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Editor’s note: The US House on Wednesday March 13 passed a bill that would ban TikTok nationwide unless its Beijing-based parent company ByteDance sells it.
Giana Carli didn’t set out to be a TikTok star. The 27-year-old actress was working comedy stages in her hometown Chicago when COVID erupted and forced her into quarantine. Not wanting to let her creative expression flounder, Carli turned to social media, creating and posting short humorous skits to fill her time.
A short while later, her passion turned into a full-fledged side hustle with brands like Amazon, Bloom Nutrition, Kayak, and Qdoba paying her $1,500 to $2,000 a pop to produce videos promoting and pointing to products they sell.
So, Carli is less than thrilled with talk of a TikTok ban in the United States because of the platform’s perceived ties to the communist Chinese government. To put it delicately, she says “it would suck” for her and other Americans who have built entire e-commerce businesses on the platform.
“It would really not be great for me to lose the thousands of dollars I make on TikTok,” says Carli, now a Los Angeles resident, who has 243,000 TikTok followers. “That’s my monthly rent. So yes, I’d be bummed if it went away.”
E-commerce powerhouse vs. US lawmakers
Carli is just one of thousands of creators and sellers who would be impacted by a TikTok ban. After merging with Musical.ly and launching in the United States in 2018, TikTok quickly surpassed Facebook, Instagram, Snapchat, and YouTube by amassing more than 150 million monthly US users.
What’s more, brands reportedly spent more than $11 billion to advertise on the platform last year, more than double the $4 million they invested in 2021. Amazon, Google, Disney, Hulu, and Samsung were the top five advertisers in Q3 2022, a Sensor Tower report found.
Despite all this e-commerce activity, state and federal lawmakers have been aiming to ban TikTok over concerns parent company ByteDance could share sensitive user data with the Chinese government – a possibility TikTok refutes. In fact, the Biden administration in March demanded TikTok’s Chinese owners divest their stakes in the company or face a possible ban.
Meantime, several bans have already been enacted across the country, including:
- In Montana, which this month became the first US state to outlaw TikTok for all residents.
- On federal government-issued devices in the United States and Canada.
- On government-issued devices in more than 30 U.S. states.
- On dozens of college campuses, such as the University of Texas at Austin, Auburn University, and Boise State University.
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Despite potential ban, brands sticking with TikTok
Even with these continuing threats to prohibit TikTok from government and consumer devices, advertisers are still spending on the platform – at least for now. They’re reluctant to give up these TikTok benefits:
- It attracts the young people marketers like to target because there are so many of them and their spending power is considerable. According to a survey by Jungle Scout, a SaaS tool for online sellers, 43% of consumers in the Gen Z demographic group begin their product searches on TikTok.
- Its algorithms are top-notch. They enable a level of audience microtargeting that other social apps can’t yet fully match, says Jeremy Boudinet, VP of growth at Ubiquitous, an agency connecting sellers with rising social media influencers. If users spend a few seconds watching certain types of videos, like travel or cosmetic recommendations, they’ll keep seeing similar content whereas other users may never see those clips at all. “I feel like Instagram is starting to get there, but it’s nowhere near as niche or tailored as TikTok,” says Boudinet.
- The economics make sense. Marketers don’t have to pay creators much for compelling videos that drive traffic back to their sites. Indeed, about 40% of TikTok users consider themselves likely to make purchases directly from the app, and that percentage is even higher for millennials at 50% and Gen Zers at 68%, according to a Jungle Scout study. When a video goes viral, some Amazon sellers have seen revenues spike more than 2,000%, the report found.
For sellers that rely on TikTok, an expanded or complete ban would deny them access to a vital part of their target audience and hurt their ability to promote and sell products, says Mike Scheschuk, president of small and medium business at Jungle Scout. But he says it’s likely their advertising dollars will just shift toward alternative platforms, such as Meta’s Instagram Reels, You Tube (Shorts), and Google.
“I don’t think people should significantly cut back on TikTok until there is a clearer decision coming out of Washington D.C., but it makes sense to branch out to other apps,” Scheschuk says.
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The creator economy braces for impact
Creators also would be advised to branch out beyond TikTok, says Boudinet.
“A lot of creators are already diversified to some degree on YouTube and Instagram,” he says. “I think if TikTok goes away, they’ll find other work because the creator economy genie is out of the bottle and is going to continue exploding.”
Tyler Bender, a 20-year-old Denver-based actress, comedian, and creator agrees.
She’s worried about a ban because TikTok has been “a really, really good creative outlet” for her humorous posts, and she’s built a following of 239,000 people with 32.2 million likes that would be difficult to let go. Plus, if TikTok disappears in the US, her social media revenues would “definitely take a hit.”
She’s earning $7,000 to $15,000 a month as a side job between what she’s paid from TikTok’s updated creator fund, called the Creativity Program, and from the user-generated content she produces for brands like CASETiFY. She’s concerned alternative platforms might not be as lucrative, which could make it harder to pay the bills in the high-priced Mile High City.
Still, Bender is optimistic that by diversifying now she can head off potential trouble later.
“If TikTok got banned, it would be hard,” she says. “But with sites like Reels and Shorts copying TikTok’s model, it is a little easier for me to transition.”
