By Katie Paul
Advertisers heavily relying on TikTok for digital marketing scrambled this week to devise backup plans, as the realization set in that the popular Chinese-owned social media app might not be salvaged before a U.S. ban goes into effect on Sunday. This abrupt shift left the marketing industry in a state of urgency, contrary to earlier beliefs that a resolution would emerge to keep the short-video platform operational.
Kerry Perse, a marketing executive and founder of Influence & Inspire Consulting, expressed disbelief at the sudden prospect of TikTok disappearing. The looming deadline for Chinese tech company ByteDance to divest TikTok’s U.S. assets or face a ban has put immense pressure on the app, utilized by 170 million Americans, citing national security concerns.
Although there are efforts to prevent TikTok from shutting down, uncertainties remain as the new administration takes over. Craig Atkinson, CEO of Code3, likened the situation to finally seeing the feared “wolf” after prolonged doubts about the ban materializing.
Should the ban come to pass, a substantial $11 billion in U.S. advertising investments would be redirected, with platforms like Instagram and YouTube Shorts poised to benefit. While TikTok employees are reportedly unsure about the app’s fate, the company is reassuring advertisers with refund options in case of service interruptions.
Amidst the uncertainty, TikTok has been pushing new features to entice advertisers, including a tool for streamlined ad creation. Additionally, data downloads have surged as brands and creators brace for potential access restrictions, seeking to preserve their content investments.
As TikTok navigates a critical juncture, the industry is bracing for significant changes, with advertisers and influencers alike preparing for a possible shift away from the once-dominant platform.
Despite a U.S. appeals court upholding the law requiring divestment or a ban, ad spending on TikTok is on the rise. According to Guideline.ai, a research firm that tracks forward booking data from major ad agencies, ad spending on TikTok was projected to increase by 57% in the first two months of 2025.
In recent years, TikTok has emerged as a powerful tool for advertisers seeking to connect with young Americans. Guideline.ai reports that TikTok’s share of U.S. social media ad spending has grown from 2% in 2020 to 20%, indicating a significant increase in its market presence.
A key factor contributing to TikTok’s advertising appeal is its success in cultivating a community of influencers and fostering an online shopping culture. This combination has solidified TikTok’s position as a reliable driver of e-commerce sales, providing advertisers with a platform to engage with consumers in a unique and impactful way.
E-Marketer, another reputable research firm, predicted last year that a substantial proportion of U.S. TikTok users, approximately 43.8%, would have made a purchase on the platform by the conclusion of 2024. This figure surpasses the purchasing rates on Meta-owned platforms such as Facebook and Instagram, highlighting TikTok’s growing influence in the e-commerce landscape.
Katie Paul reporting from New York. Matthew Lewis editing.
