If TikTok goes away tomorrow...
Does a $7 billion ad market go poof? What about creators? And those 150 million people?
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Google is being sued by the Department of Justice. Facebook’s being harassed by the Federal Trade Commission.
Yet I’m assuming, at the moment, both are big time fans of the US Government.
Why the sudden Big Tech Patriotism? Well, both companies would presume to be huge beneficiaries of a TikTok ban. Thus -go USA!
If you can put aside the geopolitics for a second (admittedly, not an easy thing to do) we may be on the verge of seeing something with out anything close to precedent in media and advertising space - something that will send shockwaves across the industry.
A company that claims to reach 150 million people a month, while attracting nearly $7 billion in US ad revenue, may go out of business in an instant.
If TikTok is indeed banned, there are three major questions (for our ad industry purposes):
Where does TikTok’s audience go?
Where do its creators go?
Who gets that $6.8 billion?
Let’s start with the creator question first. What’s interesting about TikTok is that many creators, like Addison Rae, are big in lots of other places. This is often by design.
As Victoria Bachan, President, Whalar Talent, told me on this week’s Next in Marketing podcast. “We work with our creators constantly to have a multi-platform strategy,” she said. “That’s because every platform is different, and every audience is a little bit different.”
For instance, Mr. Beast has nearly 80 million TikTok followers, and he is first and foremost a YouTube star.
“You have to know your fan base and what is doing well and where...Always hope for the best and plan for the worst.”
Makes sense. As one holding company social video leader explained, among the 100 million plus users on the platform, only 0.1% are unique TikTok users.
“There is significant overlap with other social platforms, namely Instagram and YouTube/Shorts, which see 84% and 81% of the same users respectively,” this person said.
Still there are plenty of creators, like Charli D'amelio, who are ‘of TIkTok.’ She has roughly 9 million on YouTube - not too shabby - but compare that to, 150 million on TikTok.
If I’m Google and Facebook, I’m putting aside a pile of funds to throw at creators for as soon as a ban hits. In YouTube’s case, they can even dangle the fact that YouTube Shorts can get you on TV, for what it’s worth.
As for where the audience goes, while many people jump from Reels to YouTube Shorts and back to TikTok, TikTok’s stranglehold on people’s time is measured in ridiculous units. The company says people spend a movie’s length of time each day on the app.
If I’m YouTube, I push people to a stand alone Shorts app tomorrow, sending the signal that if you like everything about TikTok, well, we’ve got a full-fledged replacement ready (and it’s as American as obesity).
Ok, so what happens to the ad market? Where does that money go?
I’ve tried to come up with some sort of parallel to this TikTok scenario and I struggled. Sure, magazines have gone under suddenly, and TV networks have switched identities and demographic focuses, causing some ad dollars to go up for grabs. The closest thing I could come up with was the UPN/WB merger, where an entire broadcast network went away. We’re talking a few million bucks, not $7 billion…so yeah, not even close.
First off, from what I’ve heard from folks in industry, brands are not hesitating to spend on TikTok right now…if anything, they are pumping more dollars into the app and its creators (TikTok even has a NewFront on the calendar in May!). And I realize that by all accounts, if TikTok is banned, there would be some kind of transition period, so all those dollars wouldn’t be freed up immediately.
Still, I’d bet it happens fast. If you’re Procter & Gamble or General Motors, and the US government actually takes the step to ban a Chinese-connected app, are you sticking around to the bitter end?
So what happens next? As one social media from a major holding company told me: “Reach will reaggregate quickly and pricing might become more efficient. Our belief is that capacity and demand will rise concurrently across competitive offerings which means pricing should remain relatively stable for ad inventory. Creators will see declines in reach and will take time to rebuild audiences in other platforms.”
The obvious ‘other platforms’ would be Reels, YouTube Shorts, and likely Snap. It will be interesting to see how Reels fares, giving the relative age of the Facebook/Instagram audience. It will also be worth watching just how much Snap decides to mimic TikTok’s UI and features - its audience size is certainly nothing to ignore.
What about CTV? While I’d be somewhat surprised if TikTok money gets reexpressed on say Disney+ or HBO Max, there would seem to be an opportunity for some of the FAST players to go after these dollars. An exec at Tubi told me recently that the company is already looking at incorporating feed-like interfaces into is on-demand streaming platform.
However, whenever I ask TV buyers whether like YouTube, if TikTok has graduated to become part of the TV dollars consideration set -and the answer is always no. TikTok viewing is just not seen as the same kind of engagement as TV viewing (a point that is certainly debatable).
Still I’d expect some TV players to go after TikTok spending. I’m surprised we haven’t seen any TV companies strike a pro-USA pose and advocate for a ban. After all, regardless of whether you think the Feds are right or wrong, if you’re in media, you want TikTok to go away, so you can get those hours and dollars back on the table. There is nothing more American than ruthless capitalism, with some help from regulators.
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