Advertisers are conflicted on whether to invest more in TikTok amid uncertainties about a potential U.S. ban. Despite some brands stepping back, the competition decline has reduced ad prices, creating a favorable environment for remaining advertisers. Recent reports indicate a significant drop in Cost Per Thousand Impressions (CPMs), with falls ranging from 24.6% to 40% year-on-year. Despite claims from TikTok's leadership of brand retention, the overall decrease in CPMs suggests a weakening demand and less bidding competition in the advertising space.
Several factors could be at play - weak demand, stiffer competition - but it's hard to ignore the elephant in the room: the U.S. ban that was supposed to take effect in early January. Though ultimately delayed by President Trump, the mere threat of a ban was enough to rattle marketers, forcing some to scale back and others to walk away entirely.
At media agency Jellyfish, evp of paid social Shamsul Chowdhury told Digiday that TikTok CPMs have fallen 30% to 35%, to as low as $4.
Deanna Mulkeen, head of media investment at agency Wpromote, said it had recorded an average year-on-year fall of 24.6%. Meanwhile, at media shop Tinuiti, senior social innovation director Jack Johnston said the agency had recorded a 40% average year-on-year decline in CPMs, as of last Friday (March 14).
Adolfo Fernandez, global head of product strategy and operations, commerce, at TikTok, declined to comment on the AdRoll report, but told Digiday that brands have not abandoned the platform.
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