TikTok Ad Spending up 11% Despite Ban Threat

TikTok might get banned in the U.S., but advertisers apparently aren’t behaving that way.

Ad spending on the popular social media platform grew by 11% last month, the Financial Times (FT) reported Thursday (April 6), citing data from app analytics firm Sensor Tower.

Among the top spenders were Apple, Amazon, Pepsi and DoorDash, the data showed. The FT says many companies plan to keep buying ads on the Chinese-owned platform, while a number of top ad agencies have refrained from telling clients to reduce their spending.

This is in spite of rising security concerns about the app from regulators worldwide, including in the U.S., where legislators are considering a ban on TikTok.

“There’s unlikely to be an executive order resulting in an immediate ban that would impact advertisers,” Joshua Lowcock, chief media officer at ad agency UM Worldwide, told the FT. “Even with bipartisan support the legislative process will be protracted — giving marketers ample time to plan alternative strategies.”

TikTok, owned by China’s ByteDance, launched in 2017 and by 2018 had become the most downloaded app in America. Now, it’s a cultural phenomenon, boasting 150 million monthly active users just in the U.S.

That popularity has made it an important place for brands and retailers to promote their products to younger audiences. A ban on the platform could cut off that connection.

“Not only would brands and retailers lose their established a presence on the platform, as many companies have invested time and resources in creating TikTok content to reach a younger audience and drive engagement, they would lose a connection that TikTok has built a following on — authenticity,” PYMNTS wrote last month.

Content that does well on TikTok tends to lack flashy production value and has a way of making viewers feel as if the person they are watching is in the room with them, a valuable dynamic for brands and retailers.

In addition, a ban on TikTok would dramatically alter the influencer marketing space, as many brands today collaborate with popular creators to promote their products.

In 2022, the influencer marketing industry reached $16.4 billion, and 67% of brands and retailers reportedly intend to increase their influencer marketing spend in 2023, while 23% plan to spend more than 40% of their marketing budget on influencer marketing.

Meanwhile, a ban would bring about several potential “winners,” PYMNTS wrote recently, including “competitors such as Instagram, Snapchat and YouTube, who could all see an increase in user engagement and take advantage of the ban to win greater market share.”

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