TikTok Advertisers Stick by the App Amid Threat of US Ban

By Sheila Dang

Ad experts say that advertisers are still committed to spending money on TikTok despite the threat of a ban in the U.S. due to national security concerns.

This steadfastness is coming as TikTok - owned by Chinese tech company ByteDance - fights to prevent a U.S. ban after lawmakers introduced legislation that would give President Joe Biden’s administration the authority to ban apps posing security risks. In multiple countries, the short-form video application has been banned.

TikTok will host a presentation on Thursday night in New York for advertisers as part of NewFronts. This annual week-long event showcases new features and content for social media platforms and streaming video.

According to Insider Intelligence, despite the concerns over its Chinese ownership, TikTok’s ad revenue is expected to increase 36% this year to $6.83 Billion, according to Insider Intelligence.

Ryan Detert is the chief executive officer of Influential. An influencer marketing firm. He said that none of his clients have said "don't waste money on TikTok."

He added, "There is no contagiousness that we are seeing." Influential has worked for brands such as Pepsi, the NFL and others.

Two media buyers from two major ad agencies have told Reuters the Washington scrutiny of TikTok has not yet affected their client's plans. Two buyers, who spoke under condition of anonymity about their relationships with TikTok, discussed the subject.

TikTok's presentation on Thursday will introduce a new ad-format that allows brands to place ads alongside content from publishers such as BuzzFeed and Dotdash Meredith, while giving a 50% cut to the ad revenues.

Mark DiMassimo is the founder of DiMassimo Goldstein creative agency, which has worked on brands like Hello Fresh and Samsung.

Even so, some media buyers admitted that the U.S. ban was the "elephant" in the room during the advertiser's presentation.

TikTok announced on Tuesday that its director of U.S. Trust and Safety would leave the company the following week. This will leave the app without an executive who was responsible for content moderation, and development of safety tools, in the division which housed U.S. User Data.

"There is a lot uncertainty, combined with general uncertainty about the economy," said Stephani Estés, chief media officer of digital marketing agency Goodway Group. "You need to think about the what-ifs."

TikTok has said that it will address advertiser concerns in a "direct, open and fact-based dialogue."