Unpacking the Latest TikTok News, and What it Could Mean for Marketers

?? Read on the New Engen Insights Hub

What’s Happening

Once again, Americans are being confronted with the possibility of life without TikTok. On Wednesday, the House of Representatives passed a bill that, if approved by the Senate, would force TikTok to either divest from its Chinese-owned parent company or accept a total U.S. ban.

So, how serious is this latest threat? The simple answer is,

1. It’s the most serious move levied against TikTok by the U.S. government thus far.
2. If the bill survives the uphill battle that awaits in the Senate (whenever that may be), it will probably be met with an onslaught of legal challenges on the other side.

How We’re Treating the News

In Digiday’s coverage of the potential ban, New Engen VP of Digital Marketing, Kevin Goodwin , shared that this “feels like the most legitimate threat to [TikTok] from our point of view, and so whereas previously, our response was, ‘let’s wait and see,’ I think now I would say our response is, we’re starting to have conversations around the implications of this and the ramifications of it.”

At present moment, we are not advising our clients to take action or reinvest their marketing dollars elsewhere. In one case, a client planning for a major upcoming sale questioned whether they should proactively pull out now in preparation. However, our current MO (informed by guidance from our partners at TikTok) is that it’s too early to make any moves, especially considering the 6-month period built into the bill.

Important Considerations

1. Will TikTok sell? Will anyone want to buy it?

"Even if we’re inching closer to a TikTok ban, a full on shutdown is improbable," says Justin Hayashi , CEO at New Engen. "There’s too much money tied up in TikTok, including from U.S. investors. What we’re more likely to see, and seemingly the intent of the bill that recently passed in the House of Representatives, is the sale of TikTok to a U.S. owner. It’s too early to say who that might be, but a company like Oracle could make sense given their existing relationship, or potentially a group of investors."

One outcome we don’t expect to see, however, is an acquisition by one of TikTok’s primary competitors, Meta or Google. While both companies would no doubt jump at the opportunity to add TikTok to their social media arsenal, any such move would likely draw substantial regulatory scrutiny.

2. Which platform(s) will fill the vacuum?

It’s reasonable to assume that Meta would benefit greatly from an all out TikTok ban. Facebook and Instagram Reels could be the answer to a sudden void in the video content landscape, for users and creators alike. eMarketer loosely estimates that Meta could snatch up about a quarter of TikTok’s U.S. ad revenue - and calls out YouTube and Google as additional key players with the most to gain.

Of course, we can’t know for certain if Meta’s platforms and interfaces will be enough to attract users, creators, and advertisers en mass. But we’ll be watching closely to see how this plays out in every channel, from Meta and Google to streaming services and retail media, and whether or not an emerging channel attempts to shake things up.

3. What happens to creators?

Here’s how Heather Nichols , CEO at Acorn Influence, a New Engen company, is thinking about the news and what it could mean for creators:

“As TikTok faces another potential ban in the U.S., it makes sense for creators, marketers, and brands to be immediately concerned. However, we’re not. If the bill passes the Senate (big ‘if’), it’s unlikely to happen quickly. On top of that timeline is the 165-day period that is incorporated for ByteDance to divest. In other words, we have a road ahead that allows time for strategic planning versus a rushed, reactive response. In fact, I spoke with Modern Retail’s Julia Waldow about this, this week. There are strategic options.

But what exactly does that road look like? For our network of more than 25,000 creators (small business owners), it means education and support. We’re taking steps to proactively educate our influencers on how to build their audience and strengthen their content across other platforms. Additionally, we're supporting those who have predominantly or exclusively focused on TikTok to find brand-aligned opportunities with Instagram Reels and YouTube Shorts. We will vet and invite these influencers to brand campaigns that align with their audience, their expertise in short-form video content, and, most importantly, enable them to sustain their businesses. #CreatorContinuity

For our brand partners, there is no immediate impact on campaigns currently live and/or those wrapping in the next 165 days. Outside of those campaigns we’re actively building strategic recommendations (per category and brand) that reflect their holistic goals while leaning into Instagram Reels and Youtube Shorts. Both of these channels – and particularly the latter, as of late – have proven to drive powerful engagement.

TikTok undoubtedly has a magical algorithm that allows pieces of video content to surpass expectations of a creator’s actual following numbers, leaving an engagement void to fill if TikTok is removed from our devices. In the meantime, we’re here with 10 years of earned sequential learnings from other market disruptions and massive shifts (2020, anyone?). Brands will continue to benefit from the power of social media platforms and the demand for influencer content will continue. Our expertise will unite creators and brands with successful strategies, regardless of the platform. We got this.”