Americans will no longer be allowed to download or update TikTok through major app stores after Sunday, but it’s not the end of the world (so far) for advertisers on the platform.
While President Donald Trump signed an executive order in August that made “transactions” illegal with TikTok’s parent company, ByteDance, the Commerce Department—tasked with enforcing the order—only just today provided guidance on what constitutes a “transaction.”
The Commerce Department has not confirmed that advertising is exempt. However, TikTok is interpreting that advertising and business contracts will not be illegal once the Trump administration’s executive order goes into effect and is “proactively communicating” that with partners, according to a TikTok spokesperson.
“Under the rules, this does not change an advertiser’s or partner’s ability to engage in business or transactions with TikTok,” the spokesperson said. “The Commerce Rules only impact the ability for new users to download TikTok after Sunday. Existing users are currently unaffected, other than receiving in-app product updates.”
Four media buyers, who spoke on condition of anonymity to preserve their working relationship with TikTok, said they had not heard in-depth remarks from TikTok despite working regularly with the company.
One buyer confirmed TikTok did reach out to say, “despite no new downloads, current campaigns remain live, and TikTok is open for business,” the buyer paraphrased. That buyer said they are expecting another update by the end of today. David Herrmann, a media buyer in Redondo Beach, Calif., tweeted that he also received communication from TikTok that “the ad platform is not affected.” Herrmann did not respond to a request for comment.
While advertising is not believed to be banned from the app, the news has affected buyer sentiment. “The ongoing drama surrounding the app’s future in the U.S. has certainly dampened advertisers’ interest in making long-term ad commitments until TikTok’s future is known,” said Debra Aho Williamson, principal analyst at the market research firm eMarketer.
Adweek recently reported that media buyers have continued to express confidence in the app, but have been hesitant, as Williamson indicated, to make long-term ad deals with the company. TikTok’s ad sales chief, Blake Chandlee, told Adweek that the company has 20-25 joint-business plans, or long-term contracts, with major global brands and agencies.
Buyers said that recent chatter of a deal to sell the app or change its capital structure would not affect their work on the app, but that was because their top priority is user behavior and growth.
If the app store ban goes into effect on Monday, which is likely absent a sale or reversal by the Trump administration, Friday’s government order would cut into that new user growth significantly and, at the very least, temper its appeal to advertisers.
Particularly, in recent months, TikTok has expanded its user base beyond those under the age of 25 as more U.S. users downloaded the app in quarantine due to the Covid-19 pandemic.
“From an advertising standpoint, brands leverage TikTok as a way to reach existing TikTok users,” said Melanie Rhoads, group director for strategic accounts at Nexstar Digital. “Since there is already a high volume of users on the platform already, I don’t see this impacting advertiser reach by much. However, this does pose a risk for future advertising on TikTok as usage growth is still important for advertisers, especially as TikTok aims to grow their 25-plus user base.”