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Addressable TV TikTok Media Planning and Buying

If TikTok does get banned, where will advertisers go?


By John McCarthy, Opinion Editor

March 30, 2023 | 10 min read

As talk of the app being banned gains momentum, we catch up with marketing experts to find out where they see ad spend going instead.

TikTok logo restyled as an eye

If TikTok gets banned, advertisers will move to these platforms / Adobe Stock

TikTok offers five main ad formats, that is in-feed ads, top-view ads, brand takeover ads, Spark Ads and branded hashtag challenges. Most of these formats incorporate social video which is due to see further growth in spend. Magna Global estimates that short-form video ad spend will grow by 10.4% in 2023 to reach $18.3bn.

After a rocky appearance at Congress, the future of the app in the US is in the air – although there’s still room for the app to appease the government and many more around the world banning it from devices.

For advertisers looking ahead, social media apps have long cannibalized each other's features – budgets could be moved easily enough if forced as a result. Instagram Reels, Snapchat Spotlight Ads, YouTube Shorts Ads, and Facebook Stories are some that could host short-form videos. YouTube Shorts alone hit 50bn daily views earlier this year; it was at a mere 30bn in the first quarter of 2022. The competitors have the scale, they just don’t yet have TikTok’s buzz or arguably, its current cultural cachet.

As it stands, many marketers are openly keeping their faith in TikTok according to one survey of 300 US marketers, three in four marketers expect to increase spending on TikTok in the next year. This could be them keeping the faith, or it could be an example of businesses keeping their heads in the sand. That remains to be seen.

TikTok’s US net ad revenues could double in two years to $11bn in 2024. Its 2022 2.4% share of US digital ad spend is comparable with YouTube’s. And it already outpunches Twitter, which itself has proven contentious to advertisers. Meanwhile, data published by the World Advertising Research Center (Warc) says TikTok will reach $15.2bn in global advertising revenue in 2023. A third of that will come from the US.

And as for influencer marketing spend, data released in July 2022 indicates that TikTok took $774.8m in 2022, overtaking Facebook – and soon YouTube by 2024 –leaving it in second place only behind influencer behemoth Instagram. Influencers have been advised to maintain a presence across multiple apps to insulate them from the travails of giant platforms as best as possible. Most will likely double down on the tried-and-tested apps.

What the experts say...

Jasmine Enberg, principal analyst at Insider Intelligence’s eMarketer, warns “marketers who rely solely or primarily on TikTok [should] think about how and where they can diversify their spending.” That’s even if it isn’t banned.

She reckons Instagram Reels and YouTube Shorts, could be the “next best thing”. Furthermore, she warns against over-indexing in short-form videos – it’s not all Gen-Z engages with.

James Townsend, chief exec of Stagwell’s Brand X Performance Network and global chief exec at omnichannel media agency Assembly, tells The Drum: “We are in a wait-and-see game and we don’t believe marketers should pull back on day-to-day investments yet. The benefit of digital channels is they are both nimble and real-time and can be paused based on day-of market dynamics.”

UM Worldwide‘s Joshua Lowcock rightly points to the heart of the issue – TikTok’s not the only social media with a questionable track record on data protection, Google and Facebook have taken reputational hits and fines for just that. “It’s time to reckon with the fact that big platforms all collect and use data (almost) the same way. In very plain terms, we are in an information economy, dealing with data infinity, accelerating into the digital age.”

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With these claims, we come out from the intense focus on TikTok to the broader issue, that brands will have to scrutinize how they are reaching people regardless of platform.

Writing on The Drum, Ed East, global chief exec and co-founder of Billion Dollar Boy remains “bullish” on TikTok’s ability to find a compromise and solve its issues but for “those brands that are concerned, we are recommending that they pivot to readily available alternatives including Instagram Reels and YouTube Shorts”.

Meanwhile, Melanie Kentish, managing partner at Gleam, admitted that brands are caught between a rock and hard place. “There are huge audiences on TikTok and if you look at the return on investment in terms of reach and impressions, it’s cheap media,” she explains.

Kentish is seeing brands spend less on TikTok as budgets tighten and marketers get more risk-averse. “What would have been an Instagram and TikTok campaign will typically then turn into an Instagram with TikTok being dropped rather than it being around,” she reveals.

And finally, Shiv Gupta, managing partner at U of Digital, posits: “If TikTok somehow were to get banned, there would be massive, widespread implications, particularly on the ad industry,” Gupta says. He suggests that competitors such as Snap and Meta “would get a meaningful revenue bump.”

Could spend move out of social video?

There's another element to consider. Marketers might see the TikTok ban as a hint as to where the tide is going, with social media coming under the regulatory cosh. While it's often the case, brands and agencies with the capabilities don't have to invest in like-for-like media to reach a Gen-Z audience.

They could move spend out of social video to try out the likes of live video on Twitch, they could get deeper into the filters, gamification and experiences on Snap and Instagram. Meanwhile, many a marketer are looking at how to best capitalize on booms in retail media and CTV and may decide that contentious social apps are worth less trouble than they once were.

Meanwhile, Sarah Penny, content and research director at Influencer Intelligence, confirms that brands are "continuing to invest in the platform". If there is a ban, there's a real gap in the market. "It leaves a space for another platform that can either mimic the virality that set TikTok apart or that can quickly rise in popularity and compete against the major players in a novel way."

Most impacted are the influencers. "The appeal of these influencers to brands is in the number of views their content clocks up and this is a key difference between TikTok and other platforms, where follower size plays a larger role." Brands can take gambles on smaller, talented influencers on the platform and that's resulted in some real wins for the sector. Could that be replicated?

Andrew Stephenson, director of marketing EMEA and India at Treasure Data, says: that “the platforms that are collecting the most data from Gen Z are ultimately the ones who facilitate the most engaging, entertaining and honest content. TikTok ushered in an era where users can easily engage with high volumes of content, allowing the platform to collect more data than ever before, and it’s no surprise that the likes of YouTube and Instagram quickly followed suit.”

There’s a ‘but’ coming. “Social platforms tend to over-index on behavioral data points, which allow them to capture the momentary zeitgeist but lack the insights that build robust marketing strategies and brand loyalty for the long-term.

“More and more brands are looking to piece together the full picture of Gen Z, and are realizing the benefits of collecting first-party data as central to this. It's no surprise then that the cracks may be beginning to show.”

For more insights, the odd joke, and the opportunity to contribute, subscribe to The Drum's Media Agency Briefing.

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