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How The TikTok Ban Is Impacting Advertising

Advertisers and marketers worldwide are wondering how the TikTok ban is impacting advertising and how they can salvage the market. The news of a potential ban on TikTok is spreading like wildfire, and all states in the US might ban TikTok this year.

It does not only translate to losing $6 billion in advertising in 2023 but also a huge platform many businesses use religiously. Advertisers believe this will also lead to higher competition on other social media platforms resulting in a higher ad spend.

The news of TikTok getting banned has been in the air since 2020 when the US President of that time, Donald Trump, warned about banning TikTok unless an American company buys its US operations.

However, the matter has escalated with time, and many US Federal and state departments have been directed to uninstall the application.

This brief article tells you everything about TikTok in advertising and how the TikTok ban is impacting advertising. Let’s dive in!

TikTok in Advertising

TikTok is one of the most popular platforms for entertainment and digital marketing. It allows users to create and watch short videos with interesting effects and popular music choices.

By March 2023, TikTok had 1 billion monthly active users. It started as the app Musicly.ly in 2014, which allowed content creators to record videos on music. In 2016, ByteDance launched Douyin in China, later reaching 150 different markets in 2018 as “TikTok.”

The short video format became immensely popular and addictive among users, especially during the Covid-19 pandemic. Eventually, digital marketers and advertisers had to surrender to the popularity of this social media platform to use it for advertising. Almost one-fifth of internet users use TikTok, which has about 2.3% market share of digital advertising worldwide.

41% of TikTok users are between age 16 and 24, while the rest 59% constitute Millenials, GenX, and Baby Boomers, allowing you to reach audiences of all ages. Moreover, TikTok offers affordable advertisement campaigns to bring your product to a wider customer pool.

People trust the brands on TikTok whether they advertised through their accounts or opted for influencer marketing. Hashtags like #TikTokMadeMeBuyIt were incredibly helpful to brands for advertising.

However, businesses in many parts of the world might not be able to use this giant in the future to reach their target audience.

TikTok Ban

Despite the app’s worldwide popularity, the potential data breach and leak risks have led to the application’s ban in numerous countries globally. Before we talk about how the TikTok ban is impacting advertising, it is important to understand the reason behind the ban.

USA and India expressed concern regarding data breaches in 2020 as every big Chinese company has an internal cell answerable to the ruling Chinese Communist Party. Thus, it enables the Chinese government to obtain personal data from TikTok users and use it to spy on other countries.

It is not only TikTok that provides sensitive information to the Chinese government; many other application manufacturers do the same.

Why is the US Banning TikTok?

US lawmakers have considered banning TikTok since 2020, but the crackdown has fastened in the past few months.

FBI Director Christopher Wray mentioned that TikTok reaches over half of the adults in the US, allowing the Chinese government to obtain a massive population. TikTok poses a huge risk by collecting data and controlling the algorithm to influence users.

The Senate Intelligence Committee has sent letters to Apple and Google to remove the app from Play Store and App Store. The US government also banned downloading and accessing TikTok on US government devices, including the US military. So, the Federal US government has banned TikTok, including many states.

Montana is the first state to ban TikTok, followed by Alabama, Georgia, Idaho, Iowa, Maryland, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, South Carolina, Tennessee, Texas, Utah, and Virginia; the list is expected to expand with a nationwide ban on the app.

Many other countries, including the UK, France, Australia, Netherlands, Norway, Denmark, New Zealand, and Canada, have also banned the app.

What does TikTok Say about the Ban?

The company has been quite unhappy with various countries banning the application without discussing it. TikTok spokesperson Brooke Oberwetter mentioned, “The US’s decision to ban the app without consulting the company prompted its allies to take the same steps.”

However, ByteDance employees were found tracking US-based journalists through their TikTok data; TikTok has always denied the allegations by US officials and called it an “egregious misuse.” The spokespersons also stated that these employees no longer work with the company.

A TikTok representative also criticized the Canadian government for banning the app without discussing it with the company. He said, “No one from the Canadian government met with the company to discuss a compromise, and that the company is disappointed in the Canadian government’s decision.” The company responded to the European ban similarly by calling it a “self-defeating step.”

How TikTok Ban Will Affect Businesses

The response to the TikTok ban regarding its effect on businesses is mixed because of platform preference differences among advertisers. Yet, 93% of marketers say that producing short-form video content is valuable to their company, and 82% believe that a ban on TikTok will impact achieving their marketing and advertising objectives.

Considering the impact on business revenues by the TikTok ban, 56% of marketers also think it is unlikely for the federal government to ban TikTok in the US.

Impact of a TikTok Ban on Advertisers

Now that many states in the US and some other countries have banned TikTok, advertisers will lose one of the most popular digital marketing and advertising platforms. Brands reached hundreds and thousands of potential customers through TikTok before the ban.

Here’s how the TikTok ban is impacting advertising:

Low Reach

Advertisers could reach a billion active users on TikTok monthly, targeting massive potential leads even through segmented targeting.

However, with TikTok getting banned, companies that have spent significant capital on bringing their brand to the limelight on the platform might hit a low. It helped brands reach multiple generations, including Gen Z, Gen X, Millennials, and even Baby Boomers. Following the TikTok ban, low reach and engagement will birth new challenges for advertisers.

High Competition

TikTok scattered the competition as many creative and non-mainstream companies chose TikTok as their primary marketing and advertising platform. It allowed other brands to engage audiences on Facebook, Instagram, Twitter, etc., without major competitors.

As TikTok leaves the US advertisement market, these brands will eventually return to these platforms, leading to higher competition.

Increased Ad Spent

While an increased ad spend benefits all players in the digital advertising space, it is not the best choice for advertisers. No one wants to pay more to get the results. But the increasing competition on social media platforms will leave no other option for advertisers. They will need to spend more money to drive the required results.

But there’s a silver lining…

TikTok getting banned might benefit companies who have already built a brand presence on other mainstream social media platforms. If you have been giving time to Instagram content and other platforms besides TikTok, you do not have to worry much about how the TikTok ban is impacting advertising!

How to Fight the TikTok Ban?

While advertisers are not very happy with the ban on TikTok, it is inevitable. However, you can use the available resources to design a targeted and result-oriented digital advertising strategy in light of the possible TikTok ban. Here’s what to do if you majorly rely on TikTok:

Find the Right Platform

Over five million businesses use TikTok to interact with their target audience because of its user base. But the ban is pushing them to find see which other platforms are a favorite among their buyer personas. What works for another brand might not fit yours.

Use demographic information, market research, and tools to pick the right social media platform for your company. Involve your customer service and sales teams to get better insights about the platforms the customers connect through.

See What Each Platform Offers

Social media marketers and advertisers use all platforms to advertise their products, yet each forum has unique features.

You can build your brand on another social media platform when you know everything about it. Research about each platform and the opportunities it offers for your company. Does it have features that you usually use? is it affordable easily in your budget? Think if you can provide content similar to what users liked on TikTok.

Pay Attention to Customer Interaction

The most important thing is to realize how customers interact on a particular platform. It will require testing, but you will get your answers soon.

Every platform has a diverse yet specific audience that likes how that social media platform works. For example, Instagram users like photos and reels, while YouTube users prefer long-form videos. Study your target customers and pick a platform that meets their needs.

The Bottom Line

When we talk about how the TikTok ban is impacting advertising, we cannot overlook its effect on many businesses that use it as the primary advertising platform. However, it is not the first time the advertisement industry is facing this problem. MySpace, Google+, and many more had good and bad days; eventually, advertising was on its feet again on another platform.

This ban will bring more opportunities for other digital advertising platforms. 61% of marketers mention moving to an alternative social media platform. Though migration to other platforms will increase competition and ad spent, brands will not have the user reach and engagement from TikTok.

It might be challenging for some brands to cope with the change, but you can start now to catch the pace. Shift to alternative platforms slowly and build a brand presence there; it will help you even if TikTok stays.

FAQs

How does TikTok impact advertising?

Around one-fifth of the global population uses TikTok, enabling advertisers to reach a massive pool of potential customers. This short-video platform has become a favorite, especially among unorthodox businesses. Projections show that TikTok ad revenue will reach $44 billion by 2027 from $13 billion in 2022.

What are the implications of TikTok ban?

Banning TikTok will make it difficult for TikTok-based businesses to advertise their businesses. It will allow competitors to be back in the game. At the same time, it will have negative implications, including layoffs and increased ad spend.

Did TikTok increase ads?

TikTok did not only attract advertisers during the pandemic but also after the possible ban announcement. Marketers and advertisers are still actively using the platform to advertise their brands amidst ban speculations.

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