A TikTok Ban in the US Will Also Impact Other Companies

The debate over a potential TikTok ban in the US has been ongoing for months. The Chinese video platform giant is seen as a threat to national security. Congress has ordered ByteDance, TikTok's Chinese parent company, to sell or shut down the app's US operations. Although the original deadline of January 19 has been extended twice, a ban on TikTok would have far-reaching consequences beyond the app itself.

TikTok has grown into a billion-dollar business and a key marketing channel for brands looking to communicate directly with the American public. According to research firm eMarketer, TikTok generates an estimated $15 billion in ad revenue in the US, where the app, with 170 million daily users, is a major source of inspiration, entertainment, and online shopping.

The rise of TikTok has also created an entirely new, thriving industry. Goldman Sachs estimates that there are over 50 million influencers worldwide, with annual growth of 10 to 20 percent. For many, it's a side income, but for some, it's a full-time job with six-figure earnings. Additionally, TikTok Shop, the app's shopping feature, brings China's successful and addictive social commerce model to the West.

Measuring TikTok's exact marketing value is challenging. Analysis firm Launchmetrics uses the 'Media Impact Value' (MIV), an estimate of the financial value of brand visibility through posts, press releases, and influencer activities on the platform. Their analysis of 80 brands shows that TikTok's MIV in the US more than doubles each year and is estimated to reach $2.5 billion in 2024. This growth surpasses that of major competitors like Instagram and YouTube. In the US, TikTok now generates as much marketing value as in all of Europe, the Middle East, and Africa combined.

If the app is not sold, a ban would disrupt the strategies of brands that have spent years building their audience on the platform. A significant portion of the $15 billion in ad revenue would then become available to competitors. eMarketer expects about half of that budget to shift to US competitors like Instagram, Facebook, and YouTube.

Despite the threat, American influencers seem convinced that TikTok will survive. Donald Trump, who is very active on social media and frequently engages with influencers, recently expressed his 'warm feelings' for the platform. Regardless, the platform's influence on marketing, product sales, and trend development will be lasting. TikTok's addictive feed and video content strategy have already been copied by many other platforms.