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TikTok shutdown (and re-opening): advertiser impact

Will TikTok actually shut down? If so, what happens to its users and its advertisers? TikTok says it will "go dark" on January 19 ...

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Update Jan 20: as expected, TikTok is back up right now in the U.S., though it’s still not available in the App Store and Google Play as Google and Apple likely await regulatory certainty beyond a verbal commitment from president-elect Trump.

For Singular customers:

  • Advertisers can continue using TikTok Ads to connect with US audiences
  • Ad campaigns targeting U.S. audiences that were automatically paused will resume, although LIVE campaigns will have certain limitations
  • Singular services are available to measure TikTok ads targeting users in the United States
  • You can continue to set up and modify campaigns targeting the US via TikTok Ads Manager, and there is no impact on ad campaigns targeting other countries

The volatile and almost unprecedented situation in the United States around the TikTok shutdown just got even crazier.

In a statement published late Friday January 17th night, TikTok says it will voluntarily shut down service and go dark on 170 million American users tomorrow,  January 19. In other words, the massive social video company is not just accepting a ban on app stores stocking and enabling installs of its app, it is going to literally shut down the servers that enable already-installed TikTok apps to work.

Here’s TikTok’s statement in entirety:

The statements issued today by both the Biden White House and the Department of Justice have failed to provide the necessary clarity and assurance to the service providers that are integral to maintaining TikTok’s availability to over 170 million Americans.

Unless the Biden Administration immediately provides a definitive statement to satisfy the most critical service providers assuring non-enforcement, unfortunately TikTok will be forced to go dark on Sunday, January 19.

That’s … quite a statement.

This TikTok shutdown is unexpected (at least for me)

I have always maintained that any TikTok shutdown as originally mandated would simply force Apple and Google to drop the app from the App Store and Google Play, respectively. That is obviously bad for any app and business, but it’s not an immediate execution. Instead, it would be something like a slow-motion suffocation as the app slowly grows worse and worse with creeping bugs and growing incompatibilities with successive evolutions of iOS and Android.

But we’re seeing something very different right now.

What we’re seeing today is a self-inflicted instant death, probably intended to put strong pressure on American politicians to do something as 170 million Americans wake up on Sunday morning to open TikTok and find … nothing. Except perhaps a message explaining why TikTok isn’t working, and who’s at fault.

So what do advertisers do now?

After all, TikTok is literally top-3 in spend for many mobile user acquisition marketers. It hit every single top list in last year’s ROI Index, and there’s no indication that will change in 2025.

That’s a lot of budget to redirect, with not a lot of time in which to do it.

How did we get here: a USA vs TikTok shutdown timeline

Briefly, how has this all happened?

  • February, 2019: FTC fines TikTok for collecting information from minors
  • August, 2020: President Trump signs an executive order to ban TikTok, citing national security concerns 
  • June 2021: President Biden revokes the order and directs the Commerce Department to investigate
  • December 2022: President Biden signs the No TikTok on Government Devices Act
  • March 2023: The House of Representatives passes a bill to ban TikTok or force its sale to a U.S. company
  • April 2024: President Biden signs the Protecting Americans from Foreign Adversary Controlled Applications Act, requiring China-based TikTok owner ByteDance to divest by January 19, 2025, or face a ban
  • May 2024: TikTok and ByteDance file a lawsuit against the U.S. government, contesting the orders
  • November 2024: Former President Trump reverses his stance on banning TikTok
  • January 2025: The Supreme Court upholds the law requiring ByteDance to divest TikTok

And that brings us to today …

What’s likely to happen?

ByteDance has shown that it does not appreciate being pushed around, and it will completely exit a market rather than accept what it considers a suboptimal solution.

In India, for example, when Prime Minister Modi enacted the TikTok ban in June of 2020, ByteDance just walked away from 200 million users, not even attempting a fight in court.

The U.S., however is different.

It’s both a vastly lucrative territory for the company and strategically very important for the Chinese national leadership, who ultimately control what most Chinese companies do, as we’ve seen in the case of Jack Ma, the founder of Alibaba and Ant Group. Ma criticized China’s regulatory system in late 2020, and by early 2021 he had essentially disappeared from public view, while Alibaba was fined a record $2.8 billion for monopolistic behavior.

ByteDance has options here. There are multiple consortiums and companies bidding for TikTok, including a brand new one just today (Saturday, January 18) from Perplexity AI. Other suitors include Microsoft, Oracle, Walmart, even Twitter and Elon Musk.

But ByteDance doesn’t appear to want to sell.

And incoming President Trump has indicated he’s willing to take some time to find another solution. Plus, outgoing President Biden has made it clear that it’s Trump’s mess to handle now:

“Given the sheer fact of timing, this Administration recognizes that actions to implement the law simply must fall to the next Administration, which takes office on Monday.”

In addition, White House press secretary Karine Jean-Pierre said in a statement that the TikTok shutdown for January 19 is “a stunt.”

Based on TikTok’s statement, however, I think the following is most likely to happen:

  1. A brief shutdown so ByteDance can make its point
  2. A negotiated time period for some level of business reorganization so newly re-elected President Trump can save the service for its 170 million American users
  3. Some kind of new business arrangement that the Trump administration is comfortable with
  4. Business as usual for most

This is entirely my own speculation, of course. I have no insider information.

 

TikTok trouble means happy birthday Meta

Any problems for TikTok, of course, are music to Meta’s ears. What we saw in the India ban is that most TikTok users — remember, 200 million of them — simply moved over to Meta.

“Reels is the outright winner,” Nikhil Pahwa, founder of the Indian tech policy site MediaNama, told the Washington Post with reference to TikTok being booted from India.

And that’s likely to be the case for both users and advertisers in the United States too, if there’s a real shutdown for any length of time.

While we’ve seen a short-term jump in U.S. users flock to RedNote, a Chinese TikTok competitors, the most likely winners are already here:

  • Reels (via Instagram, mostly)
  • YouTube Shorts
  • Snapchat Spotlight
  • Triller
  • Clapper

Triller downloads are up 40% in the last few days, according to Apptopia. Clapper is up 85% on a much smaller base. Instagram is up just slightly, while YouTube is up 12%.

tiktok shutdown: clapper

Of course, nothing is certain. RedNote could maintain momentum, only to be slapped down by a new executive order. Perpetual challenger Triller could seize the moment and gain unstoppable momentum. Perplexity or some other of the potential bidders for TikTok might persuade ByteDance to do some kind of deal, if not make an outright sale.

Stay tuned, and be ready to shift budgets as needed.

But the most likely outcome is that after some turmoil, TikTok remains, and its users stay put, and ad dollars continue to flow. How long that turmoil lasts, of course, is unknowable.

About the Author
John Koetsier

John Koetsier

John Koetsier is a journalist and analyst. He's a senior contributor at Forbes and hosts our Growth Masterminds podcast as well as the TechFirst podcast. At Singular, he serves as VP, Insights.

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