Brands in the U.S. continued to increase their ad spending on the world’s leading short video platform TikTok despite the ongoing ban discussions among lawmakers. In March alone, ads spending grew by 11 percent.
Reports reveal that these brands plan to continue spending on TikTok, while some advertising agencies have also held back from advising their clients to lower their investments on the platform.
CEO of Billion Dollar Boy (BDB), a global agency delivering advertising for the influencer age, Edward East, disclosed that rather than being nervous by the prospect of a potential ban, his company has seen brands ramping up their investment on the platform. He added that advertisers might have committed some of the March spending before the US congressional hearing.
Ahead of the hearing, a survey by software group Capterra of 300 US marketers disclosed that 75 percent planned to increase spending on TikTok over the next 12 months.
Also, asides from the increase in brand advertisements, it would be recalled that Investors King on March 21, 2023, reported that TikTok recorded an increase in monthly active users in the U.S. amid the ongoing pressure to ban the app in the country.
The social media giant disclosed that it had 150 million monthly active users in the United States, up from 100 million that was recorded in 2020, which saw a 50 million additional increase in users.
TikTok has faced a series of scrutiny by the Committee on Foreign Investment in the United States, which could result in a ban of the app or a forced sale of the company’s U.S. operation. The popular app has been under pressure amid concerns over the handling of users’ data, as the US government cites security threats.
In his first appearance before the U.S Congress on Thursday last month, TikTok CEO Shou Chew was grilled by lawmakers who expressed deep skepticism about his company’s attempts to protect US users’ data and ease concerns about its ties to China. The hearing, which lasted for more than five hours, kicked off with calls from lawmakers to ban the app in the United States.
TikTok’s CEO Chew in his testimony further stressed that the platform is independent from China and play up its US ties. He said, “TikTok itself is not available in mainland China, we’re headquartered in Los Angeles and Singapore, and we have 7,000 employees in the U.S. today.
“Still, we have heard important concerns about the potential for unwanted foreign access to US data and potential manipulation of the TikTok US ecosystem. Our approach has never been to dismiss or trivialize any of these concerns. We have addressed them with real action.”
Much of Chew’s attempts to stress that his company is not an arm of the Chinese government appeared to fall on deaf ears, as several lawmakers interrupted him saying that they do not believe his claims.
If TikTok is eventually banned in the United States it would pose a huge challenge to brands and influencers in the country due to the fact that the platform has been pivotal to their growth and brand awareness.