A US TikTok ban? What should advertisers do?

There may be no technology company currently under more scrutiny in the United States right now than TikTok. 

The hyper-popular app has seen explosive growth over the last few years, and currently boasts about 150 million users in the US (or about 45% of the population). That explosive growth, along with the fact that the company is a wholly owned subsidiary of the Chinese technology firm ByteDance, has drawn skeptical eyes from American politicians and regulators. 

The US Congress steps in

On March 23, TikTok CEO Shou Zi Chew testified before Congress regarding his company’s handling of US user data, and how easy it was for ByteDance (and the Chinese Communist Party) to gain access to said data. 

Amidst the hearing and throughout the halls of government, conversations are growing about a potential ban of the app. In fact, many observers viewed the hearing as quite hostile toward the platform’s CEO from both sides of the aisle. 

A bipartisan bill called the “Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act,” or the RESTRICT Act, has also been making its way through Congress. If eventually signed into law, it could give the US government the ability to ban TikTok and similar platforms. 

At the same time, in a show of good faith to skeptics, TikTok has been working with US technology firm Oracle to build a sort of isolated data handling system that would house all US user data. The effort, dubbed project Texas, would theoretically institute a kind of firewall between American data and foreign operators. 

What about the advertisers?

Overlooked in much of this conversation, though, are the brands and advertisers that are leveraging the platform to engage with audiences in the US and around the world - particularly with younger audiences like Generation Z. So how should advertisers view the platform, and should they be preparing for a ban of the app? 

To better understand the current best practices and how to view the situation, we spoke with Johan Lidner, lead generation manager at Keywordio, a Funnel Solution Partner, who advises clients on how to best utilize TikTok from an advertising perspective. 

For the sake of transparency, it should be noted that Keywordio are TikTok marketing partners. However, this gives them unique access to the platform’s management team in the Nordic region, and they are also able to provide client feedback directly to the platform, helping it to improve and grow. 

Growing pains of a popular platform

In Johan’s expert perspective, the scrutiny that TikTok is experiencing should be expected for such a successful technology firm. 

“If you think back a few years, Google and Facebook have also faced concerns from governments and privacy experts,” said Johan. “Now, it appears that it’s TikTok’s turn.”

Indeed, Google and Facebook have confronted scores of lawsuits around privacy concerns (and currently, potential antitrust violations). And yet, even when hit with huge fines or battling against restrictive legislation, these tech giants continue to be immensely profitable — driven in large part by their advertising businesses. 

The main advice: maintain the course

This past experience is part of the reason why Johan and the Keywordio team are advising advertisers to carry on as usual with their TikTok spend. In Johan’s perspective, it is highly unlikely that such a popular app will experience an outright ban, even a sale. 

“TikTok is a global company with its head office in Santa Monica, CA,” he said. “I don’t see how the US government will ban an American-headquartered business, despite their ties to a holding company in mainland China.”

In reality, Johan feels like the intense scrutiny may be leading to a case of the Streisand Effect, where the US government’s efforts to stop TikTok’s growth are only drawing more eyes and interest to it. 

“Even bad publicity is good publicity,” he said. “Over the past weeks and months, we’ve seen even more growth of the platform, which is another reason to continue advising our clients to maintain the current course when advertising on TikTok.”

TikTok cost advantages

Beyond the platform’s growth, the real benefit to advertisers is the cost of advertising versus the reach. Current cost-per-click rates for Facebook are around $1.84, while TikTok’s CPC is around $1.63. 

Facebook’s cost-per-thousand-impressions is also more expensive at $14.20 compared to just $10.50 for TikTok. And while Facebook may still hold the advantage on total users (and hence greatest potential reach), TikTok is quickly gaining ground. 

Additionally, TikTok is the platform of choice for the age demographic of choice for advertisers: younger adults, aged 18 to 34 years old. 

What makes an effective TikTok message?

The key to reach and resonate with that audience on TikTok, according to Johan, is to go native. Native advertising, that is. 

“You have to be native on TikTok,” he said. “You can’t just take a TV ad, crop it to fit a vertical format, and post it. You have to have your TikTok voice.” 

Johan also advises clients not to lump TikTok into other social media platforms from a strategic perspective. As he continues to work closely with the Nordics’ management team, he points out that TikTok isn’t like Facebook or Twitter. 

“It’s not about socializing with your family and friends,” he said. “It’s an entertainment platform.”

TikTok currently views the digital entertainment behemoth YouTube as its biggest competitor. Keeping this in mind, advertisers shouldn’t focus on the usual engagement metrics associated with social media platforms like Facebook. Instead, TikTok can be a great way to drive brand awareness and brand affinity. 

As Johan loves to point out, it’s all about immersing yourself in the platform to achieve a true sense of how your audience consumes it, then adjusting your messaging and creatives to suit. 

Making a stable plan for an uncertain future

While nobody can say for certain what the US government will ultimately do, experts like Johan maintain that the cost advantages, ever-growing popularity, and the demographic reach of TikTok mean that those advertisers who are currently using the platform should stay the course. And while you’re sure to see loads of headlines in the coming weeks and months, it's not yet worth it to start worrying or changing your strategies too much. 

You may want to think about it like the ups and downs of the stock market. Those investors who constantly adjust their portfolios according to the daily news and micro-economic movements are sure to lose out in the long run, compared to these investors who keep their eye on longer-term goals and growth. 

And for those marketers who are not yet advertising on TikTok, it’s not too late to add the platform to your mix. We even have a great Funnel Tip that will give you a few strategies to get started. Be sure to check it out here.