Advertising dollars are queuing for space on TikTok despite a federal government ban, say industry insiders.
Agencies say clients are still keen on their brands getting exposure on TikTok and the Canberra move may just be a small blip on the local revenue build.
Marketers are notoriously risk averse, especially around social media platforms, but TikTok grew 11% globally last month, according to data from Sensor Tower.
Australia, after advice from intelligence and security agencies, this month banned the Chinese-owned social media platform from federal government devices.
“In the shorter term, it is unlikely many brands who are already using TikTok will pull back spend,” says Mat Rawnsley, national head of planning, UM Australia.
“Particularly if they are global brands that haven’t already removed TikTok from their media mix because of similar US and UK bans.
“However, the timing of these bans is not great for TikTok as they were really starting to hit the mainstream with a broad range of brands starting to dip their toes in the water, or at least starting to talk about it.”
The ban only impacts users during work hours who are Commonwealth public servants.
With 7% of public sector employees in Australia, this scale isn’t significant enough to impact reach or performance, says Andy Holford, chief product officer, Reprise Digital.
“However, debates continue in Canberra on wider data and privacy concerns across social media platforms,” he says.
“This is the bigger question to marketers. We align with the fact that all platforms need to ensure a strong safeguarding of data and privacy, no matter where their headquarters are based.
“TikTok is a leading platform that drives incredible time-on-platform metrics in Australia. It would be challenging to reach these same engaged audiences through other platforms with the same cost efficiency if access were to become restricted.
“While we are yet to see advertisers pull back spend, the conversation of brand safety is something we regularly have with marketers.”
Jaime Nosworthy, CEO of The Pistol, says Australian advertisers, without any evidence of misconduct from TikTok, will continue to lean into the emerging TikTok advertising capability.
“It is presenting a clear opportunity for incremental reach and cost-effective conversion, which, in the current landscape, is critical for the majority of brands,” Nosworthy says.
“While core platforms such as Meta and Google have more robust advertising suites and enhanced measurement capability, the average time spent on the platform combined with the level of attention TikTok captures creates a compelling case for brands to increase their overall social media and digital expenditure to activate this emerging performance channel."
Enigma’s Justin Ladmore, managing director, Media, says he understands the nervousness from the government.
“But with no public evidence to suggest any wrongdoing I think they have jumped the gun,” he says.
“Data security is a huge issue across all digital platforms and TikTok has been working harder on brand safety than the other platforms due to the increased scrutiny, but they seem to be getting all the heat.
“Audience numbers are growing significantly, and the government will lose access to these important audiences if they ban the platform.
“We are hoping the ban doesn’t spread beyond the government because it is an awesome platform, and we will keep recommending it to our clients because that is where their audiences are.
TikTok is consistently making its way on to media plans performing well across reach, engagement, and response. Ladmore says it’s great to have another option that ticks all three of those boxes outside of META and Google.
“Audience numbers are increasing significantly, and the age profile is broadening,” he says.
“The misconception is that it is just for teens which is not case. The way people are using the platform is also changing which is increasing the time spent using it. People are using it like a search engine to help plan their week, their next trip, buy their next outfit, car or house.
“From an advertising perspective, in an ad world full of short snackable content, TikTok has given our clients a platform to experiment with longer form content or a mix of both.
“TikTok’s competition can see the rapid growth and how effective the platform is. They are scared. Facebook is piling a heap of investment into Reels (the less cool option) and similarly YouTube investing in to Shorts (also performing well) to try and keep up.”
Simon Gellibrand, head of digital at Half Dome, agrees it is unlikely brands will pull back spend.
Australians are shifting away from Meta’s Facebook, with the average time among users spent on the platform per month falling by 3% last year.
At the same time TikTok saw a 40% jump.
“Due to its continued popularity and reach in Australia, TikTok will remain an important part of the marketing mix for relevant brands across, but not exclusively limited to, major verticals in FMCG, retail and e-commerce more broadly,” says Gellibrand.
Chris Fraser, managing director from Intentional, says the main focus for his TikTok clients is exploring new creative formats and opportunities.
“Media has been focused on exploration and testing and we don't see that changing in the short-term, with Q2 plans anticipating an increase in the number of TikTok ad accounts being created,” he says.
“That being said, US attribution tool Northbeam, which tracks spending of more than 600 leading ecommerce brands, showed TikTok had a 4% market share of spend - down month-on-month since the hearing in the US, with this budget being re-invested to Meta.
“Regardless of the ban, and whether that extends further to all consumers, TikTok has changed how consumers engage with advertising - the trend towards low-fi production, creator-driven content is now the best performing style of creative across all digital media platforms.”
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