Shulou(Shulou.com)11/24 Report--

Beijing, April 6 (Xinhua)-- although the popular short video app TikTok is at risk of being banned in the United States, advertisers are increasing their spending on the platform.

TikTok's advertising revenue continues to grow, according to Sensor Tower, an app analysis group. TikTok's advertising revenue in the United States grew by 11% in March, with companies such as Apple, Amazon, Pepsi and takeout app DoorDash leading the way in advertising spending. A number of advertising executives and agency leaders said that the major brands basically plan to continue to invest in TikTok, and the leading advertising companies, including GroupM Group and Omnicom Group, owned by advertising giant WPP, have not advised customers to reduce their investment.

The continued enthusiasm of advertisers for TikTok comes at a time of growing security concerns among governments and regulators around the world about TikTok. According to reports, the US government requires byte bounce to peel off TikTok, otherwise it will be banned.

"the US government is unlikely to issue an executive order banning TikTok immediately, which will have an impact on advertisers," said Joshua Lowcock, chief media officer of advertising agency UM Worldwide. "even with bipartisan support, the legislative process will take a long time, giving marketers enough time to develop alternative strategies."

Last month, TikTok CEO Zhou attended a congressional hearing and answered questions on security issues of concern to lawmakers. Ahead of the hearing, a survey of 300 US marketers by Capterra, the software group, found that 75 per cent planned to spend more on TikTok over the next 12 months.

Edward East (Edward East), CEO of Billion Dollar Boy, a global online celebrity marketing group funded by Zhou, said: "instead of being frightened by the prospect of a potential ban, we are seeing brands invest more in TikTok." However, he added that advertisers may have committed some of their spending in March before the congressional hearings.

Still, some brands have contingency plans, such as shifting spending to the platforms of competitors such as Meta and Google, in preparation for a possible ban in the US. A large media organization urged clients to use force majeure language in their contracts with TikTok and carefully studied the cancellation terms of various advertising spaces before committing to investment, according to a person familiar with the matter.

Digital advertising is the lion's share of revenue. TikTok's global revenue last year is expected to be close to $10 billion, with digital advertising being the main source. Industry insiders say it has competed for market share over the past year by offering cheaper advertising than Meta and Google and a higher return on investment in the form of newer ads. TikTok's revenue is expected to reach $14.15 billion in 2023, up from $9.89 billion in 2022, according to Insider Intelligence, a research group.

In recent weeks, TikTok has also been taking steps to allay brand concerns. The TikTok advertising sales team has been reiterating that TikTok is a global company and that 60 per cent of the parent company is owned by global investors. In a memo to advertising agencies entitled "false vs facts", TikTok pointed out that Los Angeles and Singapore are its headquarters. The memo also promotes TikTok's $2 billion partnership with Oracle, the Texas Project (Project Texas), to ensure that U.S. user data is kept in the United States.

"TikTok has taken unprecedented steps to build trust by protecting US user data and systems in the United States, and we believe our efforts can solve all national security issues," TikTok said.

"I don't think anyone will react in a panic or cancel their advertising plans, but they are waiting and waiting to make contingency plans in case of a ban or government action," said Phil Smith, president of the ISBA.

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.