What Would a TikTok Ban or Sale Mean for Advertisers?
What TikTok divesture entails
If ByteDance agrees to sell TikTok, it’s likely that another technology company will acquire the platform. Former Activision boss Bobby Kotick reportedly expressed interest in buying TikTok earlier this month, and in 2020, Microsoft was in talks to purchase the U.S. operations of the platform.
As a result, TikTok could benefit from the technological capabilities of that company, and vice versa, especially if the platform contains an existing DSP (demand-side platform).
“What that would mean for advertisers is increased inventory and opportunities to buy that media,” said Johnston. “You will probably see decreased costs come onto the platform from direct buys, but more premium ad units and more autonomy.”
Conversely, if users leave the platform and ad buyers pull ad dollars from TikTok, CPMs become more efficient and auctions would be less competitive, said Johnston.
Meta’s Reels and YouTube Shorts are runner-ups
TikTok remains a key focus for brands, driving performance and boosting influencer marketing efforts alongside brand messaging. Ad spend on TikTok reached $1.2 billion in Q4 2023, 43% more than the $805 million spent during Q1 2023, per MediaRadar.
Brand partners at Tinuiti have increased its investment in TikTok by between 10% and 15% year-over-year for the last two to three years.
However, in the event of a renewed call for a nationwide ban, advertisers are expected to shift their ad dollars to platforms where TikTok’s 170 million active users migrate. Meta’s Reels and YouTube Shorts could emerge as alternatives, according to Johnston.
As a result, creators whose primary audience is on TikTok may find themselves in a difficult position if brands decide to allocate their marketing budgets to creators with larger audiences on other platforms.
