TikTok advertising strong despite threat of ban
Christopher Hutton
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Major brands are increasing spending on TikTok advertising despite the threat of the United States banning the app.
Advertising on TikTok grew by 11% in March, according to data provided by the app analytics group Sensor Tower. Pepsi, DoorDash, Amazon, and Apple were among the major brands advertising.
The ad spending growth suggests a lack of fear among advertisers that the popular app will stop operating soon. TikTok faces the risk of a ban from the Biden administration and Congress over its connections to China and its handling of data collection in the U.S., but advertising agencies are not too concerned.
“There’s unlikely to be an executive order resulting in an immediate ban that would impact advertisers,” Joshua Lowcock, chief media officer of UM Worldwide, told Financial Times. “Even with bipartisan support, the legislative process will be protracted — giving marketers ample time to plan alternative strategies.”
RESTRICT ACT AUTHORS BLAME TIKTOK FOR ATTACKS ON PROPOSED RESTRICTIONS
While the odds of a TikTok ban passing soon is low, advertisers have still begun preparing contingency plans for if and when the app is banned. For example, some intend to move spending from TikTok to rival platforms such as Facebook or YouTube upon the app’s ban.
Advertising is currently TikTok’s primary source of revenue. The U.S. was projected to account for $5.96 billion of the company’s ad revenue in 2022.
The leading option for cracking down on TikTok is the RESTRICT Act introduced by Sens. John Thune (R-SD) and Mark Warner (D-VA), which would give the Commerce Department additional powers to regulate tech business deals related to nations of concern, such as China or Iran. The bill has been slammed on the Left and Right as infringing on free speech.
Sens. Marco Rubio (R-FL) and Josh Hawley (R-MO) have proposed outright bans of TikTok over its data collection practices and relationship with the Chinese Communist Party.
A small group of Democrats has come out as defenders of the app. Reps. Alexandria Ocasio-Cortez, Ilhan Omar, and Jamaal Bowman have spoken out against a straight ban on TikTok.
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TikTok CEO Shou Zi Chew appeared before Congress two weeks ago. Lawmakers on both sides questioned the Singapore-based executive over the company’s practices.