A U.S. appeals court upheld a law requiring TikTok’s Chinese parent, ByteDance, to divest its U.S. assets by January 19, 2025, or face a ban. TikTok plans to appeal to the Supreme Court, citing free speech concerns.
Despite the uncertainty, advertisers are maintaining their TikTok budgets while preparing contingency plans. Jason Lee of Horizon Media noted clients are readying alternative strategies in case of a ban or sale.
- Competitors Poised to Benefit:
- Meta Platforms (Facebook, Instagram): Expected to capture most of TikTok’s ad revenue, leveraging its Reels short-video format.
- Alphabet’s YouTube: Also positioned to gain with its YouTube Shorts feature.
- Snapchat: Could see increased ad activity.
- TikTok’s U.S. Ad Revenue: Forecasted to hit $12.3 billion in 2024, a fraction of Meta’s projected $159 billion advertising revenue, according to industry estimates.
- Market Reactions: Stocks of rival platforms surged:
- Meta Platforms: Hit a record high of $629.78, closing up 2.3%.
- Alphabet: Gained 1.1%.
- Snapchat: Increased by 1.89%.
- Trump Media & Technology (Truth Social): Rose 3%.
For now, advertisers remain active on TikTok but are preparing for shifts if the legal situation escalates.
