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Trends & Insights | Blog

TikTok and the tug of war

April 29, 2024


Social media's tectonic plates are shifting as a U.S. bill threatens TikTok's future. Is your marketing strategy ready to adapt? And what could it mean for brands and creators?

Anton Perreau

President & Managing Director, UCAN

Social media is again at a pivotal point as the U.S. Senate passes legislation that could significantly alter the fate of TikTok in the country. This bill, which you will know about, mandates that ByteDance, TikTok’s Chinese parent company, divest the social media giant or face an outright ban. President Biden’s endorsement of the bill makes the message clear: National security concerns are pushing governments to take unprecedented steps in digital governance.

What would a ban mean for brands?

A ban on TikTok would cause major disruption.  The app has become a vital platform for creators, small businesses, and major brands. These groups have built audiences and marketing strategies for TikTok's short-form videos. Additionally, TikTok Shop, the in-app shopping feature launched last year in the U.S., has established TikTok as a significant player in social commerce. TikTok is the second most popular social shopping platform among young consumers, behind only Instagram. 

Beyond shopping, TikTok's impact is undeniable. According to a report by Oxford Economics, TikTok contributed a significant $24.2 billion to U.S. GDP last year. Even more impressive, it generated $14.7 billion in revenue for small businesses and supported over 224,000 jobs. With over 170 million active users in the U.S. alone, TikTok boasts a massive audience for businesses to reach.

This road isn't a short one, though. The U.S. government cites national security risks as the primary driver for this legislation, highlighting fears that the Chinese government could access or manipulate data from American users. This is compounded by concerns about TikTok's ability to influence public opinion through its algorithms and content curation processes. The bill proposes a divestment timeline for ByteDance, giving it nine months to comply – with a potential three-month extension by presidential discretion.

TikTok has become an important platform and vast marketplace where brands connect with huge audiences, particularly with the most sought-after: Gen Z. A ban or significant change in ownership could disrupt plans for brands, creators, and influencers. It's critical to consider contingency plans, and assess whether brand marketing programs are diverse enough among different platforms and media. TikTok, after all, isn't the only popular social network.

What does this mean for social media marketers?

For social media marketers, this underscores a critical lesson: the importance of diversifying your social media strategy, especially in the realm of short-form video content. While TikTok has become a dominant platform, relying too heavily on any single channel is rarely (if ever) a good idea. 

Now is an opportune time for brands to explore and invest in other platforms and emerging alternatives that complement their existing strategy. This might not be the first crackdown of its kind, and having your brand present on many platforms is a sensible way to future-proof against anything – including a possible U.S. TikTok ban.

What about creators?

A potential upheaval at TikTok could be pivotal for creators. The platform has been a major launchpad for transforming creative passions into livelihoods and careers, especially since its algorithm amplifies niche and underrepresented voices. A ban or ownership change will disrupt this in some way.

Similarly to brands, creators should consider diversifying their presence across other platforms, digital media, and fan-funded models. The goal is to safeguard their careers from platform volatility, emphasising the importance of owning the audience directly.

What’s next

The situation is still unfolding. While these measures have been passed, a complete ban on TikTok is still being determined. The law focuses on forcing a sale (divestment) of the app by its owner, ByteDance, not an immediate ban. ByteDance can challenge the law in court, potentially delaying or entirely preventing a ban.  In the coming days and weeks, we'll see how the news develops and how Bytedance, China, and opposing parties react. For now, it's a waiting game to see the full impact of these actions.

The move also reflects a broader trend where countries increasingly assert their sovereignty over digital spaces, echoing similar concerns and actions against other Chinese tech companies like Huawei. This step by the U.S. could lead to retaliatory measures by China or inspire other countries to examine foreign control over social platforms and other digital media. We're watching closely to see what happens next. Still, the journey from legislation to implementing a TikTok ban or ownership change will likely be long, fraught with legal challenges and complex negotiations.

To learn how our team can help with your social media strategy and content, visit our website or email hello@battenhall.com.