What are the implications of the potential TikTok ban in the US
Generation look at how the current executive order in the United states could affect TikTok’s stance in the global market.
During the last quarter, TikTok has been under the most intense scrutiny since its inception. Brand safety features and compliance with advertising to the correct age groups have been at the forefront of this, alongside its ability to appease governments on data capture and usage. The developments in the United States have been changing on an ongoing basis and it has led to increased speculation on not just the valuation, but the future capabilities of the platform.
Donald Trump has signed two executive orders that focus on the sale of TikTok across the US, Australia, Canada and New Zealand. The first on the 6th August, was justified by Trump with the following statement “data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information…” The initial order saw significant backlash, with legal action being threatened by ByteDance. The company stated that they will “pursue all remedies” to fight the order and the Chinese government spoke out against Trump. Following this, a second order was released on the 15th of August. ByteDance now has 90 days to adhere; longer to find a potential buyer and to ensure that data is handled correctly.
Two major parties are currently pursuing the purchase, Microsoft and Oracle. For marketers, Oracle would be the most interesting option owing to its prowess in harnessing third party data to deliver contextual intelligence for marketing purposes. If they are able to successfully marry this data with TikTok’s own first party data, it could accelerate TikTok’s internal roadmap and see them become an advertising powerhouse. There will be restrictions as to how these two data sets are managed, but if anyone is going to find a route to market to appease regulation and enhance targeting, then it is Oracle.
Microsoft’s major benefit should they be successful would of course be global reach, but also the aligned motivation of combatting the Facebook and Google duopoly. This could be incredibly challenging for both parties in some of their most profitable territories if successful.
Clearly, takeovers of this scale take time. So in the short term how do we ensure brands benefit from TikTok’s notoriety and continued growth, especially amongst youth audiences. The challenge is that doubts continue regards the platforms use of data, and when you consider the extreme sensitivities of targeting young people online and the potential ramifications of COPPA and GDPR-K compliancy, these are only increased. Until the data has been fully scrutinised and targeting refined to the capabilities of its rival SM platforms, it won’t be a viable partner for all brands when it comes to standard video advertising.
At Generation Media however we have been successfully navigating this with clients to reap the benefits of TikTok’s growth and cost savings for early adopters. Non data reliant broadcast options on the platform offer incredible scale, whilst influencer partnerships remain arguably the safest and most effective way of engaging with fans with an authentic voice.
We will be keenly monitoring the developments abroad, as well as the inevitable audience growth in the UK, as we continue to build case studies for effective campaign strategies. If you’re interested in finding out how TikTok can benefit you brand(s), get in touch today. It can no longer be ignored!
Written By: Felix Lewis