The Republican-controlled US House of Representatives voted on Wednesday to force Chinese tech company ByteDance to sell TikTok within six months or face a ban. The White House has urged the US Senate to pass the bill, and US President Joe Biden has pledged to sign it.
Tik Tok office in Culver, California, USA. Photo: Reuters
Facebook Reels and YouTube Shorts, TikTok's biggest competitors, would be the beneficiaries of ad budgets if the app were banned in the US, advertising experts say.
TikTok said it would exercise its legal rights to stop the ban, which it said would "take billions of dollars out of the pockets of creators and small businesses."
“The momentum around this law is greater than previous national efforts to restrict or divest TikTok, and advertisers are watching the situation closely,” said Jasmine Enberg, principal analyst at research firm Insider Intelligence.
If the bill goes forward, “it will make us more vigilant,” said Jack Johnston, senior director of social innovation at Tinuiti, a digital marketing firm that has worked with brands like Revlon and Elf cosmetics.
Some advertising agencies say they are advising clients to maintain a “business as usual” approach to TikTok, noting that the viral app has weathered multiple previous attempts to limit its availability in the U.S., including under former President Donald Trump.
While advertising budgets are planned months in advance, brands can quickly place or withdraw social media ads.
TikTok videos can quickly create new trends in music , fashion, and beauty, and brands have flocked to the app hoping to be part of major cultural moments. Insider Intelligence estimates TikTok will generate $8.66 billion in US advertising revenue this year.
A digital advertising firm told clients on Wednesday that the high level of risk involved in banning an app as large as TikTok makes a complete ban unlikely.
Johnston said it was likely the app would be sold, and that the six-month window would give brands time to prepare. “While a large portion of TikTok users are also active on other platforms, there is a large portion that uses TikTok as their primary social media channel,” Johnston said.
Hoang Anh (according to Reuters)
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