Is TikTok Still Dependable for Advertisers?

Is TikTok Still Dependable for Advertisers?

News by Roberto OrosaRoberto Orosa
Published: April 24, 2023

The U.S. ban may be imminent, but TikTok’s advertisers continue to keep the app alive.  

Key Insights: 

  • TikTok is facing bans all over the U.S. after its CEO Shou Zi Chew faced congress last March. 
  • Despite this, it remains to be one of the most-used social media platforms and a trusted app for advertisers. 
  • Following Chew’s face-off with the U.S. congress, he spoke in a TED conference to share the app’s ongoing commitment to strengthen content moderation policies. 

TikTok has seen a rough year so far.  

Lawmakers from the United States alongside other countries have been keen on enacting a total ban on the platform – in fact, the app is already prohibited among members of the White House, the European Commission, the Canadian government, the British Parliament and more. 

But why? 

Lawmakers believe that the social media app poses great risks to user data privacy and national securities, with fears that its parent company ByteDance provides China with sensitive information. 

They also believe that China’s laws allow the country to demand this to be used for intelligence-gathering operations, while the app can be used to spread propaganda and misinformation. 

TikTok denies data breach claims 

Last March 23, TikTok CEO Shou Zi Chew appeared in front of the U.S. congress to deny the company’s connections with China and ensure that the app’s users are safe in a near-five-hour testimony. 

The CEO explained that the app has been building a firewall to seal off protected U.S. user data from unauthorized foreign access. " The bottom line is this: American data stored on American soil, by an American company, overseen by American personnel," he added.  

Moreover, TikTok has spent an estimated $2 billion on “Project Texas” - the company’s attempt to gain American trust in its security. Currently, the project has about 1,500 employees and is contracted with Texas-based cloud company Oracle Corp which stores its U.S. user data. 

“TikTok has taken unprecedented steps to build trust by securing US user data and systems on US soil, and we’re confident that our efforts address all national security concerns,” said TikTok. 

Despite this, lawmakers found Chew’s answers to be evasive, with many claiming that the app is a danger to its younger user base.   

The social media platform by the numbers 

While the app continues to face growing U.S. state and university bans, it remains to be one of the strongest platforms today. 

In an effort to woo lawmakers, Chew shared that the number of TikTok users in the U.S. has jumped by 50% since 2020 with over 150 million monthly active users.  

Brands have also increased spending on TikTok. According to Sensor Tower, advertising on the app has grown by 11% in March, proving that it is still an advertisement-effective platform, with companies like Pepsi, Amazon and Apple being some of its top spenders. 

UM, Worldwide Chief Media Officer Joshua said that an executive order resulting in an immediate TikTok ban affecting advertisers would be unlikely. “Even with bipartisan support, the legislative process will be protracted — giving marketers ample time to plan alternative strategies,” he explained.  

Regarding consumers, a report by Measure Protocol last January revealed that users between the ages of 16 and 25 have spent an average of 12.7 hours a week on the app. Meanwhile, 78% of consumers in the age group have also reported to use TikTok second to YouTube, which had a usage rate of 92% and an average use time of 6.6 hours.

Measure Protocol has also found that the video streaming app is responsible for 1% of all iOS in-app transactions, making it a viable and effective eCommerce destination. 

Get connected with the right advertising agencies for your project.

In the Spotlight: TikTok ups content regulation ante 

For the first time since the testimony, Chew made an appearance in the TED2023 conference to discuss the platform’s ongoing commitment in strengthening content moderation.  

Speaking on the matter, the CEO said the company has thousands of workers led by a group in Ireland dedicated to moderating content within the ap.  

Chew also reiterated the app’s “clear community guidelines,” clearing the claims that its executives “make any ad-hoc decisions” when they deal with “bad actors” on the app.   

“Based on that, we have built a team that is tens of thousands of people plus machines in order to identify content that is bad, and actively, proactively remove it from the platform,” the CEO explained.  

The head of TikTok also assured that the company is working on tools to prevent Beijing from snooping on U.S. citizens and spreading propaganda on the app. “And I’m very confident that with an unprecedented amount of transparency that we’re giving on the platform, we can reduce this risk to as low as zero as possible,” he added. 

Despite the ongoing pressure, numbers show that TikTok is still headed toward a positive direction. A survey by Capterra revealed that 75% of 300 US marketers planned to increase app spending in the next 12 months. Meanwhile, Insider Intelligence said TikTok is still forecasted to make $14.15 billion by the end of the year.  

While the U.S. ban seems imminent, its timing remains a question. Should it be passed, the RESTRICT Act introduced by a bipartisan group of senators last month has a long way from becoming law.  

U.S. Senator Rand Paul has also blocked an attempt to fast-track the bill. “Have faith that our desire for freedom is strong enough to survive a few dance videos,” the senator shared. 

While TikTok is looking to end 2023 on a good note, only time can tell how it will perform among businesses and advertisers once banning efforts are accelerated – if it even affects their decision.  

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