NEW YORK, Jan 16 - Advertisers heavily reliant on TikTok as a key digital marketing tool scrambled to develop backup plans this week as the realization sank in that the popular Chinese-owned social media app might not be salvaged before a crucial deadline.
One marketing executive termed it a "hair on fire" moment for the advertising industry, following months of expectations that a resolution would emerge to keep the short-video app operational.
"It seemed unimaginable as recently as a few weeks ago to consider the possibility of TikTok not being available," said Kerry Perse, founder of the marketing agency Influence & Inspire Consulting and former head of social media at Omnicom Group's OMD.
"We all believed that any disruptions to TikTok would unfold gradually," she added.
Chinese tech company ByteDance faces a Jan. 19 ultimatum to sell TikTok's U.S. operations or face a ban on national security grounds, potentially impacting its 170 million American users.
TikTok is poised to pull the plug on the app this Sunday unless there is a last-minute reprieve, as reported by Reuters on Wednesday.
U.S. President-elect Joe Biden's incoming national security adviser has expressed intentions to take action "to prevent TikTok from going offline," although the legal authority to do so under the current administration remains uncertain.
"I think after a prolonged period of skepticism, we might actually be facing a real threat," said Craig Atkinson, CEO of the digital marketing agency Code3.
In the event of a ban, over $11 billion in annual U.S. ad spending would be up for grabs, according to a projection by the marketing firm WARC Media.
Most of this budget is expected to shift to more established platforms for short-video ad campaigns such as Meta's Instagram and Alphabet's YouTube Shorts, sources at four ad agencies informed Reuters.
TikTok employees appear to be uncertain about the fate of the app beyond Sunday, though favorable refund terms have been offered in case services are interrupted during ongoing campaigns, according to sources. TikTok did not respond immediately to requests for comment.
Ahead of the potential ban, the company has continued to introduce new features to attract advertisers, including a tool set to launch in trial mode to simplify the creation and management of advertisements in bulk. The company also planned to present at the World Economic Forum in Davos, Switzerland, next week after hosting events at the Consumer Electronics Show in Las Vegas earlier this month.
In the meantime, brands and creators have been downloading their data en masse to safeguard their content in case the app becomes inaccessible on Sunday, hoping to salvage their work to some extent.
One influencer, known for promoting cereal and beauty products in her videos, shared a post on Tuesday advising her nearly 16,000 followers on how to download their videos to prevent losing their content.
“This is how you can download your TikTok data to save all your content from the past five years," said Maria Slate, sporting a grimace as the words “it’s fine I'm fine” appeared above her head.
This marks a shift from the prevailing sentiment last month when there was no rush to reallocate marketing budgets away from TikTok, despite a U.S. appeals court upholding the law requiring divestment or a ban.
As of Jan. 8, ad spending on TikTok was projected to surge by 57% in the first two months of 2025, according to Guideline.ai, a firm that tracks forward booking data from major ad agencies.
TikTok has emerged as a pivotal tool for advertisers looking to engage with young Americans, expanding to 20% of U.S. social media ad spending from just 2% in its inaugural full year of operation in 2020, per Guideline.ai.
Its influence stems from fostering influencers and nurturing an online shopping environment, making it a potent driver of e-commerce sales.
Research from E-Marketer forecasts that by the close of 2024, some 43.8% of U.S. TikTok users would have made a purchase through the platform, surpassing the rates on Facebook and Instagram.