As TikTok’s fate as a U.S. operation continues to fluctuate, one hypothetical continues to tickle our speculative interest: What does a post-TikTok America look like? A data-based report on the true SMB impact gains relevance every day that we march closer towards ByteDance’s current June 19th deadline to “divest or die”, at least in the U.S.
We’ve gone down this rabbit hole before, including input from social media experts in the Localogyverse. But to tug on this thread a bit more, and generate SMB data to answer these looming questions, Localogy and Tiger Pistol collaborated on a full-blown research report that will be released next week.
The biggest question is who’s impacted most in a post-TikTok world. The period of uncertainty leading up to June 19 has sent various interests scrambling to prepare for a potential ban. For example, SMBs who market themselves on TikTok could be forced to reformulate their marketing mix.
Besides SMBs, a potential ban could impact TikTok’s competitors, who are all currently jockeying for positioning. They’re each aligning themselves for the market-share land grab of a potential post-TikTok America. Millions of users and billions in ad revenue could be orphaned and up for grabs.
Revenue Impact
First, tackling the question of SMB impact, our past intelligence gathering – including expert opinions and our own market analysis – suggests that there could be short-term transition pains. But in the end, SMBs will adapt and find alternatives. We’ll get into those alternatives in the next section.
But to better answer this question of SMBs’ post-TikTok orientation, Localogy reached out to 750 SMBs to ask them directly. The goal was to report on the potential magnitude of shifting ad dollars by gauging what’s happening today. How many use TikTok for marketing, and what’s the business impact?
Starting with how many SMBs use TikTok, our survey results indicate about 2.8 million U.S. SMBs. This means that if TikTok were to be banned, it would present a situation where 2-3 million SMBs could look to market themselves through other social channels. More importantly, most SMBs in that boat would be compelled to look for alternatives, given TikTok’s revenue impact, which we quantify in the report.
Leading Indicator
That brings us to the impact on TikTok’s competitors. A key thought exercise we continue to entertain is who benefits most from TikTok’s U.S. departure? Who will fill the void? The company’s 136 million U.S. users and $11.8 billion in ad revenue will be up for grabs for everyone from Snap to Meta.
In terms of odds making, social media experts we interviewed point to Meta – both Facebook and Instagram – in terms of their surface area, gravitational pull, and UX adjacency. Others on that list include apps that increasingly position themselves to be competitive with TikTok, such as YouTube Shorts.
But perhaps the best leading indicator of a post-TikTok America was seen in the 14 hours that it went dark before Trump signed the January executive order that extended its deadline. During that time, Facebook saw a 20 percent jump in traffic and Instagram saw a 17 percent jump (see graphic below).
That just measures traffic though. Quantifying the advertiser side of things, Tiger Pistol cites a Columbia Business School study, that says Facebook ad rates spiked 10 percent during the outage. Given that these are demand-driven ad marketplaces, rate spikes were clearly a result of rapid advertiser migration.
This is a valuable preview because if that degree of impact was seen in a 14-hour outage, we can extrapolate the proportional impact in the longer-duration aftermath of a permanent ban. Those who moved quickly on January 19 were only a segment of the advertiser population.
Moving Target
All the above just scratches the surface, and you can see more in the full report from Tiger Pistol.
Though anything can happen in a post-TikTok America, it’s a valuable thought exercise to game it out. And from that exercise, we see a few data-backed possibilities in terms of the impact on SMBs and the social media competitive landscape.
Regardless, the story is not over. In fact, it may be just getting started. This will be a moving target up to – and likely after – TikTok’s impending June 19 deadline. That’s only 14 days away, as of this writing, and is when the real action begins… or when another extension is granted. We’ll be watching closely.
Interested in learning more about Localogy’s Research Services, please let us know.
