LONDON/CHICAGO (Reuters) - Major advertisers including Procter & Gamble PG.N, Danone DANO.PA and Chipotle Mexican Grill CMG.N are committed to spending on TikTok even as the hot Chinese-owned video sharing platform faces a possible ban in the U.S. after the government accused it of being a national security risk.
Brands that spoke with Reuters said they are, however, monitoring the situation and any implications for their campaigns.
While TikTok’s advertising business is young it has attracted big names that aim to reach the millions of teenagers who use the app for dance challenges, makeup tutorials and lipsyncing videos.
Users are so involved in generating their own videos that campaigns go viral more quickly than on other social media platforms like Facebook and Instagram. “TikTok epitomizes what social media stands for in advertising right now,” said John Petty, head of social strategy at creative agency Wieden + Kennedy NY. His firm works with TikTok advertisers including P&G, Samsung and candy maker Trolli.
TikTok has gained users as the coronavirus pandemic kept people home, interacting with their phones. But its days operating in the United States could be cut short if the U.S. government successfully bars domestic transactions - including advertising - with the app, owned by China’s ByteDance. Politicians on both sides of the aisle have criticized the app’s security and privacy rules, concerned that user information could be passed on to China’s government.
A U.S. court hearing on whether to allow the government to bar transactions with TikTok, which could effectively ban it, will be held on Nov. 4, the day after the presidential election.
France’s Danone last week announced a new TikTok campaign for its Oikos Triple Zero yogurt.
“For us, it’s all about being where our consumers are and making sure we are executing our campaigns in a safe way,” Danone’s U.S. marketing head Linda Bethea told Reuters.
The campaign features football player Saquon Barkley from the New York Giants carrying many overloaded grocery bags and invites users to post videos of themselves doing the same. The campaign runs through October, but Danone can switch it to a different platform if necessary.
“Leading into this campaign, we were always proactively prepared for potential shifts in strategy,” Bethea said. “But for now we are committed to continuing the campaign on the platform.”
Bethea declined to comment on legal or political matters beyond saying Danone was in constant contact with TikTok and agency partners to ensure its actions comply with U.S. regulations.
“Our clients are concerned about any type of political conversation that might swirl around them, generally speaking,” Petty said, without naming clients.
Fast-food chain Chipotle this week launched its third TikTok campaign of the year, challenging users to hit a 53-foot basketball shot - the same number of ingredients used on its menu.
“We are monitoring the conversation taking place surrounding the future of the TikTok and working closely with their team,” a spokeswoman said.
“We are grateful to the advertising community for showing us tremendous support during this time,” said Blake Chandlee, head of global business solutions at TikTok.
In August, ad buyers said TikTok was offering refunds for campaigns that are unable to run if the app was banned in the U.S.
Talks are ongoing to finalize a preliminary deal for Walmart Inc WMT.N and Oracle Corp ORCL.N to take stakes in a new company, TikTok Global, that would oversee U.S. operations. U.S. President Donald Trump said last month the deal had his "blessing."
When asked about the effect of a potential ban on its reputation, Danone said brand reputation was “of the utmost importance,” but that it also prioritizes engaging consumers on “dynamic digital platforms that allow for interactive brand storytelling.”
Procter & Gamble - one of the world’s top advertisers - said it, too, would continue to use TikTok where possible as it watches for the outcome of the U.S. litigation.
"For the most part we’re advising clients to stay the course with their TikTok buys," said Allie Wassum, who heads social strategy for ad agency Digitas North America PUBP.PA, adding that TikTok has shown a commitment to "making it work".
But some companies are staying on the TikTok sidelines for now, according to Joe Gagliese, CEO of influencer marketing firm Viral Nation.
“This is crunch time for brands preparing for Q4, and if they were going to activate now it would have needed to be planned during the time when there was a lot of uncertainty around the app,” he said.
Reporting by Martinne Geller in London and Richa Naidu in Chicago. Additional reporting by Siddharth Cavale in Bengaluru and Sheila Dang in Dallas. Editing by Kenneth Li, Vanessa O’Connell and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.