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Advertisers scramble for alternatives amid TikTok

uncertainty

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TikTok faces Jan. 19 deadline for U.S. asset sale or ban

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Ad spending likely to shift to Instagram and YouTube

Shorts

By Katie Paul

NEW YORK, Jan 16 - Advertisers reliant on TikTok as a

major digital marketing tool rushed to prepare contingency plans

this week, as the realization dawned on many that the popular

Chinese-owned social media app may not be saved before a U.S.

ban takes effect on Sunday.

One marketing executive described it as a "hair on fire"

moment for the ad world, after months of conventional wisdom

saying that a solution would materialize to keep the short-video

app up and running.

"It seemed unbelievable even as of just a few weeks ago to

imagine that there would be no TikTok," said Kerry Perse, the

founder of marketing firm Influence & Inspire Consulting and

former head of social media at Omnicom Group's ( OMC ) media

agency OMD.

"We all thought that any access issues to the TikTok app

would be slow and drawn-out," she said.

Chinese tech firm ByteDance is facing a Jan. 19 deadline to sell

TikTok's U.S. assets or accept an unprecedented ban of the app,

used by 170 million Americans, on national security grounds.

TikTok plans to shut U.S. operations of the app on Sunday

barring a last-minute reprieve, Reuters reported on Wednesday.

U.S. President-elect Donald Trump's incoming national security

adviser said the new administration plans to put measures in

place "to keep TikTok from going dark," but it was not

immediately clear whether Trump - who takes office on Monday -

could legally do so.

"I think after a long time feeling like this was a 'boy who

cried wolf' situation, we may actually have a wolf sighting,"

said Craig Atkinson, CEO of digital marketing agency Code3.

If a ban does occur, more than $11 billion in annual U.S. ad

investment would be up for grabs, according to a forecast from

marketing group WARC Media.

Most of that spending is likely to shift to platforms where

advertisers are already established and running short-video ad

campaigns, primarily Meta's Instagram and Alphabet's

YouTube Shorts, four ad agency sources told Reuters.

TikTok staffers appeared to be in the dark about what

exactly would happen to the app as of Sunday, the sources said,

although two of the sources noted that TikTok was offering

favorable refund terms in the event services stop in the middle

of advertisers' campaigns. TikTok did not immediately respond to

a request for comment.

Even as the ban approached, the company continued to pitch

advertisers on new features, like a tool launching in test form

on Thursday that would make it easier to create, modify and add

advertisements in bulk, according to an email from this week

described to Reuters.

It also planned to host a booth at the upcoming World

Economic Forum meeting of political and business leaders in

Davos, Switzerland, next week, after holding cocktail parties

at the Consumer Electronics Show in Las Vegas earlier this

month.

Meanwhile, brands and content creators alike were

downloading their data en masse in case the app becomes

inaccessible as of Sunday, hoping to salvage at least some of

the fruits of their labor.

One influencer, who hawks cereal and beauty products in her

videos, posted on Tuesday advising her nearly 16,000 followers

on how to save their videos.

"Here's how to download your TikTok data so you don't lose

literally everything you've had from the past five years," said

Maria Slate, grimacing, as the words "it's fine I'm fine"

displayed over her head.

The sentiment was a marked change from the dominant mood last

month, when advertisers told Reuters they were in no rush to

shift their marketing budgets off TikTok despite a U.S. appeals

court upholding the law requiring a divestment or ban.

As of Jan. 8, ad spending on TikTok was set to increase 57%

in the first two months of 2025, according to Guideline.ai, a

research firm that tracks forward booking data from major ad

agencies.

TikTok has become a powerful tool for advertisers looking to

reach young Americans in particular in recent years, growing to

20% of U.S. social media ad spending from only 2% in 2020, its

first full year of operation in the United States, Guideline.ai

said.

Part of that power has come from the platform's cultivation

of influencers and online shopping culture, which has made it a

reliable driver of e-commerce sales.

E-Marketer, another research firm, forecast late last year

that some 43.8% of U.S. TikTok users would have made a purchase

on the platform by the end of 2024, a higher share than on

Meta-owned services Facebook and Instagram.