2025 State of Mobile is Live!
Sensor Tower · Seema Shah · January 2025
The Clock is Ticking on TikTok’s US Advertising Business
ByteDance-owned TikTok has been growing its share of US digital advertising dollars and comprised 8% of ad spend in 2024. As the 4th largest social media platform by US ad spend, with a highly engaged and youthful user base, it has become an attractive platform for US advertisers. Should TikTok struggle to land a deal or form a joint venture with a US company, as outlined by a recent executive action, US advertisers will need to pivot to other channels.
Key Takeaways:
The shopping and CPG (consumer packaged goods) categories are the largest advertising groups on TikTok, making up 22% and 18% of total US ad spend on the platform, respectively, in 2024
Because short-form video is an increasingly important medium that is driving user engagement, it has prompted advertisers to focus on this type of marketing and propelled competitors, such as Instagram and Facebook, to further develop their own short-form video offerings
Many brands rely on TikTok as their main digital advertising channel - for Uber, TikTok made up 30% of its ad spend in 2024, while Coca-Cola and DoorDash each allocated 25% of their ad spend to TikTok in the same period; within social media, these brands could potentially pivot to Instagram
Per Sensor Tower analysis, it’s estimated that TikTok’s 8% share of social US ad spend would flow to Instagram (+3ppts), Facebook (+1ppts), YouTube (+2ppts) and Snapchat (+2ppts). This would result in Meta and Alphabet garnering a majority of US digital ad spend among social media platforms
During the brief shutdown of TikTok from Jan 18-19, 2025, Instagram saw US time spent from TikTok users rise 16% DoD, 2x greater than that of Snap (+7%), Reddit (+7%) and Facebook (+4%). TikTok user time spent on Instagram in this period was 17% higher than the 30 previous days
Per ST data, ByteDance allocated 77% of its US ad budget to TikTok, dollars that would be lost in the event of a ban. Overall, the company has been increasing its US ad spend, which was up 49% and 10% YoY in 2023 and 2024, respectively
Going forward, however, assuming that ByteDance’s other brands are not affected by the ban and reinstated onto the App Store and Google Play stores, the company may pivot its spending to its CapCut and Lemon8 brands, both of which are seeing rapid gains in US downloads and MAUs
For more information, request the full report from reports@sensortower.com.
Written by: Seema Shah, VP, Insights
Date: January 2025