TikTok’s launch on Wednesday of a Brand New Stage to court small business Entrepreneurs is fraught with challenges, particularly after the Trump administration’s threat this week to impose a ban on China-based Social Networking Programs.
The brand new self ad system, which lets businesses buy ads without needing to talk to a sales team, is key to TikTok’s ability to turn its reddish hot short video sharing app into a viable marketing business.
But the potential ban floated by US Secretary of State Mike Pompeo overdue on Monday, and new questions about the Chinese-owned company’s ability to control hate speech and misinformation, cloud the launching, ad buyers stated.
“The trust problems are there because it is a brand new app,” said an executive in a significant ad agency, including TikTok needs to make clear to advertisers exactly what it can do”when the chance is greater than zero,” that ads could appear next to harmful content.
The launch coincides with an international backlash against hate speech and misinformation that has proliferated on additional solutions including Facebook and Twitter, prompting an unprecedented advertising boycott of some of these social networking platforms.
TikTok said it is committed to protecting manufacturers from emerging next to objectionable content through content moderation technologies and individual moderators. It also said it has never provided user data to the Chinese government and wouldn’t do so if asked, when asked about Pompeo’s statements.
These issues, along with confusion over TikTok’s advantage for smaller advertisers need to be resolved if TikTok would like to entice more advertisers, advertising agency executives said.
Wednesday’s global launch of this self-serve advertisement platform, which had previously been in beta testing, will have a music library and also video-editing tools to help brands create ads that fit the style of TikTok videos.
The program said it may also provide $100 million (approximately Rs. 749 crores) in free advertisement credits globally, which small companies may apply for as they have been especially hard-hit by the coronavirus pandemic.
“Our customers want to identify with brands, and people identify with their regional businesses and local restaurants,” said Blake Chandlee, TikTok’s vice president of global business alternatives, in an interview with Reuters.
Beijing-based ByteDance, TikTok’s owner, reserved $5.6 billion (roughly Rs. 41,993 crores) in revenue during its first quarter, with the majority coming from advertisements sold on the China-based variant of TikTok called Douyin as opposed to TikTok itself, Reuters reported before.
TikTok will also face stiff competition from other rivals that appeal to younger viewers such as Snapchat, which has also appealed to small companies with”direct response” advertisements that are preferred by smaller companies.
Local and smaller businesses favor direct response advertising that encourage sales or site visits. These types of advertisements can be challenging for social networking platforms to develop, said Darren D’Altorio, head of social media at ad agency Wpromote, that counts Instacart and Samsung as clients.
“I really don’t think TikTok is there however with respect to direct answer,” he explained.
Snapchat shares surged 9 percent on Tuesday, long after information of the potential US ban on Chinese programs broke.