Advertisers are already computing their options in light of the U.S. TikTok sell-off bill, which may lead to removal of the app from America as of next year in January, new insights said.
Overall TikTok ad spend was down both in April and May, while four of the platform's biggest-spending advertisers have significantly reduced their focus on TikTok ads in the recent months, MediaRadar's new insights revealed.
Among the biggest cutbacks are Target, cutting its ad spend on TikTok by 30%, and DoorDash, which has cut its ad spending on the platform by 25%. But other big advertisers, like Bayer (-20%) and Procter & Gamble (-10%), are also moving elsewhere.
Which makes sense. If TikTok does indeed exit the US, then brands, logically, are going to have to look somewhere else in the future-and as such, they may well be hedging their bets now, and turning away from TikTok promotions ahead of a broader change.
So does that mean you should reduce your attention on the app as well?
Well, there are a couple of ways to look at this.
First, TikTok is a huge hit and while you have access to that audience, you probably ought to leverage that. Reduced ad spend by the larger players also means perhaps more opportunity and less competition, so for now, at least, it makes sense to continue pushing TikTok promotions and see what results you get.
At the same time, it may be undesirable to deepen your dependence on a platform that may be gone tomorrow, too.
If you become reliant upon the effects you are now gaining from the use of TikTok ads, this can be tough to stomach six months from now, if it indeed exits the U.S., leaving probably a significant hole in your performance data as a consequence.
Which is why the big teams are changing focus, to soften the blow if the platform is soon gone.
Is TikTok actually going to get banned?
Well, right now at least, it is looking like it. TikTok has launched a legal challenge against the U.S. This is the sell-off bill by government-it amounts to a forced sell-off and not a ban, by any imagination-but lawyers at large believe it will never hold, considering the national security ground raised by the government. Or maybe it'll be through a sell-off, which the officials from China have come out in public and are refuting that will not happen, so on balance as it stands at this stage, it indeed seems like TikTok is going to leave the U.S.
But then again, if Donald Trump becomes president once more in November, that can easily turn things around for TikTok once more since there was a call by Donald Trump against the bill implementing the sell-off of TikTok.
It's unclear if Trump could or would rescind the sell-off order, but there appear to be still a few options that might alter TikTok's fate.
Till then, however, it's a judgment call. TikTok offers tremendous reach and resonance for the right ad campaigns. But I wouldn't be putting too much reliance on any one app.