currently, so I don’t think that is the lifeboat for, like, MySpace. It will likely be interesting to regulate a few of the alternatives to TikTok which were unable to do user acquisition and growth due to the presence of this very large and really well-designed app.”
Brands would need to regulate their marketing strategies — especially in the event that they’re focused on Gen Z — to account for what they lose without TikTok.
“For the organizations that we have now in our portfolio who’re really energetic on TikTok there’s roughly 10 influencers potentially doing posts on their behalf,” said Ganeshan. “So they would lose people who magnification of the ten.”
The next big thing may get here faster
TikTok’s disappearance could speed the emergence of social media’s Next Big Thing.
“There will likely be something that comes into the content platform space relatively soon, whether that’s one 12 months, whether it’s an AI-based tool or a VR-based tool,” said Jaconi. “This could make the chance to speed up that or open the chance within the space for that to occur faster than it could have, without a ban.”
Currently, the most important beneficiary of a ban could also be TikTok itself, said Ganeshan.
“Look at engagement rates for our clients on TikTok and, despite the ban coming, engagement rates on those posts are literally ticking up,” she said. “Brands aren’t walking away from it. They know they still must be there, they are literally seeing some goodness within the engagement rates going up.”
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