TikTok has only been around for less than a decade, yet it has captured the hearts of 150 million users in the US alone, making the looming news of the US TikTok ban send ripples through its community. The ease with which TikTok was adopted raises the question: will it be as easy to move on from it? With growing concerns, brands must peer into the horizon and consider the possibilities ahead in the wake of this recent development.
Shifting Social Media Ad Strategies with News of the US TikTok Ban
TikTok has solidified its position as a leading platform for short-form videos, becoming the platform of choice for almost 5 million large and small businesses looking to grow and succeed. The financial metrics underscore its significance, with TikTok’s ad revenues reaching $8.75 billion in 2023, and projections indicating a 25.8% growth in 2024.
Despite the potential challenges on the horizon, it seems that the concerns primarily stem from lawmakers, attributed to their limited understanding of the technology, rather than from the US audience, which has shown remarkable composure. While significant and deserving of attention, the situation presents an opportunity for us to prepare you for the forthcoming shift while maintaining TikTok as an essential component of your marketing strategy.
The Uncertain Waters of TikTok’s Future
It all started in 2020 when former US President Donald Trump viewed the app as a national security threat and announced that the government was considering banning the app. Fast forward to March 13, 2024, when the Senate passed the bill approving the legislation that forces TikTok to sell ownership from a Chinese-owned company to a United States-owned one.
Despite not being a wholly foreign-owned enterprise (WFOE), ByteDance has a diverse ownership structure: 60% by global investors, including those from the U.S., 20% by its Chinese co-founders, and 20% by its employees, which includes thousands in the U.S.
What the Media is Talking About
Despite ongoing discussions and legislative actions in the works for months, TikTok’s popularity remains strong. However, the threat of a ban is a real possibility. This raises important questions for advertisers about adapting and preparing for a future that might see TikTok’s operations drastically changed.
What Does the Bill to Ban TikTok Mean for Future Campaigns?
The potential ban of TikTok in the United States, should it retain its affiliation with ByteDance, its Chinese parent company, presents a complex scenario for advertisers utilizing the platform. Here, we examine what such a scenario could mean for advertisers who utilize TikTok:
Reach and Targeting Challenges
Accessibility of Digital Assets on TikTok
Budget Allocation Concerns
A primary consequence of the ban would be the immediate loss of the US audience demographic. Advertisers who have been targeting American users might find themselves asking, “Why can’t I target USA on TikTok ads?”
The answer lies in the unavailability of TikTok within the United States, compelling those who wish to reach American consumers to pivot towards TikTok local ads.
Another significant hurdle would be accessing the digital assets you have uploaded on TikTok, including videos, music, and your TikTok shop. Although TikTok has tried to store US user data within domestic data centers in Northern Virginia and Hillsboro, these measures may not suffice in granting access to these assets post-ban.
The legislative journey towards potentially banning TikTok, stretching over three years, has yet to incite widespread concern among advertisers regarding their ad budget allocations on the platform.
For those who have already earmarked their 2024 budgets and are apprehensive about an abrupt ban, it appears there is no immediate risk. Nevertheless, advertisers should remain cautious and flexible with their budget planning, particularly for 2024’s Q3 and Q4.
How Can TikTok Advertisers Adapt to the Change?
In the face of TikTok’s uncertain future, particularly concerning its availability in the US market, local and international advertisers must proactively adjust their strategies. Below are key strategies to address the aforementioned issues that we discussed:
Adjusting your Audience Targeting Strategy
If the United States is no longer available for targeting, you can adjust your location targeting settings within TikTok Ads Manager. This is particularly useful for international brands, ensuring that budgets are not wasted on an unavailable US audience.
Alternatively, you can identify countries with significant US/American tourist populations as alternative targets. This approach helps maintain engagement with American users indirectly, for example, through their top travel destinations. For instance, the top 5 American travel destinations in 2023 that can be targeted on TikTok are Mexico, the UK*, Philippines, France, Japan, and Italy.
* Targeting the United Kingdom (GB) is only available for managed accounts in Australia (AU).
Safeguarding Digital Assets
In anticipation of TikTok assets potentially becoming inaccessible, consider migrating them to alternative platforms like Meta and YouTube. Expanding to these platforms secures your assets and opens up new avenues for short-form video advertising.
Keep producing vertical, short-form content to align with your audience’s established viewing habits and preferences, ensuring a consistent user experience across platforms.
Budgetary Considerations and Planning
Anticipate potential changes by formulating a plan that includes TikTok but also consider a strategic reallocation of your advertising budget towards alternative platforms in anticipation of a US ban.
For instance, in planning a Super Bowl 2025 campaign where TikTok is a primary channel, consider reducing its budget while increasing allocations for Meta and YouTube, based on overlapping demographics and proven effectiveness. Here’s an example:
This strategy involves adjusting the advertising budget, initially allocating 50% to TikTok in Q3 2024, then reducing it to 40% by Q4 2024. To address anticipated changes proactively, the plan includes further decreasing the TikTok budget to 25% by Q1 2025. The funds saved from this reduction will be shifted towards YouTube advertising, capitalizing on its Shorts feature, which closely mirrors the short-form video format popularized by TikTok.
By proactively adjusting audience targeting settings, migrating digital assets, and reevaluating budget allocations, you can stay ahead and maintain your brand’s advertising strategies with minimal disruption.
What Opportunities Lie Ahead for TikTok Advertisers Amidst Uncertainty?
With the potential US TikTok ban on the horizon, it’s evident that adaptability is key. The risk of TikTok becoming inaccessible overnight highlights the critical need for proactive planning and strategic foresight. Being caught off-guard by TikTok’s potential exit from the US market could significantly impact your advertising efforts. Still, with the right tools, you can turn these challenges into opportunities for growth and innovation.
Collaborating with an advertising partner capable of navigating these uncertainties is crucial. Our experienced team offers essential insights for expanding your advertising to other platforms, preparing you for any outcome of the TikTok situation. Arrange a consultation with us to explore how your advertising strategies can continue to thrive.
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