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Big Brands Reduce TikTok Ad Spending Ahead of US Removal

With the U.S. TikTok sell-off bill still in place, which could see the app removed from America as of January next year, advertisers are already considering their options, according to new insights.

As reported by Adweek, overall TikTok ad spend declined in both April and May, while four of the platform’s biggest spending advertisers have significantly reduced their TikTok ads focus in recent months, according to insights from MediaRadar.

Among the biggest declines, Target has reduced its TikTok ad spend by 30%, DoorDash has slashed its TikTok spending by 25%, while Bayer (-20%) and Procter & Gamble (-10%) are also shifting their focus.

Which makes sense. If TikTok is indeed going to be exiting the U.S., then brands, logically, will need to look elsewhere in future, and as such, they may well be hedging their bets now, and shifting away from TikTok promotions ahead of a broader change.

So does that mean that you should also be reducing your focus on the app?

Well, there are a couple of ways to look at this.

For one, TikTok remains hugely popular, and while you have access to that audience, you should probably capitalize on it. Reduced ad spend from the bigger players could also mean that there’s more opportunity, and less competition, so in the short term at least, it makes sense to keep pushing TikTok promotions, and seeing what results you get.

At the same time, increasing your reliance on a platform that may soon be gone could be problematic.

If you come to rely on the results that you get from TikTok promotions, that could be hard to take in six months’ time, if it does exit the U.S., leaving a potentially significant hole in your performance data as a result.

Which is why the big teams are changing focus, to soften the blow if the platform is soon gone.

Is TikTok actually going to get banned?

Well, right now at least, it is looking like it. TikTok has launched a legal challenge against the U.S. Government’s sell-off bill (important to clarify that this is a forced sell-off, not a ban, as such), but legal experts are mostly of the view that this will not succeed, due to the government invoking national security concerns. The only other option would be a sell-off, which Chinese officials have publicly stated is not going to happen, so on balance, as it stands at this stage, it does seem like TikTok is going to be existing the U.S.

But then again, if Donald Trump is re-elected in November, that could swing things TikTok’s way once again, with Trump voicing his opposition to the TikTok sell-off bill.

It’s unclear if Trump could or would reverse the sell-off order, but there are seemingly still a few options that could change TikTok’s fate.

Till then, however, it’s a judgment call. TikTok offers great reach and resonance for the right ad campaigns. But I wouldn’t be putting too much reliance on any one app.  

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