February 18, 2021
During the Trump administration, video-sharing platform TikTok was scrutinized and charged of spying for China, which resulted in the app losing numerous major advertisers. Since Joe Biden won the presidency, however, TikTok is seeing a strong uptick in corporate sponsors, ad dollars and general interest. Mediahub Worldwide VP and director of social media Erica Patrick said the previous administration’s outcry over national security risks was “more of a stunt” and is not a concern of advertisers. Meanwhile, EU consumer groups are accusing TikTok of violating consumer laws and failing to protect children.
Reuters reports that, “although TikTok’s U.S. advertising business is estimated to be small still compared with larger social platforms, TikTok said it tracked a 500 percent increase in advertisers running campaigns in the United States over the course of 2020.” Since late 2020, TikTok added “McDonald’s, Kate Spade, Chobani and Bose, as well as nonprofits including St. Jude Children’s Research Hospital.”
Bose manager of global social media Christina Kelleher said it found that “ads on TikTok are watched for longer than on other platforms … [and] St. Jude has raised about $50,000 since September through a donation button on TikTok,” according to its fundraising organization ALSAC.
To serve its “large Gen Z audience,” TikTok is also selling “top-dollar ad packages centered around holidays or major events,” such as $750,000 sponsorships for a virtual event with 500 Black creators to celebrate Black History Month. Brands are being asked to pay $1.5 million to sponsor the Black History Month live finale on February 26. TikTok is also doubling down on e-commerce by “exploring letting users share affiliate product links on the app, which could allow influencers and TikTok to earn a commission from sales.”
According to The Influencer Marketing Factory chief executive Alessandro Bogliari, his company “has seen a five-fold increase in requests from brands wanting to work with TikTok influencers since November.” Viral Nation chief executive Joe Gagliese reported that even financial services firms “are asking how they can get in on the app, after the GameStop trading mania showed younger consumers have more varied interests than some advertisers had expected.”
Elsewhere, Reuters reports that European Union consumer groups are filing complaints against TikTok for “allegedly violating the bloc’s consumer laws and for failing to protect children from hidden advertising and inappropriate content.”
According to the European consumer organization BEUC, TikTok’s terms of service are “unclear, ambiguous and favor TikTok to the detriment of its users … [and] its copyright terms are equally unfair as they give TikTok an irrevocable right to use, distribute and reproduce the videos published by users, without remuneration.”
BEUC also slammed TikTok for failing to “protect children and teenagers from hidden advertising and potentially harmful content on its platform,” adding that its “practices for the processing of users’ personal data are misleading.” Similar organizations in 15 countries have also “alerted their authorities and urged them to act.”
Gizmodo reports that BEUC director general Monique Goyens stated that her organization has “discovered a whole series of consumer rights infringements and therefore filed a complaint against TikTok.”