While Biden signs the TikTok bill, marketers still aren’t panicking

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When it comes to the TikTok “divestment or ban” bill, marketers are worried. But most are not too panicked about the outcome — at least not yet.

The U.S. Senate passed a bill (79 votes to 18) on Tuesday to ban TikTok in the U.S. if owner ByteDance doesn’t sell its shares within nine to 12 months. It’s a revision of a previous bill, approved by the House, which gave ByteDance 165 days to sell TikTok. The new bill, linked to a $95 billion foreign aid package, includes $60 billion for Ukraine, $17 billion for Israel’s weapons and $9 billion for Gaza. TikTok’s inclusion falls under the Protecting Americans’ Data from Foreign Adversaries Act of 2024 and gives ByteDance 270 days to divest the company. President Biden signed it yesterday.

Responding to Digiday’s request for comment on the matter, a TikTok spokesperson said: “This unconstitutional law is a TikTok ban, and we will challenge it in court. We believe the facts and the law are clearly on our side, and we will ultimately prevail. The fact is, we have invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation. This ban would devastate 7 million businesses and silence 170 million Americans. As we continue to challenge this unconstitutional ban, we will continue investing and innovating to ensure TikTok remains a space where Americans of all walks of life can safely come to share their experiences, find joy and be inspired.”

While TikTok users, creators and agencies are sounding the alarm over this move, there’s one group not sweating it: marketers. Shray Joshi, founder and CEO of Good Peeps, is one of them. As he noted, big companies would just shift their ad dollars back into Meta and Google. Which is to say, as important a role as TikTok has played for some marketers, it isn’t irreplaceable. In many cases, it’s not even a massive outlay for them. The platform has yet to garner investments bigger than experimental budgets for the most part.

“If TikTok was banned, having all the attention moved back to those alternative platforms would bring down the cost of media,” Joshi said. “CPMs would go down because more people are using Meta and Google again. And I think that marketers would see better performance across channels if that actually ended up happening.”

It’s a perspective shared by Baruch Labunski, founder of Rank Secure — which is both a TikTok-first agency and a Google partner.

“A potential TikTok ban isn’t a major concern for us,” he said. “Should a ban happen, our contingency plans involve reallocating our TikTok budget primarily towards Google, thanks to our strong partnership,” he said, adding that Rank Secure’s clients are actively engaged across multiple platforms including Meta and Snapchat. As things stand, Labunski’s clients’ social mix consists of 50% toward Google, 20% each toward Meta and TikTok, and the remaining 10% for Snapchat.

Truth be told, marketers have been very clear that this time around the bill feels like the real deal compared to all those previous failed attempts. Which is why many started contingency planning when the first TikTok bill was pushed through the U.S. House last month. But given that TikTok’s head of public policy for the Americas Michael Beckerman sent a note to staff stating that if and when the bill is signed, the platform will take the matter to court, plus the extension on the divestment deadline, no one seems convinced (yet) that an outright ban will happen anytime soon.

“There are too many political and corporate ramifications if it does,” added Labunski. “But we anticipate possible investigations and regulatory actions.”

The same goes for Yuriy Boykiv, CEO of 360-e-commerce growth agency Front Row Group, which has been supporting brands with their TikTok Shop strategies.

“Our clients are operating with the assumption that someone will buy TikTok and that this will be resolved,” he said. “Even if nobody buys the app, it doesn’t mean TikTok will disappear immediately. And, should it ultimately disappear altogether, the demand for a vertical video platform never will.”

With that said, if an outright U.S. ban does happen, it’s the smaller businesses that will be impacted the most.

“Many SMBs have spent days, hours and years cultivating a community so they would likely have to start from scratch on another short-form platform,” said Joshi. “TikTok for those smaller companies was probably too expensive to play the advertising game on (low CPMs but conversion rate lower than Meta and Google) but TikTok’s For You Page played a strong role in their ability to tell their story for free.”

But it’s a shift those marketers could manage to pull off and without upending their businesses in the process — for the most part, anyways. That’s the thing with TikTok. It hasn’t become a must-have addition to enough media plans. That’s not to say it doesn’t have a sizable ads business. It does, to be clear. But there are still many marketers who aren’t convinced it’s the place to spend a lot of their ad dollars, especially when Meta and YouTube both have their own alternatives in Reels, Stories and Shorts. That lack of appetite for TikTok compounds a more existential problem: short-form video isn’t exactly as easy to monetize as the longer videos on the likes of YouTube and Meta, which is why TikTok has stepped up efforts to diversify revenue in shopping and search.

Due to the short length of TikToks, “you can’t place a mid-roll ad or a pre-roll ad,” Jamie Ray, founder and CEO of Buttermilk, said, when comparing advertising on TikTok to the ease of placing ads in a long-form YouTube video, for example. “Clearly from an ad revenue perspective, it [short form] does limit the platform as well.”

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