HUNDREDS of advertisers, including major brands such as L’Oreal and Victoria’s Secret, flocked to Manhattan’s Lower East Side on Thursday (May 2) night for TikTok’s annual spring pitch to marketers. It had been about a week since President Joe Biden signed a law that says TikTok must be sold by its Chinese parent company or face a potential ban, and marketers were champing at the bit to hear TikTok’s thoughts.
They did not have to wait long. Blake Chandlee, TikTok’s president of global business solutions, kicked off the evening by thanking advertisers for their “tremendous support and trust” and said the company considered the law unconstitutional and would challenge it in court.
“We believe the facts and the law are clearly on our side and that we will ultimately prevail,” Chandlee told more than 300 attendees, some of whom could not find chairs in the crowd. “I want you to know we are not backing down.”
But for the rest of the roughly 45-minute presentation, which took place in a large gallery with the fuchsia and light blue lights of TikTok’s logo, it was business as usual. And it was a keen reminder that Madison Avenue’s concerns about TikTok, which centre on how to cleverly market their products and ensure that consumers are seeing their ads, are vastly different from those of Washington, where officials consider the app a national security risk.
Sofia Hernandez, TikTok’s global head of business marketing, declared that TikTok had gone from “being viral to vital” for businesses. The company’s executives introduced new tools for running ads against trends and events such as the Summer Olympics in Paris. A Unilever marketing executive described how the Vaseline brand had thrived by tapping into a TikTok skincare trend known as “slugging”. Many marketers were visibly confused until she explained that the term referred to slathering one’s face with petroleum jelly before bedtime to seal in other serums and moisturisers.
“TikTok is the most interesting story in advertising right now,” said Craig Brommers, chief marketing officer of retailer American Eagle, who attended the event. “That’s why you had a standing-room-only audience waiting to hear what’s next for the most important video platform for Gen Z.”
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Near one of the long bars serving “Violet Hour” cocktails and wine, several stations highlighted creators from TikTok niches such as sports and luxury. “From boy moms to girl dads, TikTok is for #parents,” one said. The company sent guests home with branded Dagne Dover bags that retail for around US$75.
TikTok’s executives reminded advertisers that with 170 million monthly US users, the user base had started to reflect the general population. “We are not just Gen Z anymore,” said Tim Natividad, TikTok’s US head of enterprise sales.
Advertising is the lifeblood of platforms such as TikTok, which has become a core tool for marketers pitching Americans on new makeup, fast-food hacks, music and more. The company appears determined to maintain ad US dollars amid its uncertain future, particularly as US tech giants focus on their market share and push short-form video competitors such as Google’s YouTube Shorts and Instagram Reels.
TikTok and its Chinese parent company, ByteDance, are private and do not publicly disclose their financials. Brian Wieser, an independent ad industry analyst, recently estimated that TikTok brought in US$6 billion in US ad sales last year but said that excluded revenue from e-commerce, tipping and other ventures. In the United States, TikTok users spend 54 minutes per day on the app, while Instagram users spend 35 minutes on that app, with 21 of those minutes devoted to video, according to data firm eMarketer.
According to the law signed last week, ByteDance must sell TikTok within the next nine months. The Biden administration, lawmakers and security experts have said that under TikTok’s current ownership, there are risks that the Chinese government could lean on ByteDance for access to sensitive data on TikTok users or to spread propaganda.
The company has not sued to challenge the law.
Last week, after Biden signed the bill, Michael Beckerman, TikTok’s head of public policy for the Americas, told employees at an all-hands meeting that the situation was “unprecedented” and “very political”, according to an audio recording that was shared with The New York Times.
“We are sitting between some of the largest geopolitical issues of our time as well as some very, very complicated issues with technology globally and privacy and all these policy issues,” Beckerman said in the Apr 24 meeting.
Beckerman said he was buoyed by Biden’s plan to use TikTok in the lead-up to the election. He also said the vote “was not about us” because it passed as part of a broader package of aid for countries like Ukraine and Israel.
“We are going to win,” he told employees. “We are optimistic this is not the end of the process.” NYTIMES
