The party didn’t stop for TikTok.
Last week, a Supreme Court ruling seemed to seal TikTok’s fate. This week, under a new president, the app was given 75 days before it must be acquired by US-based owners or shut down.
The missed deadlines, delays, pontificating and wondering about the true motives driving the decision-making should be familiar to those of us in ad tech. After all, we lived through four years of Google saying it would pull cookies from Chrome. And look how that turned out.
Which is to say, what ultimately happens with TikTok may not be a sale or a ban. Given the uncertainty and the dragged-out process, something less predictable could happen than a sale to Oracle or Elon Musk or even MrBeast (all of whom are potential buyers).
According to MediaRadar, TikTok attracted $4.8 billion in ad dollars last year, from big names like Disney, Walmart, Amazon, Uber, Google, Target, P&G, Coke and Pepsi.
That’s a lot, but also a little. To put that in perspective, Uber’s recently launched ad business built up a $1 billion run rate. And YouTube makes roughly $5 billion every six weeks. But given the light ad load of TikTok, coupled with the huge amount of attention it commands, the amount of whitespace left to show ads is huge. Plus, it gets a cut of everything sold through the platform. Ever watch a livestream of an influencer selling things? It’s QVC for Gen Z.
But with a ban looming, do brands know (or care) about the app’s risks to national security? TikTok caught the attention of the same government agency that forced Grindr to sell to a US-based owner. The US government was concerned about the possibility of user data falling into the wrong hands for both apps.
With TikTok, however, there is an added concern that wasn’t a factor in Grindr: the algorithm. Politicians in particular, skittish after Cambridge Analytica, grilled TikTok CEO Shou Zi Chew about what viewers could access on the platform, concerned that TikTok could be censoring the same ideas and concepts it censors within China. And there is even concern (anecdotal and unsubstantiated) that TikTok could have put its thumb on its algorithm to sway public opinion in favor of not banning the app in the months leading up to the ban.
But for brands and advertisers, social and political drama within an app are now common occurrences. And the ban doesn’t seem to be affecting plans to use the app – though TikTok’s competitors are also hard at work building similar vertical video-like experiences. The delayed TikTok ban will likely be the first of many twists and turns for the app in the weeks to come.
