Why brands increased their ad spend on TikTok despite the looming ban

TikTok has been in the news over the last few weeks following a grueling five-hour battle with US lawmakers and the CEO of the social media company, Chew Shou Zi as it faces a potential ban in America over security and child safety concerns. Considering that TikTok recently revealed that it has 150 million US users, a ban in the country would be a massive blow not just to TikTok but also to brands who prioritise spending on the platform. However, it would appear that despite looming threats, brands are still spending more on TikTok advertising than ever before. 

According to the Financial Times, data analytics company Sensor Tower has reported that advertising on TikTok has increased by 11% in March this year in the thick of legal battles. It reported that some of the biggest spenders were mega companies such as Pepsi, Amazon, Apple and DoorDash. 

Don't miss: TikTok recruits ex-Disney comms chief and former Obama officials in fight against US ban

In fact, brands are opting to spend on TikTok despite its uncertain future indicates that TikTok is still attractive to big brands as a social media platform with 1.05 billion active users spread across 154 countries, according to Demand Sage's latest statistics. 

One of the biggest reasons behind this would be simply because of TikTok's consumer reach, according to Edwin Yeo, the general manager at Strategic Public Relations Group. 

Brands are mostly concerned with consumer reach and TikTok has that.

He continued by saying that until such time that it is banned, there is very little reason for them not to leverage on the platform's considerable audience.

Agreeing with him, Danny Wong, the head of growth and innovation, APAC at TEAM LEWIS noted that brands are still spending on TikTok because not only is it still showing signs of strong user growth, but that it is still viewed very positively amongst its key audiences.

"So, until any tangible action or mandate is given that forces marketers to act otherwise, it’s still a very powerful tool and platform to reach consumers and will continue to be used as such," he said. 

Wong added that it could be that bigger brands are spending more on TikTok despite its uncertainty simply because bigger brands have better contract-negotiating powers which may include the option of turning them into a contingency clause which will allow the termination or recovery of banked budgets should it come down to that.

This is why many big brands are continuing to spend as usual, as digital spends can be shifted around quite easily these days.

He added that it is in TikTok’s interests to keep that flexibility, to maintain advertiser confidence in this time of uncertainty.

Adding on, Vitya Vijayan, a search and social director at M&C Saatchi Performance, noted that should there be a ban, the impact on brands will likely be minimal as the content created for TikTok could easily be ported over to platforms such as Meta or Snapchat. She added that brands typically have diversified media strategy to repurpose resources, content and budgets elsewhere so there may not be much to lose when it comes to continuing to invest in TikTok. 

Key factor of being the preferred social media choice

Besides its consumer reach in the app itself, according to Jheeva Subramanian, the CEO of Protinus Group, another key thing TikTok has going for it in terms of advertising is that it presents brands with a chance to connect with a vast audience that might be out of reach on other social media platforms. He said:

 Facebook is losing relevance and whilst Instagram is still relevant, the short form video which TikTok made famous is currently the preferred choice.

Noting that this was particularly true for younger audiences, Subramanian added that with over a billion active users TikTok has made it the perfect place for businesses to exhibit their goods and services.

He also noted that advertisers likely prefer TikTok because its algorithm prioritises content that is "witty, imaginative, and captivating".

As a result, brands have an ideal chance to engage with their intended audience in a significant manner, he said. "If brands can produce TikTok content that strikes a chord with users, it has the potential to become viral and attract a vast viewership."

Subramanian noted that while the uncertainty around TikTok's future may be a concern for brands, at the moment, the benefits of using TikTok to advertise or sell is still over the risk of not being on it especially when, according to Subramanian.

There isn't an alternative that is as popular as TikTok.

As long as TikTok is still online, it remains an extremely powerful platform for marketing and outreach, given its global reach, added Jose Raymond, the director of strategic advisory at PRecious Communications. "There is no reason whatsoever for brands which are already hooked on the platform to stop using it for brand awareness and I suspect they will not stop until the day comes, if it comes at all," he concluded. 

As this carries on, TikTok waits with bated breath to see if lawmakers will vote to ban the app in the US. During the five-hour hearing, Chew fought tooth and nail (albeit calmly) to note that TikTok does not sell data to the Chinese government. He further emphasised the controls put in place to protect younger users from harmful or inappropriate content, and the steps taken to protect the mental health of the young with controls. Since then, social media has been filled with conversations about the types of questions US lawmakers posed to Chew, how Singaporean Chew really is and what the implications of a US TikTok ban could mean for the app in the country as well as globally. 

While Chew might have won over the hearts of netizens, the reality remains that more governments around the world such as Singapore, Canada and Belgium have begun to ban or restricting the app's usage on government-issued devices as they take action to secure their data. 

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