The past several days have been especially tumultuous for TikTok in the United States, leaving advertisers grappling with uncertainty.
On January 19, TikTok went offline after the Supreme Court upheld a law requiring ByteDance, TikTok’s Chinese parent company, to divest its U.S. operations. The ban, rooted in national security concerns, also removed TikTok from Apple and Google app stores. However, President Donald Trump signed an executive order on January 20 granting TikTok a 75-day reprieve, allowing it to temporarily resume operations. This move has given ByteDance time to explore solutions, including selling its U.S. assets.
Amid this uncertainty, advertisers are questioning their next steps. Some are cautiously resuming campaigns on TikTok to capitalize on its unquestionable ability to create strong audience engagement. Others are pausing investments or shifting budgets to platforms like Instagram Reels and YouTube Shorts, especially as creators and social media influencers re-assess their own commitment to TikTok.
The question remains: should businesses stay the course or put their TikTok ad campaigns on pause?
A Quick Recap of Recent Developments and Their Implications
You almost need a program to keep track of everything that is going on with the TikTok saga, but here are a few broad highlights.
TikTok Leaves and Returns
TikTok’s return to the U.S. following Trump’s executive order has brought temporary relief to advertisers and creators alike. However, the platform remains unavailable for new downloads or updates on Apple and Google app stores, limiting its ability to attract new users and potentially degrading user experience over time. While existing users can still access the app, the lack of updates could impact its performance and engagement rates. (This situation has fueled a peculiar demand for mobile phones loaded with the TikTok app.)
A Host of Suitors Emerge
Adding complexity to the situation is ByteDance’s search for a buyer for TikTok’s U.S. operations. Potential suitors include Oracle and Elon Musk, but one of the most intriguing proposals comes from Perplexity AI, a U.S.-based artificial intelligence startup. Perplexity AI has submitted a bid to merge with TikTok’s U.S. operations, proposing a new entity that combines Perplexity’s AI capabilities with TikTok’s short-form video platform. This merger could address national security concerns while improving Perplexity’s own advertising tools through TikTok’s AI-driven targeting and content discovery. However, regulatory approval and ByteDance’s willingness to sell remain significant hurdles.
What Happens Next
ByteDance is under immense pressure to find a way forward before the 75-day deadline ends on April 4, 2025. The most likely path forward involves a sale or merger of TikTok’s U.S. operations. If ByteDance fails to complete a deal within the 75-day window, enforcement of the ban could resume.
This would result in TikTok being effectively shut down in the United States, leaving its 170 million American users without access (again) and disrupting businesses that rely on the platform for advertising and engagement.
The situation is further complicated by possible legal challenges to Trump’s executive order delaying enforcement of the ban, as well as the need for any deal involving TikTok to gain approval from regulatory bodies like the Committee on Foreign Investment in the United States (CFIUS).
ByteDance has historically been reluctant to fully divest its ownership of TikTok but may agree to a deal that minimizes its stake while preserving some control over the platform. Ultimately, what happens next depends on ByteDance’s ability to complete a sale or merger that satisfies U.S. lawmakers’ demands within the next two months.
How Advertisers Are Responding
According to Ad Age, businesses are continuing to advertise on TikTok following the interruption of service on January 19. Ad spend is back up, and so are product sales on the TikTok Shop.
Metrics from e-commerce marketing platform MikMak reveal that ad traffic originating from TikTok has substantially recovered, reaching 16% after a brief dip to zero percent during the peak of the uncertainty. In addition, Ad Age says that a significant majority of advertisers on their platform have resumed their campaigns, while TikTok has experienced notable cost per thousand impressions (CPMs) following the period of uncertainty.
Other sources also point to a decline in TikTok’s CPMs in January 2025 compared to the same period in 2024, accompanied by an increase in click-through rates. The cost per action for advertisers has also reportedly decreased significantly.
Upsides and Downsides of Advertising on TikTok
For advertisers who stay active on TikTok during this turbulent period, there are clear advantages—but also significant risks.
On the upside, TikTok remains a preferred platform for reaching younger audiences. With 170 million U.S. users, many of them Gen Z and Millennials, TikTok offers terrific engagement levels and cultural relevance. Its algorithm excels at surfacing content tailored to individual users, making ads feel organic rather than intrusive. TikTok allows brands to build authentic connections with their audience while benefiting from viral reach through features like branded hashtag challenges and Spark Ads.
The current uncertainty has created opportunities for advertisers willing to take risks, too. With some competitors pulling back from TikTok, brands that stay active may benefit from reduced competition for ad placements and lower CPMs. This could be particularly advantageous in capturing market share or launching campaigns that resonate with audiences during a time of heightened attention on the platform.
However, advertising on TikTok presents downsides amid uncertainty.
The regulatory uncertainty surrounding its future poses a major risk to long-term campaigns. If ByteDance fails to divest its U.S. operations within the 75-day window—or if no resolution satisfies lawmakers—TikTok could face another shutdown or permanent ban in the United States. Advertisers could lose access to their campaigns mid-flight, resulting in wasted budgets and disrupted marketing strategies.
Additionally, TikTok’s reliance on video content requires brands to invest heavily in creative production tailored specifically for the platform. While this can yield high engagement rates when done well, it also demands significant resources and expertise—something not all businesses can sustain during uncertain times.
Concerns about data privacy and national security may deter some brands from associating with TikTok altogether. Even with a potential merger or sale to a U.S.-based entity like Perplexity AI, lingering skepticism about data practices could affect consumer trust in brands advertising on the platform.
What Advertisers Should Do Next
First off, If your TikTok advertising achieves favorable results, continue your campaigns. Don’t put your campaigns on pause, which will give competitors who stay on TikTok an advantage. But do brace yourself for a potential erosion in returns if Apple and Google refuse to carry TikTok and the user experience degrades. Determine your performance threshold and monitor results. At the same time:
- Diversify you social media advertising strategies (if you have not already). Platforms like Instagram Reels and YouTube Shorts, Snapchat Spotlight, and emerging social apps are natural alternatives for reaching younger audiences through short-form video content. By planning to reallocate portions of your budgets across multiple platforms, you can mitigate risks associated with over-reliance on TikTok while maintaining access to similar demographics.
- Build relationships with influencers who have multi-platform presences. Many creators who gained prominence on TikTok have already expanded their reach to other platforms like Instagram and YouTube in anticipation of potential disruptions. Partnering with these influencers ensures continued access to engaged audiences regardless of what happens with TikTok.
- Invest in owned media channels such as email marketing, SMS campaigns, and branded apps. Your own channels provide direct communication with customers without relying on third-party platforms vulnerable to regulatory actions or algorithm changes. Ensure your website serves as a hub for engaging content—including videos originally created for TikTok—to capture traffic that might otherwise be lost due to platform instability.
Finally, advertisers must closely monitor developments regarding TikTok’s ownership and regulatory status while remaining agile in their campaign planning. Short-term campaigns that capitalize on current engagement levels may be worthwhile during this reprieve period. However, long-term investments should be approached cautiously.
True Interactive Can Help
The decision of whether to stay or go as an advertiser on TikTok depends largely on each brand’s risk tolerance and strategic priorities. For those targeting younger audiences or using interactive ad formats unique to TikTok, staying active—albeit cautiously—could yield significant rewards during this period of reduced competition and heightened attention on the platform. True Interactive is working with brands to manage this situation along with myriad challenges of social media advertising based on our deep experience. We can help you. Contact us to learn how.
