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TikTok ad revenue increases amid ban threats

TikTok ad revenue increases amid ban threats

Advertisers are increasing their TikTok spending despite the threat of a US ban on the Chinese-owned viral video app due to national security concerns.

According to Sensor Tower data, advertising on TikTok in the United States increased by 11% in March, with Pepsi, DoorDash, Amazon, and Apple among the top spenders.

According to several ad executives and agency leaders, brands plan to continue spending on TikTok, which is owned by Beijing-based ByteDance, while leading advertising agencies, including WPP’s GroupM and Omnicom, have refrained from advising their clients to reduce their investment.

Advertisers’ continued enthusiasm comes amid growing security concerns from governments and regulators around the world, with the US government calling for a ban or restrictions.

Last month, TikTok’s CEO was grilled by US lawmakers about national security concerns raised by the company’s Chinese ownership. Beijing has stated that it will “vehemently” oppose any attempt to separate TikTok’s US arm from its Chinese owners.

A survey of 300 US marketers conducted by software company Capterra prior to the hearing found that 75% planned to increase their spending on TikTok over the next 12 months.

Nonetheless, the political uproar has prompted some brands to prepare for a potential US ban by shifting spending to rival platforms such as Meta and Google.

TikTok’s $10 billion in global revenue is primarily derived from digital advertising. According to industry insiders, it has fought for market share over the last year by offering lower advertising rates than Meta and Google, as well as delivering a higher return on investment with newer advertising formats.

According to Insider Intelligence, TikTok’s revenue is expected to reach $14.15 billion in 2023, up from $9.89 billion in 2022.


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