TikTok and ATT | Cellular Dev Memo by Eric Seufert

The FT this week reported that TikTok has diminished its worldwide income targets by at the very least $2BN, from between $12-14BN to $10BN. From the piece:

Targets had been reduce by 20 per cent in late September by TikTok chief govt Shou Zi Chew in a digital “all-hands” assembly, in accordance with 4 folks conversant in the transfer. TikTok initially projected revenues between $12bn and $14.5bn this yr, however precise income is now believed to be nearer to $10bn, these folks added.

TikTok is a handy scapegoat for most of the present income headwinds confronting social media platforms, however it doubtless is experiencing those self same headwinds. TikTok operates the identical “hub-and-spoke” construction of digital promoting that each Meta and Snap make the most of, which suggests Apple’s App Monitoring Transparency (ATT) coverage has created friction for it as effectively.

I’ve argued that the businesses most impacted by ATT have downplayed its business affect as a result of it represents a systemic, everlasting drag on their companies, as an alternative blaming the obscure apparition of “macro headwinds.” My sense is that TikTok is one other bogeyman that’s used on this manner, particularly as many firms rush to emulate its short-form video product. The truth that TikTok additionally faces income headwinds invalidates the narrative that TikTok is solely, or in the primary, answerable for the misfortune of different social media platforms.

If TikTok was primarily answerable for the income adversity confronted by different social media firms, its personal income would account for that. As an alternative, the corporate is revising its income goal down for the yr, indicating that it has confronted the identical current obstacles as its friends. And different massive promoting firms that aren’t materially or in any respect impacted by ATT thrived over the previous quarter, reminiscent of The Commerce Desk, which noticed 31% year-over-year progress, and Publicis, which raised its This fall steerage. If TikTok isn’t siphoning income away from the social media platforms and is as an alternative going through headwinds, and the areas of the promoting financial system which might be insulated from ATT should not struggling, then dismissing or minimizing ATT’s function within the inhospitable promoting setting is troublesome.

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