Advertisers Getting Cold Feet Ahead of ‘TikTok USA’ Launch, Latest Scuttlebutt Suggests

Advertisers aren’t confident about TikTok’s future in the US, despite the Trump administration’s insistence that a deal with China is moving forward.

Some advertisers are planning to scale back spending with TikTok next year, even as the White House continues to assert that a “TikTok USA” deal with China is on the horizon. But there’s still too much uncertainty surrounding who will actually oversee the U.S. version of the popular short-form video app and how it will operate.

“A new, U.S.-based version of TikTok would need to be vetted and understood before advertisers feel confident investing large amounts of advertising dollars in the platform, even if it maintain’s TikTok’s core functionality,” said Courtney Werpy, Associate Director of Performance Media at Collective Measures.

Currently, TikTok’s U.S. operations, which are still 100% owned by China-based ByteDance, will continue handling revenue-generating businesses like e-commerce and advertising. Plans have been discussed for months now about a U.S.-based joint venture, majority owned by American investors, which will control the app’s user data and oversee retraining of the algorithm licensed from ByteDance—which would still give ByteDance the lion’s share of revenue from a U.S.-based TikTok entity.

But the questions of who will lead the platform in the U.S., how it will be governed, and whether the shift will affect performance are all still up in the air. TikTok’s current reps have offered little clarity on the logistics of the U.S. plan, and indeed, no one from TikTok’s Chinese leadership has confirmed that the U.S. deal is actually on the table.

“In the short-term, clients are thinking, if this new U.S. TikTok launches this quarter, should they be spending the same amount of budget that was originally planned for TikTok? Probably not,” said Shamsul Chowdhury, EVP of Paid Social at Jellyfish. “Long-term, if this new platform doesn’t perform as well as the current TikTok, will they want to continue to invest there? Some advertisers will see the results and the value of it. Others will become more conservative and revert to the tried and tested Google and Meta platforms.”

Advertisers are no strangers to contingency planning, but there’s no easy way to determine whether a U.S.-based TikTok platform will perform the same as the current iteration.

“The same caution applies to influencer marketing,” said Colleen Fielder, Client Strategy and Insights Partner at Basis Technologies. “We’d likely pause the spend once we get closer to the actual date of the transition and then wade in carefully as the new version is adopted for U.S. users.”

TikTok remains the decorative centerpiece in President Trump’s ongoing trade war with the Chinese government, which retains a stake in the platform’s parent company ByteDance. Trump has already extended the deadline several times by which ByteDance must either agree to divest TikTok’s U.S. operations or face a federal ban. But as agreements with China waver, it becomes even less certain whether a deal concerning TikTok will remain on the table—if such a deal was actually up for consideration in the first place, as the White House claims.