As national security concerns over TikTok’s US presence escalate, some users are migrating away from the app, while marketers are adding escape clauses into their contracts over uncertainty about its future.
Last month, US Secretary of State Mike Pompeo and President Trump said the government was considering banning TikTok over its data privacy and content moderation practices. Then lawmakers voted to prohibit the app from all government-issued devices. The clamor over the issue culminated on Friday, July 31st when Trump said he was prepared to immediately ban the app.
These events sent mega TikTok creators into a frenzy, leading some to delete their accounts and direct fans to follow them on other platforms. Shortly thereafter, TikTok launched a $200 million creator fund to encourage them to stay.
Brands, on the other hand, are pausing TikTok campaigns, and others are amending contracts so they can shift spend to another platform if needed.
For advertisers, brand safety is top of mind.
“The moderation issues have led to a bit of hate speech, bullying and sexually explicit content getting in front of younger audiences. Many of our blue chip clients prefer brand safe environments. Edgier brands are a little more open to pushing the boundaries, however privacy concerns have made them stay away. So while TikTok has seen the benefits of higher engagement during this COVID era, its issues have been an opt-out for many advertisers,” says Ayzenberg media vice president Heather Cohen.
Erik Schmitt, Ayzenberg creative director, says that although TikTok’s algorithm gives brands an equal chance of being seen by their target audience and discovered by new audiences, unlike Facebook, they should still proceed with caution.
“One alternative brands should consider is Instagram Reels – which is very intentionally set up to be a competitor to TikTok,” says Schmitt.
Today Facebook officially debuted its TikTok clone Instagram Reels, a feature that enables users to record and customize snackable clips, in the US and several key international markets.
Ignoring TikTok’s potentially intrusive user tracking comes with a high price tag for brands, says Ayzenberg vice president of product and technology Chris Strawser.
“TikTok has the potential to be really dangerous because the demographic is young, and that demographic doesn’t necessarily guard their data as intensely as older demographics. In a year, if we find out TikTok has been nefariously using consumer data, brands aren’t going to be free from the responsibility of putting their consumers at risk. There’s going to be a reckoning,” Strawser says.
Still, coupled with the app’s addictive nature and eerily perceptive algorithm, TikTok’s massive appeal among Gen Z is hard to ignore.
“For me, the true indicator of TikTok success is how Gen Z is using the platform today in so many different and nuanced ways. On top of almost solely driving the music industry (as seen on any top 50 chart), there are also subsections of TikTok driving real political and societal change,” says vice president of talent and content strategy at ION Steven Lai.
TikTok recently announced updates to its policies to expand fact-checking, flag election misinformation and ban deep fakes.
Since then, President Trump issued an executive order that would ban TikTok and WeChat in the US in 45 days if their Chinese-owned parent companies, ByteDance and Tencent, respectively, don’t sell them.
In a company statement, a “shocked” TikTok criticized the President’s move, saying it has sought for over a year to work with Washington to create a solution to national security concerns. The app asserted it “will be here for many years to come,” and urged users to express their opinion on the potential ban to their elected representatives.
Despite getting banned in India, and its US future being imperiled, TikTok was the top-grossing non-gaming app worldwide in July, Sensor Tower data show. The app saw over $102.5 million in user spending, with 89 percent of revenue from China and six percent from the US.
Timeline of TikTok vs. Trump:
- July 29: TikTok CEO Kevin Mayer urges competitors to disclose their algorithms and moderation policies
- August 7: Trump issues an executive order that will ban TikTok in 45 days if ByteDance doesn’t sell it