As the fate of TikTok’s U.S. operation continues to hang in the balance, brands have been forging ahead with campaigns to earn engagement among the coveted Gen-Z set.
The months-long drama over the Trump administration’s TikTok ban had appeared to be nearing its final chapter over the weekend, when Trump said he gave his “blessing” on Saturday to a proposed deal in which Oracle and Walmart would take a total 20% stake in a newly formed company called TikTok Global. On the same day, TikTok released a statement from Vanessa Pappas, its interim head, stating, “We’re pleased that today we’ve confirmed a proposal that resolves the Administration’s security concerns and settles questions around TikTok’s future in the U.S.”
But the dealmaking is far from over. Trump reversed course on Monday, stating that the proposal that Chinese company ByteDance would control 80% of TikTok Global was a no-go, saying, “If they do, we just won’t make the deal.” The Chinese government still has to approve it, as well. Chinese state media commentator Hu Xijin claimed (without a concrete source) that Beijing wouldn’t approve the deal as it stands.
There are currently contradictory statements about who would have majority ownership if the deal is approved. Oracle evp Ken Glueck released a statement on Monday saying that “ByteDance will have no ownership in TikTok Global” with the deal. ByteDance, however, has not changed its statement from Sunday that it would have the 80% stake. In the meantime, the order banning the app from U.S. app stores was extended by the U.S. Department of Commerce by one week to September 27.
“This is a shit show,” said Joe Gagliese, CEO of new media agency Viral Nation, about the deal. “We all kind of pretend to know what’s going to happen, but the reality is, it’s so far beyond our control.” According to him, 20% of Viral Nation’s talent agency roster is comprised of TikTok influencers, while 5% of its influencer marketing agency revenue comes from TikTok campaigns.
Amid all this uncertainty, brands have still been rushing to launch campaigns on the platform to reach TikTok’s roughly 100 million Gen-Z users.
Ryan Detert, CEO of influencer marketing platform Influential, said the main question he is getting from brands right now is, “My campaign can still go live, right?”
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Prior, some brands, especially independent startups, had already shifted sizable portions of their marketing budgets to TikTok. Peace Out Skincare, for example, now dedicates 30% of its marketing spend to TikTok. It recently hired an employee to work solely on TikTok after seeing significant sales growth, thanks to a boost from TikTok influencers like Hyram Yarbro.
“TikTok is our No. 1 priority for reaching our Gen-Z consumer and acne sufferers,” said Peace Out Skincare CMO Junior Pence. “A ban would definitely have an impact on our business.” Despite all of the uncertainty, the brand has already planned out its TikTok strategy through 2022. “We aren’t running ads on TikTok at this point, but we’re actively engaging on the platform and running our own marketing campaigns, which we are only increasing.”
Influencer “CJ Operamericano,” who works with brands including FabFitFun and Byte, said that for her brand deals, “None have been affected as of yet.”
“I think brands are wanting to get their TikTok ads in while they can,” she said. She noted that, if TikTok were banned, she would focus on Instagram and Snapchat, followed by YouTube and Twitch.
But the uncertainty means that many brands are only focusing on using TikTok to hit their KPIs in the short term.
“All of our active campaigns have continued to move forward, full speed ahead, over the past months,” said Evan Horowitz, founder of creative agency Movers + Shakers. “Some brands who haven’t yet started on the app are still waiting to see how everything plays out.”
“If you’re a brand, you’re not going to commit $5 to 10 million of next year’s marketing spend on TikTok if you don’t even know it’s going to be there,” said Gagliese.
Detert noted the looming November 12 deadline in Trump’s new executive order — that’s when American brands advertising on the platform could start being penalized.
“After that date, that would be something where a brand would probably be sent a cease and desist, or some sort of letter saying, ‘Do not proceed with advertising on the platform,’” said Detert. “Most brands — even before that, especially any Fortune 1,000 brands — would probably not plan to run something past that date. It’s definitely something that’s going to affect a lot of budgets and a lot of spend.”
The advice that agencies are giving to brands is the same strategy that they are pursuing: diversification.
“Our advice to marketers right now is to create strong influencer-led, branded content that could live across TikTok, Instagram Reels and Triller, and then just post on all three platforms,” said James Cadwallader, the co-founder and CCO of Kyra TV. He admits that none of these platforms have yet emerged as the winner in the battle to be TikTok’s replacement if it were to be banned. Reels, he said, is “a bit of a Zuck move” and “lacks a certain community and feeling” that TikTok was able to generate. Triller, meanwhile, is “a lot clunkier to use” than TikTok.
“If I had to put money on where audiences would go, it would probably be Triller,” said Cadwallader. “Right now, the fact that the D’Amelios [Charlie and Dixie] and Addison Rae have just joined definitely helps.”
Detert said a big question from brands that don’t yet have a TikTok presence or have only done sponsored content is whether they should start their own branded TikTok account. He suggested to them to wait it out and only do sponsored campaigns for now. “If a ban happens, then no one will be there at some point in the future,” he said.
The uncertainty of the situation means that millions of dollars hang in the balance for brands, agencies and influencers.
“We live in such a world of uncertainty that it’s almost like, at some point, you’re better off not contingency planning and just rolling with it,” said Gagliese.
“For us, it’s disruptive,” said Detert of the business impact. He noted that the contingency plan for his business would be to “replan and change content” to other platforms. He added, that as a result of the Covid-19 pandemic and the Black Lives Matter protests, the company has already been regularly making significant changes to campaigns in a short time frame.
“We’re getting used to it,” he said.