TikTok: would a US ban spell the end for the video-sharing platform?

You’d think that an app best known for dance crazes and lip-sync comedy would be about as apolitical as they come – but you’d be wrong.

TikTok caught up in US-China tensions

TikTok, the short-form video sharing social network, has been caught up in the increasingly tense relationship between the US and China, with President Trump considering a nationwide ban of the app. TikTok is owned by ByteDance, a Chinese organisation which is thought to be the most valuable private company in the world. Many lawmakers across the world are concerned about the security of user data and risks around potential foreign interference. India banned TikTok (and 58 other Chinese apps) at the beginning of this month, saying they posed a ‘threat to sovereignty and integrity’, while Australian Prime Minister Scott Morrison has said that his government is ‘having a good look’ at the platform. It should be noted that all three countries with ongoing concerns about TikTok have difficult relationships with China.

TikTok is hugely popular with the critical younger audience

TikTok was formed in late 2018 as a result of a merger between two other big Chinese apps – Musical.ly, an app for lip-sync music videos, and Douyin, a short-form video platform. It has since grown enormously, reaching the 2 billion download milestone in April this year, making it the most downloaded non-gaming app ever – surpassing even Facebook and WhatsApp. It was downloaded 315 million times in the quarter that ended on March 31^st, the highest number of downloads for any app in a quarter. This is a reflection of its huge popularity as the world went into lockdown during the coronavirus pandemic, and consumers sought light-hearted entertainment and engagement. TikTok’s userbase skews very young: 65.3% of its users in the US are under 29, and 31% of 13-18-year-olds in the UK used the app during lockdown. This youthful, highly engaged audience is a huge lure for advertisers: TikTok is on track to earn $500m in ad revenue in the US alone this year.

Security concerns

However, it’s not all been smooth sailing for the social platform. The current and threatened bans aren’t the first problems it has encountered. TikTok was fined $5.7m in 2019 by the US Federal Trade Commission for illegally collecting personal information from children under the age of 13; as part of the agreement it was also required to delete all videos and data relating to under-13s, something which it is now alleged it failed to do. Just last month, TikTok was one of 53 apps that Apple security researchers flagged were regularly seeking access to a handset’s clipboard. These security breaches have made many uneasy: some government entities in the US have banned staff from using the TikTok app on government-issued phones, while Amazon told employees to delete the app – although it rescinded the instruction later that day.

TikTok will remain popular with advertisers

Some advertising industry figures are wondering aloud whether the threat of a ban will affect advertisers’ attitudes towards the platform, ultimately making that $500m ad revenue target harder to achieve. The general consensus seems to be that it will not. TikTok’s core appeal is its huge, youthful audience: the ability to reach them on a meaningful level is critical for many advertisers. What’s more, it may well benefit from the Facebook boycott. Many brands who normally spend most of their social dollars on Facebook and have chosen to pause their spend with the tech giant in the support of the #StopHateForProfit campaign will be looking to spend their social budgets elsewhere. TikTok’s young audience and recent launches – its self-serve ad platform and TikTok for Business – will make it an attractive alternative. The self-serve ad platform, which allows advertisers to buy and manage ad campaigns directly and access creative tools, flexible budgets and performance targeting could lure small and medium businesses in particular – Facebook’s core revenue driver. TikTok has also pledged $100m in ad credits for small businesses suffering as a result of lockdown.

There will always be an appetite for platforms with a youthful audience

The future is uncertain for TikTok, and its success undoubtedly hinges on the US government’s decision. However, no matter which way the decision goes, TikTok’s very existence and its enormous success show that there is a huge appetite for platforms that appeal to a young audience. If they fall, then the space that they leave will no doubt be filled rapidly.

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