TikTok's day of reckoning arrives, but marketers appear to hold fast on the platform
TikTok, the controversial video-sharing app owned by Chinese tech conglomerate ByteDance, is expected to be officially banned in the U.S. as of today, per an executive order issued by President Donald Trump in August. The White House views the platform as a threat to national security, charging it could share sensitive information on U.S. consumers with Chinese authorities — an allegation TikTok fiercely contests, including through a lawsuit against the government.
But while the deadline for TikTok to secure a sale that could preserve its business in a key market is finally here, one would be hard-pressed to tell the platform is facing an existential crisis on the surface. Marketing Dive easily downloaded and accessed TikTok from the Apple App Store Thursday morning, and marketers, too, appear to be holding fast with their efforts on the app.
“TikTok has continued to grow and thrive through multiple past ‘deadlines,’ and we believe we’ll see that again now,” Evan Horowitz, chief executive at Movers+Shakers, an agency that develops TikTok campaigns for brands like e.l.f. Cosmetics and NYX, said over email. “All of our clients are moving full speed ahead with their TikTok campaigns and TikTok channels.”
Even TikTok seems perplexed by the state of affairs, The Verge reported. ByteDance and TikTok on Wednesday filed a petition in the U.S. Court of Appeals claiming they’ve stopped receiving communication in recent weeks from the Committee on Foreign Investment in the United States, the agency group reviewing the app’s business, after asking for a 30-day extension to iron out an agreement. The companies are hoping the appeals court grants them some additional lead time to work out a deal, as one tentatively cleared by Trump involving Oracle and Walmart taking on ownership of TikTok remains in flux pending the stamp of approval from Chinese officials, per Quartz. Additionally, the government still has until midnight tonight to issue an extension, Carl Tobias, a law professor at the University of Richmond, told Bloomberg.
Which is to say that marketers hoping Nov. 12 would bring some finality to the TikTok saga are likely to be disappointed, if they’re still paying careful attention to the months-long imbroglio at all.
“My suspicion is that most marketers will care more about brand safety from the perspective of inappropriate and offensive content than anything relating to accusations around national security,” Alex Bronwsell, media editor at the researcher WARC, said over email. “As long as TikTok offers mass scale and helps them to engage otherwise hard to reach consumers, advertisers will likely be content to ride the waves of any political controversy — until such a time, of course, that consumer sentiment sours in a meaningful or lasting way.”
No signs of slowing down
When President Trump first issued an executive order pressing ByteDance to divest TikTok’s U.S. business over the summer, it set off a mad scramble speculating over the fate of one of the most exciting and innovative apps to hit the market in years.
TikTok has experienced explosive growth and become a favorite of young consumers who are elusive on traditional media channels, an enviable position that’s been strengthened as social media usage continues to spike during the pandemic. Marketers have subsequently flocked to the platform in droves, while TikTok has built out a stronger advertising business, including by introducing its first global marketing platform over the summer. The app in recent weeks has signed extensive deals with Sony Music and the e-commerce platform Shopify.
Upward momentum for TikTok has been steady and strong enough that aggression from the White House has almost become a secondary consideration, as suggested by Brownsell. The Trump administration has also experienced some key setbacks.
An order that intended to prevent new downloads or software updates to TikTok starting Sept. 20 was blocked by Judge Carl Nichols of the U.S. District Court in Washington, ensuring the app could continue to acquire users and maintain its functionality. Then, late last month, a federal judge in Pennsylvania issued a separate injunction against restrictions against the app that were set to go into effect today, while not preventing the entire ban order from taking hold.
“There’s been some level of uncertainty about TikTok’s future for over a year now, and the demand for TikTok among marketers has grown exponentially,” Horowitz said, noting that his agency has recently signed blue-chip companies like Amazon and Disney to make their TikTok debuts.
The executive added that Movers+Shakers has “a big pipeline of launches” planned for the first quarter of next year as well.
‘Arbitrary and capricious’
In the petition to the U.S. Court of Appeals, TikTok and ByteDance described the Trump administration’s actions as “arbitrary and capricious” and pleaded with the court to review the situation and stop the forced divestiture of the app’s operations, per The Wall Street Journal.
If the White House remains as inattentive to the issue as the companies allege, and if the administration of projected president Biden is friendlier to Chinese businesses, it’s possible that TikTok will be able to land on sturdier footing in the months ahead, helping to enshrine its dominant status in the video app space. However, marketers should still be planning for any scenario, including an outright shutdown.
“Most U.S. marketers, in tandem with their agencies, will have put in place contingency plans in the event of a ban — while seeming unlikely, it won’t come as a total shock,” Brownsell said.
“We would expect most brands to redirect investment towards other platforms that can deliver youthful audiences, including Instagram, Snapchat and YouTube,” Brownsell added. “A temporary ban would allow advertisers to measure the contribution of TikTok to its marketing effectiveness, which is no bad thing. A longer ban, however, would result in further fragmentation of Gen Z audiences, making life harder for marketers chasing those audiences.”
