The U.S. Senate has finally followed through on its long-awaited, long-threatened TikTok ban which will come into effect if its parent company ByteDance refuses to sell its U.S. stake by the end of the year. While many remain unsure whether the government will be able to follow through on this legislation, it’s interesting to wonder what impact its absence will have on the wider marketing landscape.
According to the experts? Not much.
For the end user, TikTok is one of their favourite platforms for viewing short-form content. To the commercially inclined, it’s a vast advertising machine that moves enough product that it warps logistics networks that have been in place for decades. According to Statista’s estimates, 3.5% of all the money spent on advertising in the U.S. will be spent on marketing on TikTok. Close to 30,000 companies worldwide advertise over 35,000 brands on the platform, which means that companies spend an average of $318 million on TikTok in advertising, or $954 million per quarter. TikTok’s presence in the U.S. is also nothing short of substantial, with an active user base of 150 million as of February last year. This is up from the 100 million active users reported in August 2020. Market analysts believe that TikTok’s reach rate is as high as 53.9%, given that 45.3% of social media users visit it at least once a month. All this potential however would amount to very little without the influencers who make it all possible.
Despite how they have disrupted the way marketing works in the digital age, the concept itself is not a new one. The idea of influencers has been around for as long as the idea of parasocial relationships: influencers merely being the commodification of this phenomenon. By the time the World Wide Web rolled around, the world was ripe for influencers to dominate the e-commerce sector. Influencers that proliferate platforms like TikTok use their persona and charisma to project a sense of authenticity and relatability to create and foster a parasocial with their audience. Once this relationship is built, it can be used to sell the audience various brands, concepts, ideologies, goods, services, and the like. There are of course questions worth raising about the ethics behind this method of marketing and far more serious questions like the mental health impact of what, in a different light, would constitute an abusive relationship with the audience.
According to Marketing Professor Dina Mayzlin, there are two ways in which influencers transform their platform into an advertising platform. For one, the straightforward approach entails featuring transparent product ads on the platform. On the more shadowy side, influencers feign reactions and reviews to promote a brand as part of a contractual obligation.
According to Mayzlin, “The interaction is almost more of a spokesperson model versus one where there’s a little bit of hands-off approach.”
These provide influencers with their main source of income, given the amounts of money involved and the relative ease of delivery. So what happens when they lose it? And what happens to the brands that promote their products through TikTok?
Very little, as it happens. Both influencers in the modern day and age tend to use a multichannel approach in their work. The reality is that most social media platforms garner a variety of different audiences. TikTok’s audience tends to consist mainly of Gen Zers. It’s not likely they’ll give up using social media simply because their favourite platform disappeared – they will shift their main focus onto a different one or the absence of TikTok will see the creation of a different platform entirely. Indeed, some even speculate that the power vacuum and the sudden disappearance of the behemoth will give newer platforms the opportunity they need to reach their full potential. Existing ones or new, companies will have a stake involved in them, lest they lose out on a potential audience. The best-performing influencers depend on maintaining accounts across a variety of different social media platforms in any case, to benefit from the cross-promotion of their brand. The departure of TikTok from the U.S. market will likely only result in a dispersion of influencers and their audience.
This is of course the real-life playing out of the multichannel marketing strategy that marketing textbooks cannot get enough of. With this strategy, losing one channel of reaching your target audience does not mean that you drop off the face of the planet overnight. Not depending on one channel means that brands can focus on the potential opportunities and benefits that new legislation like the TikTok ban offers. According to the CMO of the customer engagement platform Emplifi Susan Ganeshan (as cited in MarTech), the ban is currently resulting in increased engagement and traffic on the platform.
“Look at engagement rates for our clients on TikTok and, despite the ban coming, engagement rates on those posts are actually ticking up. Brands aren’t walking away from it. They know they still have to be there, they are actually seeing some goodness in the engagement rates going up”, she said.
For a creative brand, this presents the perfect opportunity to go viral with a new #armageddon campaign. For others, this may be the time to keep an eye on the market to make sure they don’t miss out on capitalising on the next big platform on the market.
In April this year, President Joe Biden formally ratified what we now know as the ‘Tik Tok’ ban as part of its new Protecting Americans from Foreign Adversary Controlled Applications Act. The ban, ostensibly formed to prevent U.S. user data from being compromised is speculated by many to be the latest iteration of America’s crackdown of all that is Chinese on the global political and economic scale. However, whether the ban will come to pass is still mere speculation. For one, ByteDance has taken the issue up with the legal system by filing a lawsuit with the U.S. federal courts to have the ban blocked. Eight content creators based in the U.S. have also collectively sued the government citing the violation of their First Amendment right to free speech. Both these legal challenges have the potential to push the ban further and further over the horizon, or to have it thrown out completely.
(Theruni Liyanage)