What the TikTok Deal Means for Marketers

The past couple of weeks have been a rollercoaster of news regarding TikTok and its status within the US market. The saga can be relatively confusing, so let's break it down.

What happened?

Back in August, President Trump issued executive orders banning the China-based social networking app TikTok from operating in the U.S. due to national security concerns over potential breach and misuse of personal data. The popular app with an estimated 100 million users was given a 45-day runway tied to terms of selling U.S. operations to a U.S.-based operator.

After a bidding war between tech giants Oracle and Microsoft, ByteDance, the Chinese parent company of TikTok, selected Oracle to handle web operations and will use Walmart as their official merchandising partner. So far, President Trump verbally accepted the deal but never officially approved it. Secretary of State Mike Pompeo confirmed that the administration is still looking into banning TikTok.

More on the deal 

• The proposed deal would form TikTok Global, a United States based company, and American investors would own a majority of the company. 
• The deal faces more speculation and debate from the U.S.-based parties and international investors regarding who would have more control of the company.

What does this mean to brands?

With the recent turmoil surrounding the app, many brands are on the fence about investing money into the platform's ad units and for good reason. While TikTok may still be a social media powerhouse and the perfect vehicle to reach our target consumers, the official details of the partnership are still under wraps. One of the top questions on marketers’ minds is, what exactly is Walmart's involvement?

With Walmart on board, we’re likely to see better e-commerce and shoppable options on TikTok with direct paths to purchase within ad units. Whether or not those options are specific to Walmart only are yet to be seen. Access to Oracle’s Data Clouds means cheaper operating costs and more targeting options across all of TikTok’s ad units as well. While hypothetical at this point, we may see the cost of some ad units fall due to these efficiencies.

In short…

• The future of TikTok and the new roles and features of Oracle and Walmart are still unknown.
• We may see efficiencies in TikTok’s ad spend and targeting due to the new partnership.

What should brands do now?

Maintaining an organic presence on TikTok shouldn’t be a problem for your brand. According to research firm Sensor Tower, downloads of TikTok rose 12% the Friday after the ban was announced, nearing a rough daily total of 247,000 downloads. Keeping up a steady cadence of posting and leveraging the algorithm to reach consumers is still a smart course of action, considering the rising viewer base as consumers rush to the app before it’s gone.

For now, letting the dust settle seems to be the best option in terms of purchasing ad units. Until the White House officially approves the deal, nothing is finalized and details are still subject to change. However, since they are not officially partnered with the application, utilizing content creators and TikTok influencers seems to be the best way to have a presence, outside of any official brand handles, if you’re still looking for a paid approach.

Our recommendations

• Maintaining an organic presence on TikTok could benefit brands, especially considering the recent surge in download. 
• Content creators and influencers with a strong presence on TikTok are the safest option for a paid approach due to their lack of official ties to the app.