What Should Brands Do About A TikTok Ban? Q&A With EGC's Nicole Penn

A nationwide ban of TikTok may become a reality in the U.S.

On Tuesday of this week, the White House announced its support of a bipartisan Senate bill that would give the Biden administration the power to ban TikTok in the U.S.

According to the bill's backers, the “RESTRICT Act” aims to protect national security from technology-based threats after recent concerns around the viral Chinese-owned app's collection of Americans' data.

More than 20 U.S. states have banned state employees from using TikTok on government-issued devices and a number of universities have removed support for TikTok on their Wifi networks.

Canada, several EU countries, and Afghanistan have all issued bans on the platform as well, while some organizations like the ACLU have released statements about a stateside ban violating Americans’ First Amendment rights.

TikTok has become a global sensation -- especially among Gen-Z users, providing creators and brands of all sizes with a reliable algorithm and a gateway to younger consumers.

To help understand how brands are reacting to the looming ban, MediaPost spoke with Nicole Penn, the president of EGC Group, a digital marketing agency. Penn provides insights on why the reasons that brands can’t say no to the undeniable allure of TikTok's algorithm, what shifts a ban may drive in the social media sphere, and more.

MediaPost: So how have your clients been reacting to the news about a potential TikTok ban?

Nicole Penn: There hasn't been one brand that has wanted to pull back their activity on TikTok and focus their efforts on other platforms. Every brand we're working with is still all in.

We're actually seeing more interest in brands that are jumping into TikTok late. And that is across categories.

Beauty brands for sure, but also credit unions, educational institutions, healthcare brands and hospitals -- they are all still engaging in TikTok because it's where there audience is, and where they find organic wins that are difficult to find with Meta.

MP: What else makes TikTok so effective for your clients?

Penn: The algorithm is unmatched right now. Even Reels cannot compare to TikTok in bringing people down the rabbit hole they want to go down, whether its knowing someone is a candidate for Lasik surgery or they're interested in air-fryer recipes.

It's just an unbelievable algorithm that holds attention and delivers organic opportunities for brands who aren't ready to cut the cord on TikTok despite security conversations.

MP: If TikTok is banned, how would these brands' strategies change?

Penn: Brands are already building TikTok-like content for every other platform, from Meta to LinkedIn. And that's not going away. You'll continue to see brands trying to get short videos on any available social platform.

With Reels, Meta will likely continue to invest in an algorithm that is as good as TikTok's, though I think they'll struggle to find the same audience TikTok attracts. Newer platforms may also emerge, but I don't see a platform that could replace what TikTok has built in terms of time-on-app and demographic. 

MP: How have YouTube Shorts been comparing to TikTok?

Penn: There's a lot of benefit to YouTube Shorts, but it still doesn't have the audience or the time people are spending on the app.

The discovery of new brands is also much greater on TikTok than any other platform. Which is what makes it a much more effective platform for small businesses.

MP: So brands aren't losing anything by continuing to use an app that may be banned?

Penn: I think it always makes sense to diversify your channel portfolio. There was a time when brands just went right to Facebook and built millions of followers that they now have to pay to show their own content to. It always makes sense to have diversity of platforms to repurpose content elsewhere. 

TikTok may also separate itself from ByteDance, which could take care of some security concerns and be a non-issue.

MP: What do you think generally about the potential ban itself?

Penn: There is a justifiable reason why people and government agencies would have security concerns for sure -- they are valid, and different than what could happen in data leaks we've seen in the past.

MP: With 100 million Americans on TikTok, I'm surprised by how little concern I'm hearing from everyday users about security issues.

Penn: Exactly. I think people are too happy and semi-addicted with the product to complain. There's also a subset of people who don't even care about being tracked, or are at least willing to trade their data and privacy for a good experience on a useful app.

MP: Is there any advice you're giving clients about navigating the moment?

Penn: It's such an independent and institutional company decision rather than a marketing decision. We have clients whose employees can't have TikTok on their work phones but from a marketing standpoint we aren't advising anyone to step away or reconsider the platform.

MP: How would your clients' investments change if TikTok were banned?

Penn: It would be a massive opportunity for other leading platforms.

MP: Do you see any issues arising out of that shift?

Penn: When Facebook started, it was organic and you could win as a mid-size brand, but it became much harder over time as the investment levels and CPMs with Meta went up and up and up. If Meta could find a way to make it attainable, with the performance marketers seeing more value, then more brands might move back their resources to those platforms.

MP: Are there smaller apps that might benefit from a TikTok ban?

Penn: I think so, but we haven't seen the volume and the quick uptake the way we saw on the major platforms. 

Next story loading loading..