Implications of a TikTok Ban
Biden approves TikTok ban
On April 23, President Biden passed a law that will outright ban the TikTok app if the Chinese owner ByteDance doesn’t sell within the next nine months, although Biden could extend that to 12 months if legitimate acquisition conversations are taking place. The app will continue to function as is until that initial nine-month deadline. If the deadline passes and a sale (to a non-Chinese owner) doesn’t occur, the law makes it illegal for web-hosted services to support the app. This means app stores like those operated by Google and Apple would be forced to remove TikTok from their stores and the app will be deleted from users’ devices.
Congress passed the bill citing national security concerns due to the app’s Chinese ownership. TikTok has access to sensitive user data from over 170 million Americans, which the U.S. government fears could become compromised if the Chinese government were to pressure ByteDance for the data.
The bill is expected to face legal resistance of its own, which could delay the current sale deadline. Additionally, Chinese law includes “content algorithms” on their controlled export list, meaning the Chinese government has a say in how the technology is sold. This means the app could also be sold without the algorithm if the Chinese government chooses to hold on to it. TikTok has already announced they will challenge the law and fight to keep the app available within the U.S.
What does this mean for marketers?
In the short term, brands and users should not expect any changes to the app. This is particularly important for brands with active organic and paid strategies as nothing needs to be altered in the immediate future.
But as word of the pending ban spreads, user behavior is unknown. The threat of the ban could either intimidate users into leaving the platform early or spark even more support for the app, increasing engagement. The impact this “waiting period” will have on brands will vary based on how their primary audience on TikTok reacts.
Beyond the nine-month deadline, the future of TikTok is murky. As marketers wait for the situation to unfold, there are a couple considerations to keep top of mind when planning for the future:
- Keep media dollars flexible: If the ban does go into effect before the proposed deadline, TikTok is off the table for media planning, and dollars will need to be shifted to other channels. Other large players like Meta (specifically Instagram Reels) and YouTube have been beefing up their short-form video content capabilities, meaning there is opportunity to shift investment to other similar channels to achieve brand goals.
- Don’t rely on future performance: If a sale goes through that keeps the app active but does not include the coveted algorithm that keeps users so engaged, campaigns may not yield the same organic or paid results as past campaigns and content. Keep this in mind when forecasting and setting media goals.
- Plan for the future & either scenario: If there is one thing that is certain, it’s that TikTok’s future in the U.S. is unknown. Brands should plan for either scenario, so they are prepared in advance regardless of the outcome or timing. For those that decide to proactively prepare, it’s a good idea to start downloading and saving all branded TikTok content and campaign results for future reference in case the ban goes through or other platform changes make historical data unavailable.
