Market Analysis

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As the potential U.S. ban of TikTok looms, advertisers heavily reliant on the platform scrambled to devise contingency plans, realizing that the app might not be saved in time. One marketing executive described the situation as a "hair on fire" moment, as many had long believed a solution would materialize to keep the app running. 

Kerry Perse, founder of Influence & Inspire Consulting and former social media head at Omnicom's OMD, expressed disbelief, noting that everyone had expected any issues with TikTok to be gradual, not sudden. 

TikTok's Chinese parent company, ByteDance, faces a Jan. 19 deadline to either sell its U.S. assets or accept a nationwide ban on the app, which has 170 million American users, due to national security concerns. TikTok plans to suspend its U.S. operations on Sunday, unless a last-minute resolution occurs.

Donald Trump's national security adviser, set to take office next week, indicated that the administration aims to prevent the app from going offline, but it's unclear whether such an action is legally feasible. Craig Atkinson, CEO of digital agency Code3, expressed skepticism about the situation, calling it a potential "wolf sighting" after months of uncertainty.

If the ban proceeds, over $11 billion in annual U.S. ad spend would be up for grabs, with much of it likely flowing to Meta's Instagram and YouTube Shorts, which already host short-video ad campaigns, according to ad agency sources.

TikTok staff appeared uncertain about what would happen when the app shuts down, but reportedly offered favorable refund terms for advertisers in the event of service interruptions. Despite the looming ban, TikTok continued to promote new features, including a tool for bulk ad creation, and planned to have a presence at the World Economic Forum in Davos next week.

Meanwhile, both brands and influencers were quickly downloading their data, hoping to salvage their content in case the platform becomes inaccessible. Influencer Maria Slate, with nearly 16,000 followers, shared a guide on how to save TikTok videos, warning her followers not to lose their content accumulated over years.

This shift in sentiment marks a stark contrast to just a month ago when advertisers were not rushing to move their budgets off TikTok, despite legal rulings supporting the ban. TikTok had been experiencing significant growth in ad spending, with an anticipated 57% increase in the first two months of 2025, according to forward booking data from Guideline.ai.

TikTok has become an essential tool for reaching young U.S. consumers, growing from 2% of social media ad spend in 2020 to 20% in 2023. The platform's strong influencer network and online shopping culture made it a reliable driver of e-commerce sales. E-Marketer predicted that by the end of 2024, 43.8% of U.S. TikTok users would have made a purchase through the app, a higher share than on Meta's Facebook and Instagram.

Paraphrasing text from "Reuters" all rights reserved by the original author.