Digital Horizons

Impacts From The TikTok Ban For Marketers

• James Walker & Brian Hastings

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The episode examines the implications of the 14-hour TikTok ban in the USA, exploring its impact on creators and advertisers. It dives into user experiences, advertising shifts, and the emotional toll on individuals who rely on the platform. 

• Discussion on the TikTok ban's cultural significance
• Brian shares his experiences as a TikTok user during the suspension
• Insights into how content changes when American creators were offline
• Analysis of the emotional impact on users and advertisers
• Examination of advertising dynamics and shifts in budget allocation post-ban
• Speculation on TikTok's future amid potential governmental restrictions

The Digital Horizons Podcast is hosted by:

James Walker - Managing Director WHD
Brian Hastings - Managing Director Nous

Speaker 1:

Welcome back to Brand News, and today we're talking about probably what's on many people's mind in the well, not just the advertising community, but also people just in the world in general. Well, probably not the world in general. There's more important things going on in the world than this actually right now, but everybody that likes to enjoy social media.

Speaker 1:

We're obviously talking about the TikTok ban in the USA, which went down for how many hours? I think it was about 14 hours. 14 hours which really impacted a lot of people's lives. It sounds like, as someone who doesn't use the app daily, I didn't really notice it at all, but really big news. And I guess today we're going to be talking a little bit about it from an advertiser's point of view, because we do have clients who are on there and that's obviously going to be impacting them. But then Brian, who is a massive TikTok user, how it impacted his life over the recent period as well.

Speaker 2:

I got TikTok back in the five days leading up to the January the 19th to witness this cultural event, just to take part in it. So just to report back to you.

Speaker 1:

And also, this is an Australian experience of the American TikTok brand.

Speaker 2:

Yes, that's what we're going to be talking about today, because it sounded quite dramatic for you.

Speaker 2:

I feel like it's more important to get my perspective as an Australian, because we were there after they left. So for an American, they were gone. So the days leading up to this TikTok ban as users on the app let's say not so much advertisers the feeling really was surely not. Surely something's going to come in and save it in time. But the Congress purposefully set the date as the 19th, the day before Trump's inauguration, to ensure that it actually does go down. But, as expected, trump came in and saved it.

Speaker 1:

Looks like a big hero. We were talking about this before and I don't know how everyone just didn't see this happening Like you were saying. Your experience on the platform was everyone was like, oh, it's going to be gone forever and everyone's getting all sad and this. But it kind of just felt like something that could be a very easy win for Trump on a very short timeframe from him becoming president.

Speaker 2:

Well, I think there was some of the media correctly saying this is voted in, so he can't just turn that around. He has in a day with an executive order, but he's delayed it, having to go down with a view to try to turn it around in a bit more time. So to the typical user it feels like, oh, it's back again. But in the lead up to it going down, I think people were starting to realise about two or three days out, oh, this is happening, this is really happening. And then all of these American creators started doing their thank you stories. It's been a wild four years I've reached 10 million of you and then they'd start telling all their deepest secrets and crying to camera.

Speaker 2:

It was a very weird moment on TikTok as the rest of the Commonwealth, let's say Commonwealth countries Canada, australia and UK are watching on going oh, see you guys. Then there was the moment when it actually went down for the States and all of the content on my For you page was Australian, uk and Canadian content and it was refreshing. Not saying there's a problem with the US creators, but they take up so much of the pie of attention on TikTok. Some of their biggest creators are American. So seeing a refreshed For you page with more local focus and with more UK and Canadian-based comedy and entertainment was cool for a little bit. There's been a lot of people during that break and since the Americans came back saying, oh, it'd be nice to have a localised my For you page option so I could see a bit more of these local creators.

Speaker 1:

Isn't the feed really determined by the kind of stuff you follow in the first place? Like I, obviously my feed's going to be quite different to yours, but I do tend to get quite a lot of local stuff.

Speaker 2:

Yeah, I do too. I think, just having it so visibly only local when the American creators disappeared and that might've been a feeling that for a day people liked it and then whether they'd like that ongoing, I doubt, because they're obviously engaging with these American creators, but I do think American creators they get a big boost from local engagement. That then allows it to be spread to 4U pages internationally, whether we like it or not. So you're getting a lot more US-based content, whether you've engaged with it or not.

Speaker 1:

Yeah, and not to discount anything from the feelings of the people who were seeing it go down as well, if that was in their revenue stream. Imagine that was your business that you'd built up over four years and then out of your control. Within a day something may be shutting down your entire revenue or your whole way of generating revenue.

Speaker 1:

So, ken, I guess sympathize with these people who have spent so much time and work. People may discount that, oh, it's just influencers being upset about losing their followers, but the reality is, potentially it is going to have an impact on their way of life and their way of living and it's taken away something that they have actually worked to achieve.

Speaker 2:

Well, I think it's more than influencers. Influencers are a widespread turnout. There's people who built their businesses on TikTok yeah, they might be considered an influencer their businesses on TikTok yeah, they might be considered an influencer, but they're doing what we're trying to do.

Speaker 1:

Yes, you know we're building a personal brand.

Speaker 2:

We're building a personal brand. There's nothing wrong with it. That's what we advise people to do all the time. I think when the US was reactivated and when they came back, the sentiment really is how do we allow this to happen? We there's, you know, 170 million US users on TikTok. How are we allowing our government to take this away from us? That was an inexcusable moment of damaging to the view that they've got these freedoms in the States and that's what they hold so dear, and that that was taken away. So it's great that it's sort of returned to normality. I'm seeing a lot of people shifting to this Chinese app called Red Note.

Speaker 1:

It kind of makes no sense because you feel if TikTok's going to get banned, why wouldn't this other Chinese app get banned?

Speaker 2:

Yeah, I think it was the people's way of saying well, we're going to. If you don't want us to be on this one, we're really going deep into a Chinese-based app and they're shifting to Red Note Into a Chinese-based app. Yeah, and they were shifting to Red Note. And then a lot of Americans on Red Note saying, wow, china looks pretty good, like the cities look clean.

Speaker 2:

Yeah, people starting to go, wow, china's way ahead of what we thought they were and they were being really welcomed onto this Red Note app by, you know, the Chinese population of people on this app. Okay, and then TikTok came back. People are back on the app and everything is back to normal again, but from an advertising perspective, what did you see?

Speaker 1:

Okay, so we've obviously got clients who are advertising in TikTok in the US. So that was a bit of a stress and problem and, being that it was only a short time, not too much of a problem. But what we did experience is an increase in CPMs on meta. So I think in the lead up to it, brands aware of this risk and brands who was heavily spending on TikTok and just run some stats, and there was $12.34 billion spent on TikTok advertising last year in the US alone in 2024. So that is a massive amount of money that most businesses would expect to advertise both on TikTok and meta, money that most businesses would expect of advertising both on TikTok and Meta. But businesses are going to have to go all right.

Speaker 1:

Well, we were spending X on TikTok. Where are we going to invest this money in our advertising? And so Meta's had a big surge and so that's increased the CPMs, which has increased the cost of advertising for everybody now on that platform. So what? I guess in the short term, we're probably going to be experiencing higher CPMs only because businesses are probably going to want to leverage that risk a little bit, Because every time you switch and you increase your budgets drastically within a platform, you're going to have that learning phase. I think what we're going to see is that spend maintain higher on Meta until this is all done. Yeah, Because there is that level of risk that, well, you don't want to just be putting your money into a platform that potentially is not going to be available in the near future.

Speaker 2:

Just to recap on what happens next, trump's executive order gives 90 days for them to really sort it out and to give ByteDance a chance to accept a 50-50 joint venture with American investors. Accept a 50-50 joint venture with American investors. If that happens, then there's a comfort level of the data of the US citizens who are using the app and it can probably stay on. But advertisers who've got their campaigns now set up and their budgets in meta are they likely to pull it and build those campaigns in TikTok? Probably not. They might wait and see what happens, like you said, and that's going to push up those meta ad costs for the next three months and then potentially a few months after, as they trail off those campaigns and it takes time to build out a new campaign and set a budget and split that budget out. Not everyone's just going to rush back tomorrow now that the app's back on.

Speaker 1:

Yeah, yeah, absolutely, and I imagine that's more in terms of new campaigns. Like, I mean, for us it was down. We just reactivated the campaigns, put it back on. But I think if you're planning, all right, cool, what's our? You know, what have we got coming up for? You might be doing an Easter period or whatever in two to three months time. Are we going to be planning and strategizing around our TikTok strategy or are we just going to stay with what the safe bet is, which is in the meta ads platform?

Speaker 2:

Yeah Well, we keep monitoring our meta ads costs and our TikTok ads costs, but I don't see the engagement on TikTok reducing. But it will just have, I think, a short term or few months impact on the advertising rates.

Speaker 1:

And anyone who doesn't have TikTok currently cannot download. The app is also something at the moment, so it's been blocked from the app stores, but you're able to use the app if you've already got it on there. That's as of recording at the moment. So thank you very much for watching today. As we said, we'll keep an eye on it. It's not the biggest news in the world, but at the moment, from a branding point of view, it's definitely what's being talked about a lot in our industry. Thank you.