ICYMI, a bill has been pushed forward by the Republican party that would allow President Biden to ban TikTok for sharing user data with the Chinese government.
Amid security discussions around TikTok’s connection to the CCP, the White House has already announced a full ban of TikTok on government-owned devices; the move has been copied by EU and Canadian officials as tensions between China and the West continue, linked to the Ukraine conflict.
The Deterring America’s Technological Adversaries Act (or DATA Act) directs Biden to potentially ban TikTok nationwide, should the administration find the company has shared private user data with people associated with the Chinese government. If the data has been used to surveil or censor users, Biden would be able to impose additional sanctions against TikTok and parent-company Bytedance.
However, despite concerns, the Democrats are against moving the bill forward, citing the impact it would have on businesses in ally countries. In addition to this, many are saying the bill threatens the First Amendment. By banning TikTok in its entirety, the government would be censoring platforms and stripping Americans of their right to freedom of speech.
TikTok has responded to the bill, saying it would put “a ban on the export of American culture and values.”
While Republicans still hope the bill will pass, it has to make it through a Democrat-controlled Senate. Given the Democrats’ reluctance to restrict TikTok in the US, the bill could still result in TikTok looking very different for US users.
So, what does a potential TikTok ban in the US mean for brands?
The Impact of a US TikTok ban on brands
First of all, if a TikTok ban did come into place, it would only be banned from Apple and Google stores. It wouldn’t be illegal for users to use the platform, but it would be harder to do so, and that effort would likely deter a lot of users from trying.
TikTok has over 110 million users in the US, so brands would lose an engaging platform that targets a large chunk of a population. TikTok in the US is a particularly persuasive platform, with 49% of users having purchased an item from a brand they’ve seen on their For You Page. Content on TikTok includes everything from brand hashtags, organic reviews, and paid sponsorships—and obviously ad spots. The addictive algorithm shows users content it will be interested in to keep them on the platform—a lot of the time this includes branded content. This means brands have been able to spend less compared to other platforms.
Without TikTok, there will be more competition on other social media platforms. This means brands will likely have to spend significantly more on sponsorships and paid media in order to achieve the same reach and engagement as they did on TikTok. It could also lead to brands spending more money on traditional advertising channels, like TV, magazines, and website advertisements—all of which are significantly more expensive than UGC.
Brands would also need to rethink their influencer strategies. TikTok creators have incredibly high engagement rates, significantly higher than other platforms. Micro-creators on TikTok have an average engagement rate of 18%. With the banning of TikTok, these creators would be displaced from the platform and lose the audiences they spent time building and the trust they formed with their followers.
TikTok has also just started testing TikTok Shop in the US. TikTok Shop has proved to be a big hit in the UK and some Asian markets. Banning TikTok would mean that countless brands miss out on the opportunity to profit from the social commerce format—not only that, but creators can earn from promoting the products through TikTok Shop, so they would be restricting potential revenue.
What can brands learn from this?
Whether a TikTok ban does eventually come to the US, there’s a clear lesson to learn. Don’t rely too heavily on one platform.
Of course, it makes sense that many brands have put significant spending and effort behind the platform—it’s where an incredible portion of consumers are spending their free time, not just in the US but across the globe.
However, many brands will be quaking in their boots at the threat of a TikTok ban. TikTok has been exceptional for small businesses when growing a following and building brand awareness. The type of content that performs well on TikTok has created a platform that genuinely entertains as it markets.
TikTok’s Testimony to Save Itself
On 24th March 2023, TikTok’s CEO, Shou Zi Chew, appeared before the House Energy and Commerce Committee to defend the platform against allegations it spied on American journalists.
His testimony touched on TikTok’s consumer privacy and data security policies, the platform’s mental health impact and security concerns about the platform’s parent company, ByteDance. The main focuses of the testimony included: addictiveness, misinformation, children’s safety, mental health, selling data, and data security.
Project Texas is the proposal from TikTok that would move all US data to a third-party cloud that only a team of US residents would be able to access, to create more transparency and security.
A complete TikTok ban is unlikely and would be incredibly complicated. But, the platform is likely to change or face restrictions in some states. So, brands should begin considering how they can support their TikTok efforts in alternative ways.
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