While TikTok continues to increase its lead as the app of choice for teen users, the platform also continues to face significant challenges when it comes to monetization and regulation, on different fronts. On monetization, like all social platforms, TikTok’s working to mitigate the impacts of the global economic downturn, which has seen ad spend reduced across the board. This has also led to job cuts and restructuring at the company, which includes this significant internal shift, as found by The Financial Times.
“The overhaul will see North America general manager Sandie Hawkins – who oversees business operations, sales, and marketing across the region – transferred and placed in charge of TikTok Shop in the US, its eCommerce channel, according to five people with knowledge of the changes.”
Turbulence at TikTok
TikTok continues to maximize its commerce push, which is expected to bolster its in-stream shopping and commerce live streams even more under the leadership of its North America General Manager Sandie Hawkins. Commerce is already a critical element on Douyin, TikTok’s Chinese sister app, and makes up the majority of its revenue share. In China, you can consider Douyin a major market and not just another app.
While Western markets still aren’t as open to in-app shopping as their Asian counterparts, TikTok is set to continue pushing this element as an alternative monetization pathway. If TikTok can’t pay its top stars, then they’ll start going somewhere else that can; TikTok may be at the top right now, but that doesn’t mean it’ll always stay there. This week, FCC Commissioner Brendan Carr reiterated that TikTok should be banned in the US.
Citing the threat of data sharing with the Chinese Government, Carr says that TikTok should be shut down on the grounds of national security, which is a push that he will continue to reiterate in the US Senate. The danger of this ban has loomed over TikTok ever since its beginnings, so while it might be a bit pressing for avid app supporters, it’s not new coming from the US Government. Carr’s significant presence could still see TikTok face a US Ban.
TikTok’s still working to mitigate this threat by implementing new systems that will keep US user data in the US, away from Chinese staff. TikTok even revised its European user terms, which include somewhat similar provisos. TikTok has been previously accused of suppressing anti-China content, while promoting pro-China sentiment, with this new finding potentially suggesting that TikTok could be looking to influence political activity via its systems. Or it could be that TikTok simply doesn’t want political content in its app at all.
The Wrap
It’s impossible to know for sure, as TikTok doesn’t reveal a heap of info about its internal workings. At face value, it doesn’t look good for TikTok to be getting involved in political content, especially amid ongoing scrutiny by the FCC. Looking at it from various angles, TikTok clearly faces many challenges, even as it continues to add more users and dominate the space. One thing is for sure, the pressure continues to mount on TikTok.
Subscribe to our ‘Bottoms Up!’ Newsletter. Get the latest social media blogs about news, updates, trends, and effective social media strategies to take your business to the highest level from Tristan Ahumada and Jeff Pfitzer.
Sources