Advertisers Worry About The Tiktok Ban's Damage While Holding Out Hope The App Won't 'go Dark' For Long

Kayla Bartkowski/Getty Images

• Advertisers hope TikTok can return to the US soon after a ban that will likely take effect Sunday.
• TikTok's future in the US now seems to hinge on President-elect Donald Trump.
• Advertisers say a long US shutdown will degrade TikTok's value because users will flee.

If TikTok returns to the US after "going dark," would advertisers come back, too?

That was the big question floating around the ad industry on Friday after the Supreme Court upheld a law forcing TikTok's Chinese owner to divest from the app or see it banned on Sunday.

Brands will not be able to run ad campaigns in the US once the TikTok ban comes into effect, but they will still be able to log in to its ad platform to manage ads running on the app in other countries, several ad agency execs told Business Insider.

TikTok reps have said they will look to refund advertisers for campaigns that weren't completed by the time the ban takes effect, one of those agency execs said. They, like some others interviewed for this article, asked for anonymity to discuss clients' plans and to protect their business relationships; their identities are known to BI.

Despite this movement and disruption — and allegations from Congress that the app could be weaponized by the Chinese government for data collection and to spread propaganda — industry insiders said most advertisers are ready to bounce back should TikTok be switched back on in the US.

"Our clients are seeing too much success on the platform to turn away from it completely," a second agency exec told BI.

TikTok generated around $12 billion in advertising revenue in the US last year, according to estimates from the research firm EMARKETER.

As the potential of a TikTok shutdown loomed in recent months, agencies were already advising clients to distribute their TikTok budgets across a broader range of apps should the ban come to pass.

Jon Molina, a senior director at the digital agency Brainlabs, said it's advising clients to put around 75% of their TikTok budgets with Meta on Facebook and Instagram Reels and the remaining 25% on YouTube Shorts once the ban comes into effect. Advertisers should monitor the performance of those campaigns over the coming days and optimize their budgets accordingly, he said.

While Meta and YouTube are expected to be big beneficiaries of TikTok's woes, some ad buyers said they're not like-for-like replacements.

"A lot of brands have not only seen advertising results but new engagement organically from TikTok — people reviewing products, people filming unboxing videos," a third agency exec said. "Brands are able to connect with new and diverse audiences, and those will be the expectations of any platform moving forward."

Advertisers are hoping a TikTok rescue deal is secured quickly

TikTok and many of its advertisers are now looking to Trump to save the app once he takes office next week. Trump, who recently said he opposes a TikTok ban, wrote in a social-media post on Friday that he would make a decision on the app soon.

A TikTok rep pointed BI to a video posted on Friday, in which TikTok CEO Shou Zi Chew thanked Trump for the "opportunity to work with us to find a solution that keeps TikTok available in the United States."

Chip Somodevilla via Getty Images

Advertisers' lasting appetite for TikTok will depend partly on how long a rescue deal takes — especially as its parent company ByteDance is expected to need the Chinese government's sign-off. If creators find success elsewhere, they might not be inclined to reestablish themselves on TikTok, and advertisers will follow the audiences.

"I'd be shocked if a big TikTok creator could replicate that success in one week, but if it's several months, it could be too far gone," said Shamsul Chowdhury, EVP of paid social at the digital agency Jellyfish.

The third agency exec said that some advertisers would have big questions for TikTok's new owner before they picked up where they left off. For example, they might want reassurances that they could continue to run global campaigns from the US, more details about how their data would now be handled, and information about which brand-safety controls they could use.

Brands are ramping up on YouTube Shorts and Meta Reels

For now, advertisers are getting ready to put their contingency plans into action. Rival apps are keen to make the process as easy as possible. January is marketing budgeting season, when many media companies entice advertisers with incentives.

"We are hearing from multiple providers, including other social platforms and non-social media providers, about reallocation incentives such as how TikTok's audience is also available on their platforms, added value based on minimum incremental spend, discounts on higher impact units like takeovers, and funding to support creative projects," said Prerna Talreja, managing director of integrated investment and partnerships at the media agency Crossmedia.

As advertisers drag and drop their TikTok campaigns into Meta and Google, ad prices are likely to spike, given the supply-and-demand auction dynamics of those platforms.

"You may end up seeing CPMs going haywire for a short period of time," said James Poulter, head of AI and innovation at House 337, a creative agency. CPM refers to the cost to reach 1,000 ad impressions.

The language-learning app Duolingo, a big TikTok advertiser known for its "unhinged" marketing featuring its green owl mascot and snarky responses in the comments, has seen this movie before.

Duolingo

Duolingo's chief marketing officer, Manu Orssaud, said the company was shown the importance of adaptability when TikTok was banned in India in 2020.

The brand has been doubling down on YouTube in particular. Duolingo grew its view count on YouTube Shorts by 423% to 1.1 billion last year, and it added 3.3 million subscribers to its YouTube channel, bringing the total to 5.2 million.

"While TikTok's algorithm has been a game-changer, what truly drives our success is the creativity and innovation of our social team," Orssaud said.