After years of attempts to ban the use of TikTok in the United States, President Biden recently signed into law legislation that gives Chinese parent company ByteDance nine months to divest from TikTok or face a nationwide ban of the app. This move comes amid concerns that Chinese authorities could force ByteDance to hand over sensitive personal data of more than 170 million Americans who use TikTok.
For marketers and brands who use TikTok as an integral piece of their marketing strategies, this development raises key questions on the potential impacts. Here’s a breakdown of what a ban could mean for marketers.
Is the TikTok ban official?
TikTok has already countered by suing the U.S. government, claiming that the law violates Americans’ first amendment right to free speech. These legal challenges could take months or years to resolve, which could significantly delay a final decision. If the law stands, they would be forced to sell at least 40% of the company to a U.S.-approved entity or investment group. However, ByteDance has already said it has no plans to sell TikTok. Other obstacles such as potential Chinese government intervention and TikTok’s high valuation could also complicate a future sale.
When will the TikTok ban go into effect?
If the law is not overturned and a sale does not occur, the TikTok ban would go into effect 270 days (nine months) from President Biden’s signing, likely on January 19, 2025. President Biden could grant a one-time 90-day extension if he determines progress toward a sale has been made, setting a potential sell-or-ban date of April 19, 2025.
How would the TikTok ban impact user activity?
A survey by MGH suggests that a TikTok ban could lead 60% of users to start using Instagram Reels regularly, while 52% might shift to YouTube Shorts. Additionally, an eMarketer report predicts increased time spent with streaming TV and audio platforms in the absence of social media platform.
How would the TikTok ban impact advertising?
Meta (formerly Facebook) hopes to capitalize on a ban by attracting advertisers to its platforms, particularly Instagram and Threads. In fact, Threads is already in the process of adding highly demanded user features, like interactive reactions and format types, to appeal to more users. Meta ad execs also announced they will be offering ads on Threads in the second half of 2024. Meta is estimated to gain anywhere from 22% to 27% of TikTok’s projected ad revenues, while YouTube stands to gain as much as $1.54 billion.
What should marketers do if the law is blocked in court?
If the law is blocked, marketers should proceed with caution. Continue to invest in TikTok if it’s a successful channel for your brand or has the potential to be. However, with the heightened concern over privacy, marketers should take extra steps to ensure your brand’s collected data is compliant with national and state privacy laws.
What should marketers do if TikTok is sold?
If TikTok is sold, marketers should expect changes and develop a balanced plan across social platforms with similar creative and outcomes like TikTok, Instagram, and YouTube Shorts. It’s also wise to increase your Meta ad dollars and align the optimization goal of the campaign to your brand’s KPIs. We recommend testing into YouTube Shorts to capitalize on the vertical video format and link to long-form content.
What should marketers do if TikTok is banned?
If TikTok is banned, marketers should plan to repurpose successful TikTok content for Instagram Reels and YouTube Shorts. As algorithms have already moved to promoting content with a lot of engagement, it will be important for marketers to build creative assets and captions that have a strong call-to-action for users to comment, share, save, or like.
We will likely see Meta and YouTube CPMs increase as more advertisers reallocate budget into those channels, so marketers should expect their dollars to not go as far. Consider reallocating media budgets to streaming TV, streaming audio and other forms of entertainment that appeal to younger demographics as time spent on these channels would increase.
A potential TikTok ban could have significant implications for marketers and Ansira will continue to provide updates as they become available. Looking to have a backup plan in place? Contact us today to learn how we can help you navigate these changes and create a balanced marketing and advertising plan.
