TikTok Ban Updates:
- The social media app went dark late Saturday (January 18) as a federal law went into effect requiring a sale or ban.
- President-elect Donald J. Trump said on Sunday (January 19) that he would issue an executive order to stall a federal ban of TikTok, just hours after major app stores removed the popular social media site and it stopped operating for U.S. users.
- President Donald Trump signed an executive order Monday (January 20) to keep TikTok operating for 75 days, a relief to the social media platform’s users even as national security questions persist.
As the U.S. ban on TikTok looms large and the countdown begins, speculation has hit fever pitch over how this radical geo-political, social media influencer Armageddon will impact ad spend – and more specifically, the $18 billion yearly ad revenue that goes into TikTok’s coffers.
For advertisers, TikTok has been a goldmine for reaching GenZ and Millennial audiences, driving creativity and engagement like never before. However, a ban would force brands to rethink their strategies.
Put simply, it will unleash a massive wave of unspent advertiser dollars – potentially billions – into the marketplace. This will create fierce competition among platform channels like Meta’s Instagram Reels, YouTube Shorts, and Snapchat, serving as a wake-up call for brands to diversify and reduce reliance on a single platform.
It will also encourage adoption of emerging technologies in media measurement, like modernized Media Mix Models, that offer new ways for brands to drive performance in a post-TikTok world.
A Quick Summary of Events
In December 2022, President Biden signed the "No TikTok on Government Devices Act" as part of a broader spending bill, prohibiting the use of TikTok on federal government devices due to national security concerns.
Several years later, Biden signed the “Protecting Americans from Foreign Adversary Controlled Applications Act” into law on April 24, 2024. This legislation required ByteDance, TikTok's Chinese parent company, to divest its U.S. operations by January 19, 2025, or face a ban on the app within the U.S.
TikTok boasts 170 million users in the U.S. alone.
According to The New York Times, the law granted ByteDance a 270-day period to complete the divestment, with a possible extension of an additional 90 days if progress is demonstrated. Failure to comply would result in TikTok being removed from U.S. app stores and internet hosting services, effectively making the app inaccessible to American users.
This move stems from national security concerns over the potential for the Chinese government to access U.S. users' data through TikTok. The situation remains dynamic, with legal challenges and political discussions ongoing as the compliance deadline approaches.
ByteDance lost its first legal effort to overturn the law on Dec. 6, when a panel of three federal judges unanimously rejected TikTok’s argument that the law violated the First Amendment. The company pledged to appeal the decision to the Supreme Court.
Measured Sees Trends Underway
For major brand advertisers, reallocating TikTok ad budgets won’t just be about finding alternative platforms — it will also involve rethinking campaign strategies.
Across the 160+ brands using the Measured Platform, TikTok has experienced a significant boost in share of wallet over the past several years, as major stalwarts like Meta have lost even more share. While spend increase in the viral video platform has slowed beginning in Q4 of 2024, it doesn’t seem that marketers are pulling back entirely from TikTok just yet.
As marketers identify new opportunities for incremental growth, Meta’s lost share of wallet appears to be split among a handful of growing channels among Measured’s portfolio of leading brands.
Investment in lower-funnel, click-based channels (Google, Affiliate, etc.) has remained stable, but the strategies employed have changed. Measured experiments have repeatedly shown a lack of incrementality for these programs when they are allowed to target high intent users, such as existing customers and recent site visitors.
Audience sequestration has driven much higher performance, particularly on programs like PMAX, which has enabled brands to keep budgets relatively similar while driving significantly more value from incremental consumers.
TikTok's pending ban, while existential for ByteDance, has not impacted its user base or its advertisers meaningfully and continues to hold a considerable share of brands’ marketing efforts into 2025. Brands already invested will likely continue to take advantage while this opportunity is still available, as it will likely take months (or potentially longer) for this audience to find a new home with a reliable advertising product, and it is unlikely that the TikTok audience will be fully absorbed back into legacy social media platforms in the event of a full ban.
Should a TikTok ban be implemented, brands with access to automated scale test and holdout testing capabilities will have a head start in identifying other opportunities to reach their desired audiences.
Conclusion
TikTok’s algorithm and cultural impact have allowed brands to achieve engagement levels that are difficult to replicate elsewhere. A TikTok ban could spark broader changes in the advertising industry. With growing concerns about data privacy and geopolitical tensions influencing digital landscapes, marketers may need to prioritize transparency and compliance more than ever, and have clear strategies in place to measure media effectiveness with speed and accuracy.
The stakes are high, and the advertising industry would face a significant shakeup in how and where brands invest their marketing dollars.