Advertisers leveraging TikTok to reach younger audiences are developing contingency plans to migrate to competing platforms if legislation mandating the divestiture of TikTok comes into effect, leading to a change in ownership or a ban in the US. They are currently awaiting indications from the Senate which will impact their marketing budgets.
The Beneficiaries and the Consequences of the Legislation
Advertising experts believe that Meta Reels and YouTube Shorts, being the main competitors, would greatly benefit from this new law. The bill introduced in the House of Representatives is perceived as the most substantial threat TikTok has ever faced, and advertisers are closely tracking the development. Advertising agencies advise their clients to pause before altering their TikTok strategies since the US has been attempting to limit its operation since 2020.
The Decisive Aspect of Advertising Budget and Content Strategy
Advertising budgets are planned several months ahead, but brands promptly post their content, responding to the current agenda. Videos on TikTok can quickly set trends in music, fashion, and beauty industries, making the platform appealing to brands aspiring to form part of significant cultural events. Analysts from Insider Intelligence anticipate TikTok’s advertising revenue in the US to be $8.66 billion this year. Given the considerable stakes, experts deem a complete ban on such a platform in the US as unlikely, but a proposed six-month time frame in the bill would give advertisers sufficient time to prepare.
The Uncertainty Regarding Efficiency of Other Platforms
Even if marketing budgets are diverted to Reels and Shorts, there is no guarantee that their efficacy will match that of TikTok. It is unclear whether TikTok’s user base would migrate to these platforms.
