TikTok Banned(?)

The US Senate just passed a bill forcing TikTok to sell ownership or face a ban due to the risk that it’s a propaganda tool for the Chinese government. Here are some of the key details of how we got to this point:

ByteDance, the startup behind TikTok, is likely to challenge the US decision in court. Their chief defense: First Amendment rights.

They have a good track record with this tactic. Donald Trump, while in office, tried to force its sale or ban and failed because federal judges saw it as an attempt to shut down a platform for expression. Next, Montana tried to ban TikTok due to its ties to China, but failed for similar reasons.

Texas banned TikTok from its state-owned devices. US professors were the ones to challenge the ban as it stopped them from studying an important social phenomenon, but the ban was upheld.

It remains unclear how TikTok will divest its US operations from the rest. Will they hand over their algorithm? Even if they wanted to, they don’t get the final say. China keeps a tight grip on its technological advantages, which it considers a matter of national security, and has laws in place to block IP export.

What if the bill passes?

Bill D’Alessandro laid out an interesting scenario.

China could put the US government in a tricky position by refusing to sell, says Bill.

The US would then be forced to ban and face the ire of its 170 million TikTokers, whose propensity to go viral is higher than most. All this while going into an election, no less.

The other option is letting them stay after they refuse. This sets a horrible precedent, and the US looks weak. Either way, they lose.

Sam Ross (@SpamRoss), founder of Numeral, says the TikTok news isn’t great for DTC brands:

Think about diversifying your channels from TikTok

If you read our issue from two weeks ago: “Beyond the Metaverse”, you know brands like Brez have met wild success on TikTok leveraging TikTok Shops and affiliates. But Brez also has eggs in the Meta basket.

DTC brands relying too heavily on TikTok need to start thinking about diversification now.

While the algorithms guiding products like Instagram Reels and Youtube Shorts aren’t nearly as powerful as TikTok’s (yet?), you can be sure both Meta and Google will jump into the void left by a departing TikTok. Many professional creators on TikTok will likely flee to these alternatives, rather than simply going down with the ship.

Prepare for more expensive Meta Ads

Meta’s average price per ad has been rising steadily since Q1 2023 and it doesn’t show any signs of slowing.

Were TikTok to go, Meta would likely soak up a lot of the traffic and ad activity, further increasing ad price in response to demand.

Expect a culture shift

TikTok is more than just another place to advertise. The culture on the platform is markedly different.

If its users were to migrate to Instagram, things wouldn’t be as simple as “we’ll reach them there with run-of-the-mill IG marketing.”

TikTok users will want to reproduce what they had wherever they end up.

This might cause a shift in the type of content that appears on different platforms, and thus what kind of ads work in those places.

DTC operators who keep an ear to the ground could capitalize on the shift, but those overly reliant on TikTok for sales or virality could be in tough.

Takeaway: A TikTok ban could cause a big shift in who wants to see what, and where. Keep an eye on IG Reels and Youtube Shorts since short-form video seems to be here to stay, even if TikTok isn’t.

Hey, maybe “X” will re-launch Vine?