Marketers are concerned about TikTok's 'sell or ban' bill. But most people aren't too panicked about the outcome, at least not yet.
The U.S. Senate on Tuesday passed a bill (79 votes to 18) that would ban TikTok in the United States if owner ByteDance does not sell its stake within nine to 12 months. This is an amendment to an earlier bill approved by the House of Representatives that gave ByteDance 165 days to sell TikTok. The new bill, linked to a $95 billion foreign aid package, includes $60 billion for Ukraine, $17 billion for Israeli weapons and $9 billion for Gaza. TikTok's participation falls under the Protection of Americans' Data from Foreign Enemies Act of 2024, which gives ByteDance 270 days to sell the company. President Biden signed it yesterday.
In response to Digiday's request for comment, a TikTok spokesperson said: “This unconstitutional law bans TikTok, and we intend to challenge it in court.” We believe that the facts and the law are clearly on our side and that in the end we will prevail. In fact, we have invested billions of dollars to keep America's data safe and protect our platforms from outside influence and manipulation. This ban would destroy 7 million businesses and silence 170 million Americans. We will continue to challenge this unconstitutional ban and invest and innovate to ensure TikTok remains a space where Americans from all walks of life can safely share experiences, find joy, and find inspiration. I will continue. ”
While TikTok users, creators, and agencies are sounding the alarm over the move, one group isn't paying attention. It's a marketer. Shray Joshi, founder and CEO of Good Peeps, is one of them. As he pointed out, big companies will simply shift their advertising dollars back to Meta and Google. So, for some marketers he TikTok plays an important role, but it is not irreplaceable. In many cases, it's not a big expense for them. The platform has not yet attracted investment that exceeds the experimental budget in most cases.
“If TikTok is banned, attention will shift back to those alternative platforms and media costs will come down,” Joshi said. “As more people use meta and Google again, CPMs will go down. And if that actually happens, I think marketers will see better performance across channels.”
This is a view shared by Baruch Labunski, founder of Rank Secure, a TikTok-first agency and Google partner.
“A potential ban on TikTok is not a major concern for us,” he said. “If a ban were to occur, our contingency plans include reallocating TikTok's budget primarily to Google,” he said, adding that Rank Secure's customers would It added that it is actively engaged across multiple platforms, including Meta and Snapchat. As it stands, Labunski's client's social mix consists of 50% Google, 20% each from Meta and TikTok, and the remaining 10% from his Snapchat.
In fact, marketers are clear that this bill feels more authentic than previous failed attempts. That's why many people started making contingency plans when the first TikTok bill passed the U.S. House of Representatives last month. But Michael Beckerman, TikTok's head of public policy for the Americas, sent a memo to staff stating that if the bill is signed, the platform will take the matter to court and extends the deadline for the sale. Considering that no one seems convinced (yet) that a complete ban will be in place soon.
“If that happens, there are too many political and corporate implications,” Labunsky added. “However, we anticipate potential investigations and regulatory action.”
The same goes for Yuriy Boykiv, CEO of Front Row Group, a 360-degree e-commerce growth agency that has been helping brands with their TikTok shop strategies.
“Our clients are operating on the assumption that someone will buy TikTok and this problem will be resolved,” he said. “Even if no one buys the app, TikTok isn't going away any time soon. And even if it eventually disappears completely, the demand for vertical video platforms will never go away.”
That being said, if a complete ban were to actually take place in the United States, it would be small businesses that would be most affected.
“Many small businesses have spent days, hours, even years cultivating their community and will likely have to start from scratch with another short-form platform,” Joshi said. . “TikTok was probably too expensive for these small businesses to play the advertising game (lower CPMs but lower conversion rates than Meta and Google), but TikTok's For You page stands out in its ability to tell their story for free. He played a powerful role.”
But it's a change that marketers can almost always manage to pull off without disrupting their business in the process. That's the thing about TikTok. It's not a must-have addition to a good media plan. But that doesn't mean there isn't a big advertising business. Frankly speaking, it is. But there are still many marketers who aren't convinced that's the place to spend significant ad dollars, especially when both Meta and YouTube have their own options for Reels, Stories, and Shorts. The lack of enthusiasm for TikTok compounds a more existential question. Short-form videos aren't necessarily as easy to monetize as longer videos like YouTube and Meta. That's why TikTok is ramping up its efforts to diversify its revenue in the shopping and shopping space. search.
Because of TikTok's short length, “you can't place mid-roll or pre-roll ads,” says Jamie Ray, founder and CEO of Buttermilk, comparing the ease of placing ads on TikTok. said. For example, long-form YouTube videos. “Obviously from an advertising revenue perspective, [short form] Platforms are also limited. ”
