TikTok CEO defends app to Congress—what brands need to know

Threat assessment

Lawmakers took turns going through a litany of alleged privacy flaws with TikTok, and potential national security holes. Lawmakers raised concerns that ByteDance managers could access data about U.S. users. Lawmakers worried about how TikTok programs its algorithm in ways that control media and information for millions of Americans. There were concerns about how TikTok could encourage bad behavior among users with risky hashtag challenges.

At one point, U.S. Representative Kat Cammack, R-Florida, played a TikTok video that showed an animated firearm and bullets, with a caption that called out the House Energy and Commerce Committee, implying there could be violence at the hearing. “This video was posted before this hearing was publicly noticed,” Cammack said.

Later in the hearing, a lawmaker said TikTok removed the video from the site, after being alerted to it.

In recent weeks, TikTok has been assuring marketing partners that it won’t be banned, and it has held a series of “Beyond Brand Safety” events where executives show advertisers all its safety work. TikTok publicly said this week that it has 150 million monthly users in the U.S., and 5 million businesses rely on the app. TikTok has become a cultural force in the U.S. for creators and as a source of entertainment.

Related: How TikTok discussed ban threat with brands, agencies

“From a brand marketing and agency perspective, TikTok seems to have struck such a chord, and grown such a powerful user base, and it’s cultivated that Gen Z audience,” said one ad agency exec, who was following the hearings and spoke on condition of anonymity. “It seems sort of hard to fathom that TikTok would go away completely.”

At an impasse

The tone of the proceeding, however, left some advertising insiders, less certain about TikTok’s potential to keep operating.

“It appears that there is no way TikTok will be able to persuade Congress that its presence in the United States is positive for the country,” said Brian Wieser, an independent analyst and writer of the Madison and Wall Substack newsletter. “TikTok is also evidently failing to persuade Congress that it is practically separate from ByteDance and Chinese government oversight.  At the same time with the Chinese government conveying, it won’t allow a sale, it seems certain that the status quo will not persist.”

“If there is a formal effort to shut down, it’s not clear how long it would take to play out while TikTok appeals, presuming they do,” Wieser said.

A TikTok ban would majorly affect the digital marketing community, which has been investing in the platform and learning how to create in the signature style of videos on the site. At its best, TikTok jumpstarts trends that help marketers reach new customers. The app is filled with helpful tips on cooking, beauty, cleaning, and all manner of subgenres.

“TikTok has eclipsed other social platforms in key engagement areas and has rewritten marketers’ playbooks in the process,” said Claudia Ratterman, director analyst at Gartner Marketing Practice, a research firm.

The specter of a ban could loom over TikTok’s advertising negotiations if marketers are worried about the long-term staying power, Ratterman said. “If they invest time, resources and budgetary dollars, for the platform to be banned months later, therein lies the risk.”

There are brands that have already been hesitant about working with TikTok given the general concerns about data security and privacy, Ratterman said. Those brands will be “keen to learn any outcomes or next steps from the hearings,” Ratterman said.