Advertisers with ‘hair on fire’ brace for US TikTok ban By Reuters

By Kathy Paul

NEW YORK – Advertisers who rely on TikTok as a key digital marketing tool rushed to prepare contingency plans this week as it appeared to many that the popular Chinese social media app may not survive until the US ban takes effect on Sunday.

One marketing executive described it as a “hair on fire” moment for the advertising world, after months of conventional wisdom saying the solution would be to get the short video app up and running.

“It seemed unbelievable even just a few weeks ago that there wouldn’t be a TikTok,” said Kerry Pearse, founder of marketing firm Influence & Inspire Consulting and former head of social media at Omnicom Group (NYSE: ). OMD news agency.

“We all thought that any access issues to the TikTok app would be slow and drawn out,” he said.

Chinese tech company ByteDance faces a Jan. 19 deadline to sell TikTok’s US assets or accept an unprecedented ban on the app used by 170 million Americans on national security grounds.

TikTok plans to shut down the app’s US operations on Sunday, barring a last-minute delay, Reuters reported on Wednesday.

US President-elect Donald Trump’s national security adviser said the new administration plans to take action to “keep TikTok out of the dark,” but it was not immediately clear whether Trump, who takes office on Monday, can legally do so. to do

“I think after a long time of feeling like this is a ‘boy crying wolf’ situation, we may actually be seeing a wolf,” said Craig Atkinson, CEO of digital marketing agency Code3.

If the ban goes through, marketing group WARC Media predicts it will cost more than $11 billion in annual U.S. ad spending.

Most of that spending is likely to go to platforms where advertisers are already established and running short video ad campaigns, primarily Meta’s Instagram and Alphabet’s (NASDAQ:) YouTube Shorts, advertising companies told Reuters. four sources of agency.

TikTok employees appeared to be in the dark about exactly what would happen to the app as of Sunday, the sources said, although two of the sources said TikTok offers favorable compensation terms when event services are interrupted in the middle of advertiser campaigns. TikTok did not immediately respond to a request for comment.

Even as the ban loomed, the company continued to offer advertisers new features, such as a tool it launched in pilot form on Thursday that will make it easier to create, modify and add more ads, according to an email described to Reuters this week.

It also planned to set up a booth at next week’s World Economic Forum meeting of political and business leaders in Davos, Switzerland, after hosting cocktails at the Consumer Electronics Show in Las Vegas earlier this month.

Meanwhile, brands and content creators have been downloading their data en masse in case the app goes down as of Sunday, hoping to salvage at least some of the fruits of their labor.

One influencer, who showcases cereal and beauty products in her videos, posted on Tuesday with advice to her nearly 16,000 followers on how to save their videos.

“Here’s how to download your TikTok data so you don’t lose literally everything you’ve had for the past five years,” said Maria Slate, grimacing as the words “okay, I’m okay” flashed over her head.

The mood was a marked shift from the sentiment that prevailed last month, when advertisers told Reuters they were in no rush to shift their marketing budgets away from TikTok despite a US appeals court upholding a law requiring divestment or a ban.

As of Jan. 8, TikTok’s ad spending is set to grow 57% in the first two months of 2025, according to Guideline.ai, a research firm that tracks booking data from major ad agencies.

TikTok has become a powerful tool for advertisers looking to reach young Americans in particular in recent years, growing to 20% of US social media ad spending from just 2% in 2020, its first full year of activity in the US. Guideline.ai said:

Part of that strength has come from the platform’s cultivation of influencers and an online shopping culture that has made it a reliable e-commerce sales engine.

E-Marketer, another research firm, predicted late last year that 43.8% of US TikTok users would make purchases on the platform by the end of 2024, a larger share than Meta. owned services Facebook (NASDAQ:) and Instagram. .