TikTok Reassures Advertisers Over Ban Threat as Some Set Backup Plans

The U.S., which is concerned about the app’s Chinese owners collecting data on American users and potentially influencing the app’s content, has been applying pressure on TikTok for some time. The latest move marked an escalation by the Biden administration.

In communications with ad executives in recent days, TikTok ad-sales staffers have played down the threat of an outright ban and sought to keep brands from cutting their spending, ad buyers said. The TikTok staffers have indicated they don’t think a ban will happen, the ad buyers said.

In a Friday email to an ad agency that had inquired about the uncertain situation, TikTok discussed the steps it has taken to secure user data, saying, “We are confident that we are on a path to fully satisfy all reasonable U.S. national security concerns.”

On Monday, TikTok sent an ad agency a link to an animated video that touts those data safeguards. The video, which includes images of American flags at various points, lays out how TikTok spent $1.5 billion on “security to prevent unauthorized foreign access to your data and the systems that deliver you content.”

The latest communications follow other moves by TikTok to reassure Madison Avenue in recent months as the U.S. has ratcheted up the pressure.

In a statement, a TikTok representative said the company has been working to engage marketers and agencies in “open, fact-based, and ongoing dialogue” about its efforts to build a trusted platform for users and brands.

“If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access,” the statement said.

TikTok has become a big draw for advertisers, thanks to the viral nature of its content and strong appeal with teenagers. The app has been downloaded more than 4 billion times globally and was the most-downloaded app in 2022, according to research firm SensorTower Inc. More than 150 million Americans are now on TikTok, the company says.

The company is expected to have 2.5% of the U.S. digital ad market this year and its U.S. ad revenue is expected to surge 36% to $6.83 billion, according to market research firm Insider Intelligence. 

Some of TikTok’s growth has come at the expense of

Meta Platforms Inc.

and

Alphabet Inc.’s

Google, which have ramped up their short-form video offerings. Google and Meta together are expected to capture almost 45% of U.S. digital-ad revenue this year, Insider Intelligence estimates. 

Some brands have begun to prepare for a possible ban by coming up with contingency plans for their TikTok ad spending, several ad executives said. 

Advertisers are looking to avoid any disruption to their business, said Diana DiGuido, chief client officer at marketing firm Tinuiti. Brands “can’t have any gaps in performance, so they are looking at where they can replicate the performance they are getting from TikTok,” if the app is banned, she said.  

Ms. DiGuido said some of her clients are spending over $1 million a month on TikTok, a significant amount for a newer platform. Backup plans call for money to be moved to other social-media sites such as Instagram, Alphabet Inc.’s YouTube and streaming-TV platforms. The agency is still recommending TikTok given its strong ad performance in terms of reach and the ability for ad content to go viral on the site, she said. 

Over the past week, advertisers ramped up discussions about finding possible alternatives after the Biden administration signaled that a U.S. ban on the app was a potential outcome, Ms. DiGuido added. 

Some ad buyers said they don’t expect the uncertainty surrounding TikTok to derail ad spending, as many advertisers are taking a wait-and-see approach. 

“We do not like to make any decisions based on assumptions,” said Ivonne Kinser, vice president of marketing for Avocados From Mexico, a nonprofit marketing organization that represents avocado growers.

“We are advising our clients to stay the course,” said Rob Jewell, chief growth officer at ad agency Power Digital Marketing Inc. His clients doubled their annual TikTok budgets in 2022. Mr. Jewell expects his clients to double their TikTok budgets again this year.

“A lot of marketers are getting really good value out of TikTok and if something is performing really well, marketers are typically super slow to try to find alternatives,” said Ben Jankowski, former head of global media at

MasterCard Inc.

TikTok sent ad-agency executives an email earlier this month talking down the risk of a ban in response to the Restrict Act, a bill introduced by Sen. Mark Warner (D., Va.) that would allow the federal government to regulate and ban technology from some foreign countries such as China. 

In the email, which was viewed by the Journal, TikTok’s ad-sales department suggested that if the bill were passed, the Committee on Foreign Investment in the U.S. might grant the company an exception.

Write to Patience Haggin at [email protected] and Suzanne Vranica at [email protected]

The U.S., which is concerned about the app’s Chinese owners collecting data on American users and potentially influencing the app’s content, has been applying pressure on TikTok for some time. The latest move marked an escalation by the Biden administration.

In communications with ad executives in recent days, TikTok ad-sales staffers have played down the threat of an outright ban and sought to keep brands from cutting their spending, ad buyers said. The TikTok staffers have indicated they don’t think a ban will happen, the ad buyers said.

In a Friday email to an ad agency that had inquired about the uncertain situation, TikTok discussed the steps it has taken to secure user data, saying, “We are confident that we are on a path to fully satisfy all reasonable U.S. national security concerns.”

On Monday, TikTok sent an ad agency a link to an animated video that touts those data safeguards. The video, which includes images of American flags at various points, lays out how TikTok spent $1.5 billion on “security to prevent unauthorized foreign access to your data and the systems that deliver you content.”

The latest communications follow other moves by TikTok to reassure Madison Avenue in recent months as the U.S. has ratcheted up the pressure.

In a statement, a TikTok representative said the company has been working to engage marketers and agencies in “open, fact-based, and ongoing dialogue” about its efforts to build a trusted platform for users and brands.

“If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access,” the statement said.

TikTok has become a big draw for advertisers, thanks to the viral nature of its content and strong appeal with teenagers. The app has been downloaded more than 4 billion times globally and was the most-downloaded app in 2022, according to research firm SensorTower Inc. More than 150 million Americans are now on TikTok, the company says.

The company is expected to have 2.5% of the U.S. digital ad market this year and its U.S. ad revenue is expected to surge 36% to $6.83 billion, according to market research firm Insider Intelligence. 

Some of TikTok’s growth has come at the expense of

Meta Platforms Inc.

and

Alphabet Inc.’s

Google, which have ramped up their short-form video offerings. Google and Meta together are expected to capture almost 45% of U.S. digital-ad revenue this year, Insider Intelligence estimates. 

Some brands have begun to prepare for a possible ban by coming up with contingency plans for their TikTok ad spending, several ad executives said. 

Advertisers are looking to avoid any disruption to their business, said Diana DiGuido, chief client officer at marketing firm Tinuiti. Brands “can’t have any gaps in performance, so they are looking at where they can replicate the performance they are getting from TikTok,” if the app is banned, she said.  

Ms. DiGuido said some of her clients are spending over $1 million a month on TikTok, a significant amount for a newer platform. Backup plans call for money to be moved to other social-media sites such as Instagram, Alphabet Inc.’s YouTube and streaming-TV platforms. The agency is still recommending TikTok given its strong ad performance in terms of reach and the ability for ad content to go viral on the site, she said. 

Over the past week, advertisers ramped up discussions about finding possible alternatives after the Biden administration signaled that a U.S. ban on the app was a potential outcome, Ms. DiGuido added. 

Some ad buyers said they don’t expect the uncertainty surrounding TikTok to derail ad spending, as many advertisers are taking a wait-and-see approach. 

“We do not like to make any decisions based on assumptions,” said Ivonne Kinser, vice president of marketing for Avocados From Mexico, a nonprofit marketing organization that represents avocado growers.

“We are advising our clients to stay the course,” said Rob Jewell, chief growth officer at ad agency Power Digital Marketing Inc. His clients doubled their annual TikTok budgets in 2022. Mr. Jewell expects his clients to double their TikTok budgets again this year.

“A lot of marketers are getting really good value out of TikTok and if something is performing really well, marketers are typically super slow to try to find alternatives,” said Ben Jankowski, former head of global media at

MasterCard Inc.

TikTok sent ad-agency executives an email earlier this month talking down the risk of a ban in response to the Restrict Act, a bill introduced by Sen. Mark Warner (D., Va.) that would allow the federal government to regulate and ban technology from some foreign countries such as China. 

In the email, which was viewed by the Journal, TikTok’s ad-sales department suggested that if the bill were passed, the Committee on Foreign Investment in the U.S. might grant the company an exception.

Write to Patience Haggin at [email protected] and Suzanne Vranica at [email protected]