Advertisers remain committed to investing in TikTok, drawn by its significant user engagement, despite ongoing discussions about a potential ban in the U.S. due to national security issues, according to advertising experts.
This commitment comes as TikTok, owned by the Chinese company ByteDance, strives to prevent a ban in the U.S. following the proposal of a bill by lawmakers that would give President Joe Biden’s administration the power to ban apps deemed security threats. The app has already faced bans on government-issued devices in various countries.
As part of the annual NewFronts event, TikTok is set to hold a presentation for advertisers in New York on Thursday evening. This event showcases new content and features from social media and streaming platforms aimed at marketers.
Despite raising concerns about its Chinese ownership, TikTok’s advertising revenue is projected to grow by 36 percent, reaching approximately $6.83 billion (around Rs. 55,800 crore) this year, as reported by the research firm Insider Intelligence.
Ryan Detert, CEO of the influencer marketing company Influential, noted that none of his firm’s clients have expressed a desire to cut their spending on TikTok. He remarked, “There’s no contagion that we’re seeing,” highlighting Influential’s collaboration with notable brands like Pepsi and the NFL.
Two media buyers from separate major advertising agencies informed Reuters that the scrutiny from Washington has not yet influenced their clients’ strategies regarding TikTok. Both media buyers preferred to remain anonymous due to the nature of their relationships with the platform.
During its Thursday presentation, TikTok is expected to unveil a new advertising format that will allow brands to place ads alongside content from publishers such as BuzzFeed, Dotdash Meredith, and NBCUniversal, with the creators set to receive 50 percent of the ad revenue.
“TikTok is irreplaceable unless and until advertisers have to replace it,” stated Mark DiMassimo, founder of creative agency DiMassimo Goldstein, which has partnered with brands like Hello Fresh and Samsung.
However, many media buyers acknowledged that the impending threat of a U.S. ban will be an unavoidable topic during the advertiser presentation.
On Tuesday, TikTok announced that its head of U.S. trust and safety would depart the company next week, creating uncertainty as the app loses a key executive responsible for overseeing content moderation and managing safety tools associated with U.S. user data.
“There’s a lot of uncertainty combined with general unpredictability in the economy,” commented Stephani Estes, chief media officer at digital marketing agency Goodway Group. “You have to consider the what-ifs.”
TikTok expressed its commitment to addressing advertiser concerns through “open, fact-based, and ongoing dialogue.”
© Thomson Reuters 2023
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
