TikTok Cuts Revenue Goal as Social Media Ad Spend Falls

Social media platform TikTok has reduced its revenue target for the year by as much as $2 billion amid flagging advertising and eCommerce sales.

The goals were slashed by 20% by CEO Shou Zi Chew during a meeting in September, the Financial Times (FT) reported Wednesday (Nov. 9), citing unnamed. The company had initially anticipated revenues in the range of $12 billion to $14.5 billion for the year, but now expects that number to be nearer to $10 billion.

The meeting saw the company blame its workers for not driving enough sales, the report stated, although several employees — past and present — told FT that TikTok had overspent on salaries and social gatherings.

PYMNTS has reached out to TikTok for comment.

The news came one day after reports that the company had shaken up its leadership team in the United States, the platform’s largest market, as TikTok tries to become less dependent on advertising by adding features like gaming and live shopping.

TikTok has apparently transferred North American General Manager Sandie Hawkins to become head of its eCommerce channel, TikTok Shop in the U.S. She’ll be replaced in the short term by Blake Chandlee, global business solutions head.

These changes are happening as social media ad spending has begun to decline, a trend that has played out with other platforms recently.

Snap, for example, said late last month that its “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital.”

To combat these pressures, TikTok in August introduced new shopping features, such as its video shopping ads function, which lets brands place “hyper-relevant, shoppable videos” on the For You page in an attempt to get users to check out a company’s products.

And last month saw reports that the company would add a gaming function to the platform, letting users access a number of mobile games from the home page. These games would feature ads and offer players a chance to pay to access more content.