Advertisers redirect budgets as TikTok faces uncertainty
By Felicia Nwosu
Against the back drop of its banning challenge, TikTok’s advertising dominance is facing new challenges as uncertainty surrounding its future continues to affect its standing among major brands.
With ongoing fears of a potential ban in the U.S., advertisers have begun to shift their marketing dollars, reallocating significant portions of their budgets to Meta’s platforms, particularly Facebook and Instagram.
Data reveals that TikTok’s cost-per-thousand impressions (CPM) has experienced notable declines, with a double-digit drop since the start of the year. Many of the platform’s largest advertisers have scaled back their investments, with eight of the top ten categories cutting spending in the first quarter of 2025 compared to the same period in 2024.
SearchEngineLand reported that the shift comes amid concerns about the platform’s future, exacerbated by President Trump’s decision to extend the TikTok ban deadline by 75 days.
It added that, in addition to the concerns about the platform’s viability, the data also indicated that user engagement also saw a dip in January, particularly following a temporary service outage, which further undermined confidence among advertisers.
Despite this, TikTok’s U.S. ad revenue is still projected to hit $14.8 billion this year, keeping it ahead of YouTube, though far behind Facebook, which is expected to generate $36.9 billion in ad revenue.
There is also an indication that although many advertisers are scaling back their activity on TikTok, they are not completely abandoning the platform, that, instead, they are diversifying their investments, focusing more on Meta’s offerings. In particular, Meta has capitalized on the growing demand for short-form video content.
Meanwhile, both Facebook and Instagram have seen significant growth in their short-form video CPMs, as advertisers redirect their spending to platforms with more stable futures.
The trend toward reallocating marketing dollars comes at a time when TikTok is under increasing scrutiny, leaving brands to question whether their investments will continue to yield returns if the platform is banned.
There is an attestation that those brands that have optimized their marketing strategies around TikTok’s unique features and culture, moving to other platforms could mean starting over, adjusting content formats, and realigning audience strategies.
SearchEngineLand said if the ban proceeds, Meta’s dominance in the short-form video market could solidify, reshaping the advertising landscape for the long term.
RECOMMENDED ARTICLES
Comment
No comments found.