TikTok Market Struggles In Midst Of Trade War Between USA and China!
The uprising trade war between the USA and China is not a new issue in the market. Everyone knows about the ongoing trade war between the two countries. Among these tense scenarios, TikTok is fighting hard, not to get trapped in between. However, it is hard to avoid the damages to the ship when you are in the sea and get dragged in a sea storm.
After facing banishment from its largest user market, i.e. India, now TikTok is facing the threat of getting banned in the USA. Recently, Secretary of State in the US, Mike Pompeo announced, that the USA is in the process of banning the Chinese application TikTok, in the USA. This announcement came soon after India banished 59 Chinese apps from its market.
USA President, Donald Trump’s re-election campaigns clearly showed dissatisfaction with China. The campaign showed support to Pompeo’s statements, supporting the banishment. One of the campaign ad slogan used by the Trump campaign announced: “WARNING: China is spying on you.” This campaign was visible on Facebook and requested users to sign a petition in support of the banishment of TikTok.
However, in response to this, the TikTok spokesperson blamed Facebook. They said that Facebook is charging money for the campaign and defaming TikTok to uplift its product which is Instagram Reels.
Instagram recently launched this new feature on its platform. The feature also allows the users to create short videos, just like TikTok.
Although TikTok is among the less favorable advertising option among the advertisers. Even though TikTok has or say had 2 billion users, still due to the high price of advertisement advertisers less likely trusted TikTok for advertisement purposes. Therefore, not many advertisers are concerned about the war and banishment on the Chinese application. Most of the advertisers stated that the TikTok was still in an experimental phase of their advertisement strategy.
One of the main reasons for that could be the reason for TikTok being new in the market. It has been only a year since TikTok provided the option for advertisement on its platform. However, instead of being new TikTok received several positive responses from the advertisers. The brands were impressed with the growth and advertising solutions provided by TikTok. However, still, TikTok needs to climb multiple stairs to reach the moon it is dreaming, since the standards of the market are set quite high.
The most important factor related to TikTok is brand safety. Due to its origin from China, many brands are keeping their distance from the platform. They intend to maintain this distance even if TikTok moved its operations from China.
According to TikTok, they removed nearly 49.2 million videos from their platform. These videos did not follow their community guidelines. They did it between the time frame of 1st July and 31st December. They also claimed that nearly 89.4% of the removed content was never viewed by anyone on the platform, hence this content never received any reviews. However, around 5 million videos with exploited content, that did not follow the terms and services policies of the platform got viewed by people, raising another concern in the market.
To make sure that the company provides a safe-advertising solution to the advertisers, the company has decided to work with several different third-party clients like Openslate, Doubleverify, Integral Ad Science, and Moat.
A spokesperson from TikTok stated, “We’re in the early stages of working with these partners and will be able to provide more information at a later date, but we can say that advertisers are excited by these partnerships and the controls that we are seeking to provide for their campaigns.”
A survey found that the most downloaded users of TikTok are between 6-18 year old. This data is from the UK, from the year 2019. Also, during the period of lockdown, 14% of children between the age of 3- to 10 years downloaded TikTok, and 31% were between the age 13-18 years of age. The data was issued by the U.K communications regulator Ofcom.
According to an ad buyer, TikTok violated the policy of the Children Online Privacy Protection Act, when the application was known with the name of Music.ly. Later, TikTok paid $5.7 million to settle the Federal Trade Commission allegations. The allegations were made due to the collection of personal information from children, aged under 13-years. However, Musical.ly was ordered by the authorities, demanding the removal of videos uploaded by the children under the age of 13 years. As these videos were uploaded, without the concern of the child parents.
Brendan Gahan, partner and chief social officer at digital agency Mekanism, issued a statement stating, “that is a bad way to introduce yourself to a new market.”
When announced, Mekanism and its clientèle did a review of the details of the violation. The news regarding the violation stated: “planned activations under the microscope,” said Gahan. However, the Makanism discovered that the mistake was made by Music.ly.
To be clear, TikTok launched in 2016, and ByteDance purchased Musical.ly in 2017 and later in 2018 transferred its users to TikTok.
However, TikTok still faces a threat to COPPA. Federal Trade Commission and the USA. Department of Justice is looking into the claims filed that the short-video application is not deleting the videos of underage children on its platform. If these claims are found to be true and the commission and the Justice Department of the USA find any such content which includes children under age the age of 13 years, then TikTok will have to face severe challenges in the USA.
However, according to TikTok, it takes “safety seriously for all our users,” and also offers a “limited app experience” in the USA.
Hence, providing extra safety experience to the users in the USA. TikTok also has a 12+ ranking on the app store. Which means parents can block the application for their children, who are under the age of 13.
Reports suggest that the short video application is planning to generate a revenue of $500 million from the USA market. To achieve that TikTok has hired sales representatives. It has also launched its self-service advertisement tool. These tools will help advertisers to create a high-end graphic and advertising content with sound. Also, TikTok is now aiming for the SMEs, to make sure it attracts the small and medium enterprises TikTok has launched several luring plans for the business so that they can start advertising on its platform.
Also, advertisers who have boycotted Facebook are looking for a new platform to get started with their advertisement campaigns.
The increase in the audience on the platform is one of the greater factors that the short video platform is attracting an audience for the advertisement.
Apart from the condition of banishment on the application, all the other factors play in favor of the app.
According to Amy Luca, chief executive of influencer marketing platform theAmplify, “There’s a cautious tone but there’s not a big concern for brands right now.” If the application saves itself from the trade war between the US and China, “At the end of the day, advertisers will want to be where their audience is spending time and right now, if you are looking to engage a young audience, TikTok is a good strategy.”
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