For advertisers, the biggest concern about TikTok isn’t the ownership — it’s the audience
As tensions between the U.S. and Chinese governments continue to run high, TikTok has become the latest political hot potato caught in the middle.
Earlier this month, U.S. Secretary of State Mike Pompeo said in an interview that the U.S. government was “looking at” banning Chinese social media apps, including TikTok, which is owned by China-based ByteDance. The Trump re-election campaign stepped up its rhetoric against TikTok this past weekend by running attack ads. “WARNING: China is spying on you,” said one ad, which ran — of course! — on Facebook. The ads encourage viewers to sign a petition, calling for a TikTok ban. India already banned TikTok and another Chinese phone apps earlier this month, citing national security concerns.
(A TikTok spokesperson said it was “interesting” Facebook was talking money for a political ad attacking a competitor “just as it’s preparing to launch a TikTok copycat,” referring to Instagram Reels. The company has also refuted the suggestion it has shared or would share user data with the Chinese government.)
For advertisers, however, the nationality of TikTok’s ownership places fairly low down the rankings in their risk assessments of the app. Of the dozen or so industry experts — agency executives, marketing executives and consultants — I asked about the topic last week, none suggested advertisers were making any dramatic shifts in their TikTok strategy as a result of the recent political headlines.
For many of the experts I spoke to, some of the reason was simply that TikTok itself isn’t high up on advertisers’ agendas. While the app has ballooned in popularity, with more than 2 billion downloads to date, according to analytics firm Sensor Tower, advertisers are a cautious bunch and adoption of new platforms tends to lag user growth by some distance. For advertisers who are spending on TikTok, for most, it still sits in the “experimental” bucket for now.
Part of that can be explained away simply by the fact that TikTok is new: It only launched its first ad units at the beginning of last year. And while advertising industry experts have praised the pace at which TikTok has launched new products and announced integrations with third-party measurement and verification firms, it’ll take time to meet industry gold standards and become a mainstay of the media plan.
The most important bar to meet? Brand safety and suitability, according to the experts I spoke to. As a user-generated content platform, it’s an issue that’ll linger even if it changes its corporate structure to distance its operations from China.
To counter that concern, TikTok said it removed 49.2 million videos for violating its community guidelines or terms of service between July 1 and December 31 last year — 89.4% of which were removed before they had received any views. That still means more than 5 million pieces of violating content were seen by at least somebody. As with all user-generated content platforms, the game of online content moderation cat and mouse is never ending.
A TikTok spokesperson said the company is working with third-party partners to test its viewability and safety solutions for advertisers. The company has previously confirmed partnerships with firms like Moat, Integral Ad Science, Doubleverify and Openslate.
“We’re in the early stages of working with these partners and will be able to provide more information at a later date, but we can say that advertisers are excited by these partnerships and the controls that we are seeking to provide for their campaigns,” said the spokesperson.
Another key issue for many of the buyers I spoke to is the age of TikTok’s audience. TikTok was the most downloaded app among users aged between 6- and 18-years-old in 2019 in the U.K., according to U.K. communications regulator Ofcom. During lockdown, 14% of 3- to 12-year-olds and 31% of 13- to 18-year-olds in the U.K. used the app.
One ad buyer told me TikTok’s early violation of the Children’s Online Privacy Protection Act, back when it was known as Musical.ly, hiked that caution. In 2019, TikTok agreed to pay $5.7 million to settle Federal Trade Commission allegations that the app illegally collected personal information from children under the age of 13 without getting parent consent. The settlement also required TikTok to remove all videos on the app made by children under 13.
“That’s a bad way to introduce yourself to a new market,” said Brendan Gahan, partner and chief social officer at digital agency Mekanism.
Mekanism and its clients reviewed the details of the violation when it was first announced — the news put “planned activations under the microscope” Gahan added. Ultimately the agency proceeded after determining the lawsuit and fine were results of mistakes Musical.ly, rather than TikTok, had made. (ByteDance acquired Musical.ly in 2017 and in 2018 transferred its users to TikTok, which launched in 2016.)
It could yet get worse for TikTok on the COPPA front. Reuters reported earlier this month that the Federal Trade Commission and U.S. Department of Justice are assessing allegations that TikTok broke the terms of that agreement by failing to delete the videos and data, “among other violations.” TikTok has said it takes “safety seriously for all our users” and that it offers a “limited app experience” to U.S. users under 13, which includes extra safety and privacy protections. TikTok also has a 12+ app store ranking, which allows parents to block the app from their children’s phones using parental controls.
One agency executive also said TikTok’s creator marketplace, which provides data behind influencers’ audience demographics, has also been a helpful tool with their targeting. Still, TikTok is found to be in any way harmful to children — or even just perceived to be — things could start moving very quickly and out of its control.
To be sure, it’s not like TikTok’s advertising business has been a slow starter. The Information reported last month that TikTok is aiming to pull in $500 million in U.S. revenue this year and it’s hiring sales people at a clip. Ad buyers have credited the full-screen, sound-on, creative ad experience and the potential for which videos and fun challenges can go viral on the platform. Multinational companies also already have plenty of experience in working with Chinese media companies. And, right now, some advertisers boycotting Facebook are looking for alternatives to reroute their social spend.
TikTok’s core appeal is the size and loyalty of its growing global audience. Ban aside, if users become spooked and flee the platform, advertisers will follow.
“There’s a cautious tone but there’s not a big concern for brands right now,” about TikTok being caught in the political crosshairs between the U.S. and China, said Amy Luca, chief executive of influencer marketing platform theAmplify. “At the end of the day, advertisers will want to be where their audience is spending time and right now, if you are looking to engage a young audience, TikTok is a good strategy.”
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