Despite a Constant State of Crisis, Media Buyers Still Show Interest in TikTok

TikTok is in hot water with the U.S. government, but with its user base continuously growing, media buyers are undeterred. Still, advertisers and agencies are leery about long-term commitments as TikTok’s owners face a looming deadline to sell the app. In this moment of crisis, Blake Chandlee’s job at TikTok is to assure advertisers that everything will be OK. But buyers seemed more convinced to stay because of the power of the platform, not necessarily because of how the company has communicated. Chandlee, vp of global business solutions, said he’s had “very few conversations with CMOs or CEOs of agencies” about the two executive orders signed by President Donald Trump that make it illegal to conduct business with parent company ByteDance after Sept. 20. “The big question that they always ask is: 'Is TikTok going to be around after this executive order?' And the answer to that is: ‘Yes,’” Chandlee said to Adweek last week. “They want confidence that TikTok and our base of consumers will be there for them to engage with.” Chandlee insisted advertisers want to talk more about how the company is “protecting” its “community” concerning brand safety and measurement. They’re “business conversations versus political discussions,” he said. His team reaches out to brands and agencies “whenever some news comes or there's a big headline” and has introduced them directly to the company’s customer safety and security teams when they have specific concerns about TikTok’s data practices. However, media buyers have received varying levels of communication from the company after news broke this summer. One buyer, under condition of anonymity to speak freely, told Adweek that TikTok has been “increasingly communicative” over the past month. Three other media buyers at different agencies told Adweek, under the same conditions of anonymity, that while they routinely work with TikTok, they did not receive proactive messaging from the company. The prospect of increasing that level of communication made a potential merger with a more established media organization appealing, said one of the buyers. TikTok has grown its offerings for advertisers in recent months by investing in its new TikTok for Business brand, creator program for marketers and its self-serve ad platform, a play for advertisers and agencies of all sizes looking to reach TikTok’s audience. “Buyers are totally comfortable working in self-serve platforms, and in many cases, prefer the hands-on flexibility that these platforms provide,” one buyer said. “However, being able to work with a rep on best practices, general troubleshooting, larger program structures, etc., is something that will provide value to new TikTok advertisers.” “Overall, brands are being cautious about the platform,” said Tessa Kavanaugh, vp and group director for social media at Havas Media. “[Brands are] just seeing how everything will play out in the next month or, I guess, week or hour. But overall, they are still interested in the platform.” TikTok just wants you to know everything is OK. All about the users TikTok’s political woes are nothing new. The company faced FTC fines for children’s privacy violations last year, and bans were instituted this year so the app cannot be downloaded on some government-issued phones. But TikTok’s big draw to advertisers is its unique and growing user base. TikTok’s U.S. users more than doubled in six months, from 22 million in January to 46 million in July, according to Comscore. New U.S. downloads have since decreased, however, and are down about 12% in August (5.3 million) compared to July (6 million), according to app analytics firm Sensor Tower. Chandlee acknowledges that user growth is everything. “I wouldn't say [brands are] ignoring the new cycle, but there's so much ambiguity right now that brands are really focused on connecting with users.” Media buyers expressed some reservations about TikTok’s future under new ownership but agreed that user behavior will still drive decision-making regardless of who owns the company—including potential buyers Oracle or Microsoft and Walmart. “You’ve got to follow the consumer,” said Jed Meyer, managing director for North America at media consultancy Ebiquity. “The consumers are still talking about TikTok … that generation doesn’t care if it’s owned by Oracle or the Jedi master.” Market analysts at Verizon told Adweek that the average U.S. TikTok user spent 21 hours per month on the app, up from 14 hours per month in March, based on their forecasts. “We’re media buyers. We look at where we can find our audience,” said Michelle Capasso, group media director at the independent agency Connelly Partners. Especially if that audience doesn’t leave as the company transforms. Thinking short term Most media buyers aren’t adjusting their ad spends with TikTok (at least for now), but they’re sticking to short-term buys. TikTok has been changing rapidly, even before this summer, said Alessandro Bogliari, CEO of The Influencer Marketing Factory, that he always focused on short-term buys, adding that 30-days allows his firm and its clients time to best evaluate the campaign and determine next steps. A month of engagement on the platform could “easily justify spending,” said Barry Lowenthal, CEO of The Media Kitchen. But, he continued, “no CFO would ever allow you to give TikTok a 12-month prepaid commitment.” However, Chandlee said TikTok has secured between 20 and 25 joint business plans (JBPs), long-term ad contracts (some as long as 12 or 24 months), split among global brands and agencies. TikTok, which made its NewFronts debut this year with its slogan “Don’t make ads, make TikToks,” said it even locked down two deals in mid-August after the executive orders were issued. Laura Perez, a spokesperson for the company, wouldn’t name which clients TikTok signed these deals with or specify a minimum length for the contracts but said the brands hail from the tech, CPG, beauty and retail sectors. Fashion brand Asos and film studio Warner Bros. are each in the middle of multiweek ad buys on TikTok, but it’s unclear whether either has a JBP with the company. Open legal questions TikTok can only guarantee advertisers so much, especially with business transactions due to become illegal after Sept. 20. The Trump administration alleges its executive orders are necessary to protect U.S. national security from the Chinese government, with whom the U.S. is engaged in an escalating trade war. TikTok and many experts refute the claims that ByteDance is sharing Americans’ data with Beijing. That pressure has all but forced ByteDance to offload its signature product in the U.S. Meanwhile, TikTok is suing the government over the first executive order, and there’s been a seismic change in leadership, with CEO, former Disney executive Kevin Mayer, resigning after only a few months on the job. But advertisers can take some precautions in the meantime, said Matt Savare, a partner at law firm Lowenstein Sandler, who represents publishing and advertising clients. He said that TikTok contracts should have a change of law provision so parties can opt out if doing business with TikTok becomes illegal. Additionally, companies concerned about who TikTok’s next owner may be can add a clause that lets them opt out if a competitor, for instance, buys the app. Lastly, he said, advertisers and agencies should prepare for a possible interruption of service when the app switches hands with a “transition services agreement.” Perez would not confirm whether TikTok’s contracts included such stipulations. “If you’re releasing a brand new movie or brand new game," you need to have built-in protections in case there's an interruption, Savare said. “And I think the ultimate buyer is going to go out of their way to be advertiser friendly and they’re going to make sure they don’t leave any advertiser in the lurch.”