With TikTok Inc.'s fate in the US unclear, ad agency executives are searching for alternatives to the popular short-form video platform while hoping for a political solution that keeps it in operation long-term.
President Donald Trump, in one of his first acts in his second term of office, extended the deadline by which Beijing Byte Dance Telecommunications Co. Ltd. must sell or shutter TikTok in the US to April 4. The extended deadline gives TikTok an extra 75 days to find new ownership that satisfies the US government's national security concerns. A bipartisan law signed by former President Joe Biden originally gave TikTok 270 days to find a buyer or face a ban.
Ahead of the initial Jan. 19 sale deadline, TikTok went offline in the US for 14 hours. While TikTok ultimately came back online for its existing users, it is not available on Apple Inc. or Google LLC app stores. Given the uncertainty about the platform's US outlook, marketers are working to make the most of the coming months — both in terms of engaging with TikTok's US audience and making contingency plans for the platform's possible shuttering there.
"We are always one political ruling, business filing, or data breach away from rapid shifts in the space," said Ian Baer, founder of social media agency Sooth, which deploys AI-driven data to help direct campaigns.
Still ticking
TikTok ranks among the top five most used social media platforms in the US, behind Meta Platforms Inc.'s Facebook, Facebook Messenger and Instagram, and X, the platform formerly known as Twitter, according to S&P Global Market Intelligence Kagan US Consumer Insights survey data.
TikTok has said it has more than 1 billion users worldwide.
"TikTok is hard to knock off the pedestal," said Juliette Aiken, chief marketing officer of DotDigital, which offers customer experience and data platform for marketers, as well as email and SMS marketing software and ecommerce personalization services.
As long as consumers are using the platform, advertisers will be there as well, said Mike Ford, CEO of Skydeo, a marketing company specializing in data-driven advertising.
"Campaigns are planned in advance, funds put aside," Ford said. "Sunday, Jan. 19 was a blip — consumers and brands lost a day of usage."
Beyond reach, Ford noted that TikTok offers advertisers other advantages, including its pricing. Many brands began using TikTok in 2021 and 2022, when the cost for every 1,000 impressions (CPM) was $3 to $4, while Facebook CPMs were in the $15 range.
"The engagement, the impact was there, and the pricing was really cheap," Ford said.
While TikTok pricing has come up, it remains cheaper in many cases than other platforms, said Ford. Marketers have continued increasing their TikTok allocations as a result. For this reason and others, Ford expects marketers to continue spending on TikTok during its US transition period. "It works great and is cheaper than most sources. It will be business as usual," he said.
However, given the pending ban, Will Trowbridge, founder and CEO of Los Angeles-based creative content agency Saylor, questioned whether it would indeed be business as usual amid the transition period.
"Its removal from the App Store raises questions about whether the app will remain updated and functional over the next [70+plus] days," Trowbridge said.
Diversified marketing portfolios
Despite TikTok's importance, Ford emphasized that brands are not betting all of their ad budgets on TikTok. Many brands still spend more with Meta's Instagram and Facebook and Google platforms because they have invested in those for longer, he said.
"I think most marketers want a mix," Ford said.
Sooth's Baer said a mixed portfolio is important because the social media realm is still evolving, both in terms of regulation and consumer preferences.
The Sooth executive also said there is a misunderstanding that Gen Z views TikTok as the only relevant social media platform "Our data shows that while penetration and frequency may be lower for Reddit, Discord and Tumblr, Gen Z users enjoy those platforms as well," Baer said. In video advertising, he noted there are similar opportunities available with Meta's Reels, YouTube Shorts and Snapchat, among others.
If TikTok does shut down in the US, Aiken sees Instagram and Facebook benefiting — though she noted that all social media platforms are becoming better at video content. "I checked out LinkedIn the other day and the first thing I saw was video," she said. "I think they're all getting ready to try and grab a greater slice."
Prospective buyers
Trump has said he is looking for a TikTok deal in which US investors own at least a 50% stake in the platform. While ByteDance would retain a stake, data collection would fall to the new domestic owner.
In terms of potential buyers, Trump said Microsoft Corp. is among the interested parties. Artificial intelligence-based search engine platform Perplexity AI Inc. has submitted an offer, as have billionaire and former Los Angeles Dodgers owner Frank McCourt and "Shark Tank" investor Kevin O'Leary. Law firm Paul Hastings is providing counsel to a syndicate of American investors, led by tech investor and Enployer.com founder Jesse Tinsley. Trump previously indicated he thought Elon Musk, who owns the social media platform X, and Oracle Corp. co-founder Larry Ellison should own TikTok in the US.
Agency executives said the M&A jockeying is unlikely to damage TikTok’s appeal as a marketing force. The platform has significant "consumer loyalty," DotDigital's Aiken said. "Users are going to keep coming back until forced to do otherwise."