Less BS, More Facts, Some Opinions
Connected TV advertising is here to stay. However, there is a downside: ad money leaking away due to fraud. Gijsbert Pols, PhD, director of connected TV and new channels at Adjust,
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Say “Nein” To Sharing The German Cartel Office, Germany’s antitrust regulator, says Google’s data processing policies violate the
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The decline of the media industry’s traditional means of ad targeting and measurement, such as third-party cookies or mobile IDS (MAIDs), has given rise to a glut of alternative tools to help marketers engage intended audiences.
Accompanying this has been a tsunami of sales pitches, each of these alternative solutions promising to help brands’ marketing departments meet ever-growing privacy requirements while demonstrating a return on ad spend just as cookies, etcetera did in the past.
The market isn’t so much faced with an “identity crisis” as it is with a quandary over which identity tools best fit their needs, according to several studies. Although with such an array of offerings inundating the market ahead of Google’s latest 2024 deadline for cookie deletion, it’s essential for marketers to know how to kick the tires in a robust manner.
The messaging from such vendors can vary, and many have similar data backbones, such as email addresses, IP addresses, or on-device data with some even reverting to cookie-based identifiers, according to a 2022 Digiday+ Research study.
For example, Prohaska Consulting sub-divides these aspirant solutions into three categories: deterministic, probabilistic, and contextual, recommending that such solutions are deployed according to privacy requirements in a given market.
So far, so good, but with dozens of such solutions on offer, and with many of them only applicable in particular markets advertisers and media owners alike are faced with a quandary over which partner(s) to choose.
Just look at the ones Prohaska Consulting identified:
After all, saying “yes” to just about every solution on offer is just not impractical, it can be detrimental. Digiday spoke with several industry insiders to devise the below guide on how to gauge the right solution for their company’s needs.
“The whole identity thing is like the emperor’s new clothes… you need to gain a deep understanding of the privacy routine of the vendor,” said one former in-house media executive, who now consults with CPGs on their retail media strategies.
The source, who requested anonymity given their ongoing projects, went on to add, “Everyone says they have a solution [for identity] but nobody does… many of them are commoditized and most marketers don’t know how to distinguish between them.”
The first step is to ensure with any vendor that their data is adequately consented. Liz Salway, principal, business consulting at EPAM Systems, advised marketers to probe where an ID-vendors’ data is coming from, ask for guarantees over its genesis, compliance with requisite privacy laws — and how often it’s updated.
“All identity ‘solutions’ claim to have the widest penetration and most privacy-compliant way of working,” she added, “managing a privacy-compliant interaction with the media ecosystem has to sit squarely with the brand — while they may not be accountable for any missteps that happen, they are responsible.”
Similarly, Anish Aravindakshan, director of product marketing at Verve Group, said marketers need to understand how an ID solution authenticates a user — which relates back to the ‘deterministic/probabilistic/contextual’ paradigm.
“For instance, you have solutions like UID2, which requires an email ID, that in the lens of some advertisers is a big no! But a contextual solution, for example, does not require any [deteministic identifier],” he added, “so there’s a privacy spectrum in which different identifiers fall, that should be the first criteria for a marketer.”
Ensuring consent is a “huge challenge” and many vendors in the space are not compliant with the requisite requirements, several sources told Digiday.
Just look at the GDPR fine Meta was served with last week.
The Trade Desk’s chief strategy officer Samantha Jacobson said she encourages peers to try and understand both how compliant an ID solution is with laws such as GDPR, as well as how “how accurate it is and how permanent it is.”
She further highlighted how certain practices that have long been frowned upon by privacy advocates, namely “fingerprinting,” still have traction in the industry’s rush to meet the 2024 deadline for the final sunsetting of the third-party cookie.
“You have consumer-provided data that is keyed-off email addresses [the basis of The Trade Desk-led UID2], and then you have device-orientated data, whether that’s a browser ID or plugging into a particular device, and then there’s extrapolated IDs,” she explained.
“That’s where fingerprinting has turned into a bad word, and so people are just calling it other things, the idea of adding in this sense of identity when the consumer hasn’t consented, it gives me a lot of pause… So, the question you want to ask is: how does someone opt out of this [targeting], and once someone opts out, how is that honored downstream?”
While privacy assurances are a “sine qua non” for any future-gazing addressable audience strategy, the primary goal of any such undertaking is to (accurately) address audiences at scale, hence probing the attributes of any such vendor’s proposition is key.
Obviously, the term “scale” is a subjective one, and Verve’s Aravindakshan advised advertisers to extrapolate audience attributes while tools such as third-party cookies are still at their disposal. From here, marketers can then establish whether a given ID has a crossover with a brand’s desired audience.
Additionally, sources also advised those on the receiving end of a pitch to pose questions on how vendors distinguish between an individual ID and a household-level ID, and not just to accept the numbers on a pitch deck at face value.
Prohaska Consulting’s Ameet Shah explained that while a vendor may claim its ID solution has an addressable audience of “X million,” advertisers need to consider how it fits with their own.
“What is your match rate with my audience?” is a key question to pose to an ID vendor, counseled Shah. “Your ID may have whatever many emails, but they have to match with my emails,” he added.
“You can have 200-, 300-, or even 500 million emails and that can sound reasonable, but you need to look at the bounce rate, as you need to think about how many of those email addresses are real, or how many are expired.”
Of course, there are additional considerations, including establishing how a certain ID will work on specific channels (such as browser-based display ads, or in-app video), plus the tech implementations that any given solution would require. This includes asking questions about how to harmonize the different solutions a given advertiser employs ends up employing after the web’s most popular browsers no longer permit the ubiquitous use of third-party cookies in 2024.
For further deep-dive insights on contemporary ID solutions please see the article below.
At the moment, all signs are pointing to a recession in 2023 — and the gaming and esports industries are already feeling the pressure.
In esports, brands such as BMW, once a major sponsor of organizations such as Fnatic and OG, have pulled away from the space, spooking investors and leading some observers to proclaim that an “esports winter” is coming. In BMW’s case, that means cutting the brand’s esports partnerships spend to exactly zero dollars — at least according to the brand rep who told Digiday that “BMW has finished their activities regarding esport[s] from end of 2022 on.”
And while the broader gaming industry has long been perceived as somewhat recession-proof, the rise of free-to-play, ad-supported games such as Roblox threatens to subvert these expectations.
As economic headwinds grow stronger, all eyes are on the gaming audience as developers and esports orgs alike wait to see how they might impact gamers’ spending habits. To shed light on this critical topic, Digiday worked with YouGov to poll gamers on how they might respond to a recession, supported by key data points provided by GWI.
According to a survey of 19,630 gamers toward the end of 2022, YouGov determined that interest in free-to-play games and interest in so-called premium titles, which offer higher production value for a fee, was nearly evenly split among the cohort. (YouGov’s survey went out to thousands of self-identified gamers across international markets such as the United States, Europe, and Asia, with respondents providing their answers via email.)
48 percent of gamers indicated that they were interested in free-to-play games, while 53 percent stated that they were not interested. It’s worth noting that gamers’ preferences don’t seem to be trending in either direction, either: 12 percent indicated that their preferences had shifted toward free-to-play, but 11 percent stated that they had lost interest in free-to-play games over the past two years.
Of the 9,271 respondents who responded to a question about why they were interested in free-to-play games, 3,248, or 35 percent, indicated that their direct reason for prioritizing free-to-play games was the prohibitive costs of either premium titles or gaming consoles and PCs. Another 33 percent indicated that they preferred to play many small games over fewer large ones — another cost-based factor, as each individual premium game purchase typically costs at least $60.
On the other hand, only 15 percent of gamers said they preferred the gameplay of free-to-play titles. It’s clear that the highest-quality gaming experiences are happening in premium titles, not free games — but the rising costs of console games could keep interest in free-to-play high as a potential recession gets closer.
“When a lot of us in the industry think about premium games, we ultimately jump to the $69.99 PS5 titles — but if you have people who are, for example, mobile-only gamers, they would actually think about a premium game as a $2.99 paid no-ad game, as opposed to just the free version,” said YouGov head of global gaming and U.S. sports Nicole Pike. “There’s some kind of underpinnings of what platform they prefer to play on, and that helps to drive things — so we’ve seen a ton of data that shows a direct correlation between only wanting to play free games and being a primarily or exclusively mobile gamer as well.”
It turns out gameplay isn’t a big source of concern for the gamers who aren’t interested in free-to-play games, either.
Only 4 percent of respondents to this question stated that their distaste for free games was a result of the superior gameplay of premium titles. Gamers made their preferences clear: A whopping 66 percent said that they had avoided free-to-play titles over the past two years because they didn’t like seeing advertisements while playing.
With free-to-play on the rise, console manufacturers such as Sony and Microsoft have increasingly begun to view in-game advertising as a promising potential growth area, with both reportedly starting to create their own in-game ad departments in 2022. But if brands want to start truly placing ads inside premium games the way they are currently placed in many free titles, game developers will have to determine how to serve them without putting a bad taste in gamers’ mouths.
According to data provided by GWI, the amount of money that gamers spend on games and in-game purchases has decreased since Q4 2021, though not precipitously. Although spending increased across the board between 2020 and 2021, fewer gamers in the United States and Canada spent more than $50 on games per month between 2021 and 2022 — a statistic that inherently reflects a decrease in purchases of premium titles, which are almost always priced at $60 or above.
While this data doesn’t include gaming-related products such as console peripherals or gaming accessories, it certainly indicates that gamers are spending less money on their pastime of choice, which validates developers’ embrace of in-game advertising and free-to-play as the business models of the future.
“All told, it’s a mixed bag. Overall consumer confidence is down and is having an impact on the gaming sector, but the signals aren’t completely clear,” said Chris Beer, a data journalist at GWI. “I’d say the big purchases — of things like consoles and gaming PCs — are likely to fall, but the number buying individual titles or microtransactions will be less affected. Gamers may cut back their monthly budgets, but I don’t think they’ll stop buying completely.”
Interested in sharing your perspectives on the media and marketing industries? Join the Digiday research panel.
Cost-cutting is in full swing, fewer publishers are adding staff — the media industry doesn’t exactly have an optimistic vibe at the moment.
This tracks with a recent Digiday+ Research survey of 71 publisher professionals, which found that optimism has really taken a hit in the media industry over the last year (which is a big difference from the agency world).
This isn’t immediately apparent when we look at how publishers feel about their success in 2022: 61% of respondents to Digiday’s survey said they agree that their companies had a successful year in 2022.
However, the drop-off in optimism becomes clear when we look at this result compared with last year’s and when we look at the bigger picture of the media industry as a whole.
Last year, 78% of publisher pros told Digiday they agreed that their companies had a successful 2021 – that’s a significant difference from this year’s 61%. And while that percentage decreased, the percentage of publishers who disagree that their companies had a successful year increased: Last year, 11% of respondents to Digiday’s survey said they disagreed that their companies had a successful 2021. In 2022, that percentage was up to nearly a quarter (24%).
Meanwhile, the percentage of publishers who agree that the media industry had a successful year plummeted from last year to this year: 61% of publisher pros told Digiday last year they agreed the industry had a successful 2021. In 2022, that percentage fell to only 27%. And on the flip side, 17% disagreed that the industry had a successful year in 2021, with that percentage jumping to more than half (51%) in 2022.
The drop-off in optimism is even more apparent when looking at how publishers feel about their prospects for 2023: The percentages of those who agree they’re optimistic about their companies’ prospects for the new year and about the media industry’s prospects for 2023 fell by about 30 percentage points each. Last year, 84% of respondents to Digiday’s survey said they agreed that they were optimistic about their companies’ prospects for 2022, which fell to 58% this year. And 68% said they were optimistic about the industry’s prospects for 2022, compared to only 35% this year.
Drilling down further into the data, we can get a better understanding of the attitude shifts publishers have gone through in the last year. For instance, the percentage of publishers who strongly agree that their companies had a good year fell from 49% in 2021 to 24% in 2022, and those who disagree somewhat rose from 8% in 2021 to 18% in 2022.
Meanwhile, the biggest shifts for the media industry overall occurred in the “somewhat” category: 46% of respondents to Digiday’s survey somewhat agreed that the industry had a successful year in 2021, compared with just 23% in 2022. And the percentage of those who somewhat disagreed that the industry was successful jumped from 14% in 2021 to 44% in 2022.
This year, the percentage of publishers who strongly agree they’re optimistic about their companies’ prospects is only 14%, compared with 42% last year. And the shifts are more significant looking at the media industry as a whole.
Only 4% of respondents to Digiday’s survey said they strongly agree they’re optimistic about the industry’s prospects this year, compared with 21% last year. And while 31% said they agree somewhat that they’re optimistic about the media industry this year, it’s a significant drop from the 47% who said so last year.
This week’s Media Briefing includes a conversation with Bloomberg Media’s CEO Scott Havens about how the publisher is growing its international presence on pace with the economic downturn and why its video business is expected to be a lucrative safety net.
The key hits:
Last year, Bloomberg Media bullishly announced it was going to be entering its globalization era, starting by going head to head with the British press. These plans and proclamations came just before the economic slowdown kicked up dust for the media and advertising industries, but the ambition to create an international Bloomberg Media did not get pushed to the backburner, according to CEO Scott Havens.
Granted, 2022 didn’t have as significant revenue growth as 2021. Bloomberg Media’s revenue grew by almost 20%, per Havens, though the company is still calculating the final numbers, and it was impacted mostly by advertising declines in the second half of the year. But the company “did not pull back our spending or investment levels, [nor do] we anticipate, at this point, doing that.”
Moving into the new year, Havens is using the launch of Bloomberg U.K. as the blueprint for the company’s other international iterations, meaning the teams will be focusing more on local daily content. What’s more, artificial intelligence and other technology will be used to more quickly dub over video content and translate written stories into languages including Spanish, Japanese and German — something that’s typically done through licensing partnerships with regional media outlets.
Outside of the international expansion, Havens said he is also optimistic about investing further in television and digital video and using those to bolster its advertising business, especially when other forms of media are being cut from advertising budgets.
The following conversation has been lightly edited and condensed for clarity and readability.
How did 2022 turn out for Bloomberg Media? Did you see revenue growth in advertising after a turbulent second half of the year?
We had a good year; we grew roughly 16%. The first half on the ad side was definitely stronger for everybody [than] the second half, but we still managed to grow in the second half. We did not pull back our spending or investment levels [and] we don’t anticipate, at this point, doing that. We are leaning into our strategy and are confident we anticipate a similar growth rate in 2023.
There was a noticeable growth decrease for us — not a decrease in spending — but growth decrease in the second half. It feels like, given where the pacing reports are, that we will see that play out through Q1.
Q1 of 2022 was actually quite good. We’re not pacing quite at the level of [last] Q1 yet, but I expect [business] to pick up. It’s only nine days in so it’s hard to project, but we had a really good week, the last couple of weeks of bookings were strong. There’s no indication to me that people are putting away their pocketbooks right now.
Which areas of the advertising business are you most optimistic about in 2023?
I am excited [about TV]. We’ve got two networks in OTT and CTV — Bloomberg Television and Bloomberg Quicktake — and we’ve been revamping the teams and hiring people. We’ve got some new shows coming, one with Kal Penn and one with Hannah Fry. We’re working on some other big projects, too.
It’s obvious where attention is going i.e. video, whether it’s short form TikTok to longer form [on] YouTube to streaming — the TV dollars are so freaking big. Traditional TV is still much, much bigger than CTV, but when Netflix and Apple and all these guys get involved, this is serious business. And that’s going to speed up the movement.
And if you, like us, have two networks that have established a beachhead over the last few years on all these carriers [and on] all these platforms, it sets you up pretty well, which is another reason I’m optimistic. We’re in the jet stream of video advertising growth, we’re not fighting over the declining print ad pages. You have to be in the right places when things slow down, [and advertisers are] not going to necessarily cut too much out of digital and video. They’ll probably take it out of other things.
Given the economy’s impact on advertising revenue, are you pushing back larger tentpole events or product launches until the second half of the year to give the sales team more lead time to secure sponsorships and to give advertisers more breathing room before asking them to spend a high price tag?
We are not intentionally shifting the schedule for fears about recessions or economic slowdown. Generally speaking, we do so many events — we have certainly one a week globally — and we really can’t afford to bunch them up in a short period of time. So as far as I know, we’re sticking to our calendar. And if we move something back to the second half, it’s because we need more runway to get it planned or if it’s a new event that we’re launching.
I think that the strategy of pushing stuff back to the second half is consistent with people’s views [that] the second half may be stronger than the first half [but] I think that’s a risky bet. Nobody can predict what’s going to happen. And if they do [push back events] and then they end up canceling all that stuff, their year is gonna be pretty dismal. That could be a risky proposition for some publishers.
How has your subscription business been doing, and specifically narrowing in on churn and retention, are you seeing any issues with getting consumers to still pay for subscriptions, especially higher priced premium ones?
Overall, we feel good about the business. Our overall subscriber number stands roughly at about 450,000 [and] we bring in about 500 to 1,000 people every day. It’s been a little slower growth. We grew maybe just over 20% last year in the business… and we are projecting roughly the same growth rate this year. [Editor’s note: A Bloomberg spokesperson said the company doesn’t disclose its subscriber churn or retention rates. Its subscriptions business would have had a growth rate of 68% if 500 new subscribers were added every day in 2022 — equating to 182,500 new subscribers for the year — without losing any existing subscribers.]
We think there’ll be some softness, but there’s a lot of competition out there. Whether it’s [weight loss subscription] Noom or [meal delivery service] Sunbasket or Netflix — and then the other seven streamers you got to pay for — at some point, people say, “Do I need to have 37 things that I pay for each month?” And the answer is probably no, especially if they get laid off.
I don’t think our audience is that sensitive to the recession. I think a lot of them probably expense this as a business expense. And so I think that’s more resilience because it’s not your pocketbook. Your company may ask you to shut it down, but that’s a different story. So we think we’ll have good growth this year, though we will need to battle harder to improve our retention rates in this kind of environment.
In May 2022, Bloomberg Media started its globalization plans, beginning with the launch of Bloomberg UK. About a year in, how has that experience informed Bloomberg’s expansion into other countries?
We weren’t going as deep into the day to day grind [in the U.K.] and we provided this global perspective and stories from Asia and Latin America for that audience.
If you want to start pulling people into your platform, you [need to] give them more of what they want, which is daily, local and national business and politics [news]. So that’s what we did, and it worked. The traffic to [Bloomberg U.K.] went up 30% to 40%, depending on the month, the commercial opportunity expanded dramatically [and] one of our biggest market growth was out of the U.K. office because of the additional exposure. We didn’t invest too much in that we already had tons of [employees] there, but we did bring in some new writers and some new producers.
That is a model that I would say, from an ROI perspective and as an overall Bloomberg LP strategy, makes a lot of sense. Increasing our awareness and influence within a region helps everything else we do, with the core terminal business, etc. So we plan to expand that into other regions. There are some obvious ones that are also in English, [like] Australia and Canada. We haven’t greenlit the plan for this year necessarily yet, but those are on our radar, we’re already in these markets.
Has this expansion been delayed at all by revenue concerns or the state of the economy?
No, not yet. Things are stable from our point of view. There’s a difference between slowing growth and overall decline, and we’re still growing. I think a lot of people are still growing. It just might not be as crazy as [2021] and may be more on par with 2022. So no, we’re not slowing things down. We’ve got lots of job openings that we’re out there recruiting.
“As we go into [this] year, we’re going to try to be as strategic as we can, in terms of advanced selling. But separate from all of that, our franchises are an incredible asset to us and part of having franchises is being able to draw folks in early on because it’s predictable.”
– Geoff Schiller, global EVP of commercial & sales strategy at Vice Media Group on the latest episode of the Digiday Podcast
In the past week, Digiday reported two U.S. office closures by Future plc, the U.K.-based company that owns titles like Marie Claire and The Week.
Future said, however, that the reduction in its physical office space will not affect its ambitious plans to expand its U.S. presence in a number of verticals, including lifestyle and entertainment, as well as to produce more video. Future is part of a wave of British media companies planning to push more aggressively into the U.S. market this year.
While Future’s U.S. arm was first created in the 90s when it bought video game magazine publisher GP Publications, the company’s efforts have accelerated in the past few years. – Sara Guaglione
Here’s a timeline of Future’s recent moves to grow its presence in the U.S.:
April 2018: Future buys NewBay Media for $13.8 million, bringing titles like Broadcasting & Cable, Bass Player and Guitar World into the company.
August 2018: Future acquires Purch’s consumer business for $132.5 million, including titles such as Tom’s Guide, Live Science and Space.com
July 2019: Future buys B2B publisher SmartBrief (which had 5.8 million subscribers at the time of purchase) for $45 million. Following the acquisition, more than half of Future’s overall revenue comes from the U.S.
October 2020: Future acquires Cinemablend for $12.7 million in an effort to push into the TV, film and entertainment verticals in the U.S.
May 2021: Future acquires MarieClaire.com and the license to publish the women’s lifestyle magazine in the U.S. for the next five years for about $16.1 million (or £13.3 million). (The company already owns the U.K. edition, which it bought in 2020 as part of its acquisition of U.K. publisher TI Media.)
October 2021: Future completes its acquisition of Dennis Publishing and its 10 titles – including Kiplinger, MoneyWeek and The Week – for about $364 million (£300 million) in order to expand into the wealth and knowledge verticals in the U.S.
January 2022: Future says it has acquired businesses and brands worth about $1.7 billion (£1.4 billion) over the last five years, including those based in the U.S.
February 2022: Future opens a 16,000 sq. ft. office in Atlanta, Georgia, as its new video production hub, with plans to hire over 100 people locally.
May 2022: Future acquires women’s lifestyle site Who What Wear for $127.2 million.
September 2022: Future CEO Zillah Byng-Thorne announces her intention to step down by the end of 2023.
August 2022: Future makes changes to its U.S. revenue teams. Jason Webby, CRO of North America, exits. Shayna Kossove, formerly CRO of Who What Wear and based in Los Angeles, takes on a new role as commercial president to oversee a new revenue team working across Future’s women and home interest portfolio.
November 2022: In its full-year earnings report, Future reveals organic revenue growth in the U.S. grew 7% year-over-year, but fell 1% in the U.K. U.S. revenue made up 39% of Future’s global revenue, up from 35% in 2021. However, its U.S. audience declined 13% year-over-year, according to Comscore data.
December 2022: Future announces it will close its physical offices in Atlanta and Washington, DC by the end of the month.
January 2023: Future appoints two senior executives based out of the New York office to strengthen U.S. sales: Ali Dib as head of agency strategy and Jeffrey Goldstein as head of programmatic.
41%: The percentage of publishers who said the number of full-time staffers at their companies increased in 2022, down from 58% in 2021, according to a survey of more than 70 publisher professionals conducted by Digiday+ Research.
~12: The number of Twitter staffers overseeing misinformation, global content moderation and hate speech and harassment who were laid off.
+1,800: The number of news jobs that were cut in 2022, up from about 1,500 in 2021, according to new data from Challenger, Gray & Christmas.
68%: The number of publishers surveyed by Reuters Institute who expect some growth in subscription revenue and other paid content income this year, despite the squeeze on consumer spending.
Future plc closed its D.C. office along with its Atlanta video hub last month:
Read more about Future’s continued office closures here.
Vice Media is ready to sell ads on Twitch, starting with Refinery29’s Good Game show:
Learn more about VMG’s Twitch partnership here.
Future closes Atlanta office less than a year after it was billed as a new video production hub:
Read more about the office closure here.
Media businesses are slowly getting less white, male-dominated, stats from Condé, WSJ, NYT, others show:
Learn more about how publishers’ diversity ambitions are faring here.
The future of The New York Times’ media column:
It’s been a year since the Times’ media columnist Ben Smith announced he’d be giving up his role in pursuit of a new media venture. But despite it being one of the most coveted jobs in media journalism, the Times has yet to fill Smith’s old slot, writes Vanity Fair.
The M&A market is cooling for digital media companies on the auction block:
There is a stalemate going on between digital media firms and potential buyers over valuations and deal terms in this economic downturn, according to Axios. Publishers like Vice Media, BDG and Vox Media are turning down lower than desired offers from potential buyers, while hoping in the meantime that they can avoid taking cost-cutting measures.
The New York Times’ Rebecca Blumenstein joins NBC News:
Blumenstein is stepping down from her role as deputy managing editor at the Times to join NBC News as part of a broad overhaul of the news division at NBCUniversal that includes the departure of NBC News president Noah Oppenheim, reported The New York Times.
Publishers are using subscriptions to generate ad revenue:
For publishers like The New York Times, The Wall Street Journal and The Washington Post to combat the economic downturn’s impact on their advertising businesses in 2023, they need to reconcile the coexistence of their advertising and subscription businesses to grow both, according to Adweek.
Seky Bowie, an 18-year-old content creator on TikTok, started her account in early 2022. And with her posts about yoga, fashion and various lifestyle content, she rapidly grew her following to over 82,000 throughout the year. But in recent months, with the legislative threats to ban TikTok from government devices(or even altogether in the U.S.), Bowie is one of a number of creators worried about the fate of the app, as they have invested time and resources to grow followings and secure brand deals specific to TikTok.
“It’s been a pioneer and a trailblazer for other apps in the same space,” said Bowie. “There are a lot of businesses that profit off of making content themselves on TikTok or doing it through people like us, so it has a lot of social and economic dominance in our society. Taking it away is like moving backwards; almost like bringing our internet, or at least this format of the internet, back to pre-Covid.”
Federal legislation prohibiting government employees from using TikTok on government-owned devices and computer networks has gained traction in recent months. And this month, New Jersey and Ohio will join 12 other states in banning the use of the popular video app on government-owned and managed devices.
This push to potentially ban TikTok is the latest move by the U.S. government regarding the app. Previous interest banning TikTok during the Trump administration had marketers worried, but the ban did not come to fruition.
Despite the legislative interest in curbing the app’s growth in the U.S., TikTok saw a surge of small businesses users in 2022 who used the app alongside creators and influencers who had built their followings on the platform already. The businesses joined TikTok as it continued to grow in popularity, especially among Gen Z, making it more appealing to brands seeking the attention of younger demographics.
At the same time, questions remain about data privacy on TikTok — a major issue at the center of the legislative interest. For instance, ByteDance, TikTok’s China-based parent company, is using the app to monitor specific U.S. citizens’ locations. And a variety of methods are used to collect user data, including scanning hard drives and geolocating devices every hour, accessing calendars, and collecting contact lists, according to Wired. It is unclear what information a foreign government could obtain about users, such as location and private messages.
Even so, creators and those who work with creators want to keep growing their audiences on the app. For example, Bowie created her TikTok account to share her love of yoga with the audience she surprisingly gained, and soon her account grew to include sharing pieces of her lifestyle. “Although it originally started out as a fun little hobby, I fell in love with the creative process behind making these kinds of videos,” she said.
Bowie’s not alone. Other creators and agency executives are also concerned about the potential disruption. One of those is Elma Beganovich, co-CEO of digital marketing agency Amra and Elma. She has 2 million followers on TikTok and said that a ban of the app would be a mistake.
“If the government got rid of TikTok all together, of course brands could no longer work with creators and influencers, mostly Gen Z, and reach that target group that easily,” said Beganovich, whose content focuses on lifestyle.
“Any interruption or ban on TikTok would invariably affect thousands of creators making a full or supplemental living on the platform,” said Ryan Detert, CEO of marketing agency Influential. He added that many small businesses that use TikTok got started during the pandemic and were able to grow their brands on the platform. “And by proxy, technologies and agencies would be adversely affected with upwards of 50% of spends on creator campaigns happening on TikTok,” he said.
With all that being said, some execs hope that TikTok’s parent company will work with the government to tweak its practices and avoid a possible ban.
Jeff Duncan, CEO of Talent Management Company, which represents TikTok stars like influencer Renee Estella and Chole Veitch of Netflix’s “Too Hot to Handle,” said he believes ByteDance has to adjust its practices and agree to some level of regulation. “Rest assured, if a ban in the United States occurs, it would likely be the first domino to fall and I feel it’s unlikely for an $11 billion dollar company to stomach a total ban,” he said.
A TikTok ban would disrupt the way smaller brands and content creators use the app on a daily basis. Direct-to-consumer period care brand Viv, skin care brand Truly, Crumbl Cookies and Chosen Foods are all brands that not only create content for the platform, but they have also built their own organic communities as a result. Throughout 2022, marketers turned to TikTok to focus more on advertising to Gen Z because they spend more time on the app than on Instagram and Facebook.
Given the possibility of TikTok being limited in some way, marketers and agency execs believe creators need to make sure they’re not overly reliant on the platform.
“We have been telling our creators for a while to hedge themselves and build up their community on other platforms just in case the app is banned,” said Harry Gestetner, founder and co-CEO of content creator marketplace Fanfix. “Although this bill has bipartisan support, I think it will be highly unpopular with Gen Z and likely hurt politicians’ popularity with young voters.”
Although creators could take brand deals to other apps, content formats would likely have to be different and the rates they are paid could decline if there are fewer views on other platforms compared to TikTok, according to Gestetner. “That being said, the TikTok algorithm is very effective at sniffing out ads and limiting the reach of promotional posts, so there is a possibility that these promotions would get better engagement on YouTube Shorts or Instagram Reels,” said Gestetner.
Duncan added that Talent Management Company will go where the brands require them to be. “Brands need eyes so wherever the public goes, the brands will follow,” said Duncan.
A TikTok creator can spend thousands of hours investing in creating content, from shooting on location to styling their wardrobes, hair and makeup, and hiring a videographer to film videos, according to Beganovich. If an all-out ban were to happen, it would be a huge loss of investment for creators, both financially and considering the time they’ve spent building their audiences.
According to Bowie and Beganovich, their follower communities would also disappear if the platform faced a ban, and it would be almost impossible to duplicate those communities elsewhere.
Beganovich said she spoke with other TikTok creators and influencers, and the census among creators is trepidation. “It’s a very scary thought that within a day someone can erase any prospect of your livelihood, from endorsements to limited collection deals with advertisers to perks, really anything,” said Beganovich. “It’s the prospect of your worst nightmare as a creator coming true.”