The US TikTok ban lasted a mere handful of hours before the app was online again. However, the outage illustrated how reliant brands and creators have become on this single platform. Do companies need to look beyond TikTok to ensure continuity in the event of further change?
TikTok, owned by Chinese company Bytedance, was due to be banned in the US on Sunday 19 January, due to Government concerns about whether the app was providing data to the Chinese state.
However, the ban only lasted 12 hours and the video app was soon back online. TikTok was granted a 75-day reprieve on Tuesday (21 January) by the newly-inaugurated President Trump, who was previously one of the first to mention banning the app.
Despite the reprieve, the Supreme Court ruling that upholds the ban still stands – TikTok has to be sold or millions of American citizens will lose access to the app. Some contenders to purchase the app include MrBeast (of Youtube fame), Elon Musk (X), Larry Ellison (Oracle), and Mark Zuckerburg (Meta).
A ban on the app would have an adverse effect on the many businesses which use it to reach consumers, particularly the Gen Z demographic. It would also impact the varied creators who rely on TikTok for their income.
Thomas Walters, Europe CEO and co-founder of global creator agency Billion Dollar Boy, says: “The US TikTok ban represents a significant loss for American consumers, and the creators and small businesses who thrive on it. TikTok has been an essential platform for community-building, cultural influence, and the discovery of information, entertainment, and shopping.”
Founder and managing director of Talent & Brands, and co-founder and managing partner of Supernova, Raf McDonnell, added, “A ban would really hit US creators badly. About 170 million people in the US use the platform. TikTok’s President of Global Business Solutions estimates that the impact would be nearly $300 million in lost earnings for almost two million US creators. And many of these are small business owners who are often part-time creators.”
The ban will also affect small businesses, as many of them sell their goods through TikTok shop.
Rachel Sterling, CMO at agency Identity Digital says that the threat of a platform ban means that companies need to prepare for a world without their chosen channel. “Brands will need to find a new outlet for social shopping. TikTok has quickly been able to position itself as an insurgent threat to market leaders like Amazon and Google. People are increasingly both discovering and buying directly on TikTok Shop, making it incredibly lucrative as a go-to-market channel for brands. If this disappears, brands will need to amend their e-commerce strategy to find other outlets that easily connect their products with customers.”
Budgets
Due to TikTok’s popularity, many brands during the last few years have increased their ad spending on the platform dramatically.
Consultancy Mediaradar reports that the total US ad spend on TikTok for 2024 was $4.8 billion, a 27% increase over 2023.
However, despite the app remaining operable in most other countries (exceptions include China, Afghanistan, India, and Albania) the ban may cause brands to consider spending their marketing budgets elsewhere, so they can be prepared in the case of future restrictions.
Callum Gill, head of strategy at Rehab Agency, says: “Budgets will take a direct hit. Agencies and brands will be forced into reactive spending, reallocating resources to unproven platforms or doubling down on old stalwarts like Instagram and YouTube. But here’s the kicker: these platforms don’t offer the same cultural cachet or ROI that TikTok has consistently delivered. Expect marketing teams to pour money into new platform tests, hastily built influencer relationships, and duplicated campaigns to salvage what they can. All this while trying to justify these shifts to sceptical stakeholders.
“The uncertainty around audience behaviour and platform performance will mean more cautious spending overall, leading to tighter budgets and potentially stalling innovation. If brands panic, and many will, they risk overinvesting in ineffective channels or losing touch with their target demographics entirely. The TikTok ban isn’t just a marketing inconvenience; it’s a budget crisis waiting to happen.”
The US ban won’t just affect the US market says Dylan Patel, Head of Social Media at agency Born Social: “There could be some knee-jerk reactions here in the UK, with budgets being reallocated, but a US ban would have no material long-term impact on the UK market. Brands that have seen success through TikTok have little to lose by maintaining a presence. Brands just need to hold their nerve.”
Replacements
The ban, however temporary, has shown many creators the ephemeral nature of content creation. This has caused many to migrate away to platforms they view as more stable to diversify their income channels.
Some of these platforms include old favourites such as YouTube, Meta – though many are steering clear of this platform due to the change in its misinformation policies – and Snapchat.
Apps such as Bluesky, Weare8, and Rednote have also emerged as major contenders in the race to become ‘the next TikTok’.
Bluesky was created in 2019 by the former head of Twitter, Jack Dorsey, and operates in a similar capacity to Twitter (X) allowing users to post videos, comments, and photos. Weare8, created by Zoe Kalar, is a short video social platform that pays its users to watch ads. Users can then donate their earnings to a charity of their choice or have the money paid into their PayPal account.
Rednote or ‘Xiaohongshu’, is a Chinese app owned by Xingin Information Technology that was first launched in China in 2013. The app’s algorithm works similarly to TikTok’s, showing users posts based on interests rather than connections.
The fact the app is Chinese-owned may have fuelled its surging popularity, as many US TikTok users downloaded the app because they were frustrated and annoyed at the US government’s reasons for banning TikTok, becoming “TikTok Refugees”.
This frustration with the US government can also be seen in current memes on the TikTok platform. One recent trend sees creators uploading emotional farewell videos to their “Chinese Spies”.
But, despite the recent popularity of the Chinese app, Raf McDonnell believes long-form content will come out ahead. He says: “YouTube and long-form content will be the ultimate winner in the US. Creators have been embracing this approach for some time, but the real shift will be creators developing their own communities away from platforms.
“The ban has shaken many creators’ confidence and made them realise how reliant they are on one platform for their income, so many will develop their own communities through newsletters and subscriptions. Brands will need to adapt to new platforms and ways of working with creators.”
Will the industry need a replacement for TikTok?
Callum Gill believes it will, saying that he believes that TikTok’s parent company may refuse to do a deal to sell the platform’s US operation.
“Let’s cut through the noise: no, a deal won’t happen,” he says. “ByteDance, heavily influenced by the Chinese Communist Party, has no reason to play ball. All the chatter about acquisitions, from perplexity to MrBeast, is just that, chatter. The U.S. administration’s belief that money motivates everything is misguided when dealing with a state-adjacent entity like ByteDance. TikTok isn’t just a revenue stream; it’s a geopolitical tool.
“ByteDance won’t trade its influence for a quick payout. Meanwhile, the U.S. government is failing to grasp the cultural and economic weight TikTok carries for American youth. The 75-day reprieve is simply delaying the inevitable: Marketers should prepare for life after TikTok rather than hope for a deal because that’s the reality we’re hurtling toward. Deal or no deal, the clock is running out.
However, McDonnell disagrees, arguing: “Ultimately, it’s in everybody’s interest for a deal to be reached. When half the US population uses TikTok, with millions of them making a living from it, and brands want to spend money on the platform, it will be necessary to find a solution. The US will need to address its security concerns, but ultimately a land that advocates for free speech will struggle to silence the will of over 170 million consumers.”
Patel agrees, stating: “I suspect the motivation for reaching a deal will be more political than practical. TikTok’s messaging to US users on 19 January clearly indicated its willingness to work with the new administration. For the US Government, there’s political capital to be gained by unbanning an app that is so popular with a third of the country’s population.”
Read this article at Marketing Beat.