Agencies Spend More on TikTok Ads This Year Despite Uncertainty Over US Ban

Imminent uncertainty about a potential Ban on TikTok in the United States does not dissuade advertisers from incurring advertising expenses on the platform. In fact, agencies are committed to increasing their advertising investments year-on-year in 2025.

An agency official, speaking anonymously to protect industry relationships, plans to increase the agency’s spending on TikTok by 20% to 30% this year. DigiShopGirl Media will increase its spending by 15 to 18 percent for the year, according to CEO Katya Constantine. At VML, clients are increasing their annual influencer budgets on TikTok by 30-50%. Some brands commit to the entire year, while others focus on the first half of the year or maintain a steady stream of ad hoc campaigns throughout, according to Mae Karwowski, CEO of Evidemment, the brand’s marketing agency. influence of VML.

U.S. ad spending on TikTok is expected to increase 57% year-over-year in the first two months of 2025, according to ad data firm Guideline, based on advance booking data from partner agencies for upcoming campaigns. And TikTok is growing: Since 2020, TikTok has posted a compound annual growth rate (CAGR) of 118%, going from 2% to 20% of total social advertising spending in the United States, according to the guidelines.

“TikTok continues to push agencies and brands to commit to increasing their annual spend through upfront deals, and they continue to sell upfront media placements through 2025,” the agency’s top executive said. “TikTok has confirmed in writing, but not in contracts, that it will honor refunds for reserved inventory if the app is shut down.”

Despite the regulations uncertaintyTikTok’s ad revenue trajectory highlights the platform’s resilience. Advertisers are making commitments for 2025, attracted by TikTok’s ability to drive engagement and sales, particularly among younger audiences.

“A lot of this is net new ad budgets created for TikTok because it’s created a pocket of success within their business,” the agency’s top executive said.

The impending ban on TikTok in the United States, scheduled for January 19, is forcing app stores like Google and Apple to remove TikTok. However, the bill does not specify a timeline for completely shutting down the app itself, creating “a fragile few weeks for agencies and advertisers,” the executive notes. Without access to the App Store, the app will not receive updates and will eventually become so buggy that it will be unusable.

As brands face uncertainty, many are also hedging their bets with contingency plans. Some aren’t entirely convinced by the lack of reimbursement commitments in TikTok’s contracts, which adds to the hesitancy to commit to initial ad inventory.

Some are hesitant to commit to initial advertising inventory

Brands are showing a “notable hesitation” to immediately commit to initial advertising inventory or reserve advertising space before the campaign launch, according to the CEO. This has the consequence that spending commitments are reserved closer to the course of the campaign. Fewer advertising dollars were reserved for February compared to last year. Although key ad inventory for major events like the Super Bowl and Oscars has been reserved, demand is lower for the random days between these events, particularly for overhead and replay ads, which require a upfront payment to secure future places.

TikTok still appears to be filling its spring and early summer inventory, with some brands booking into July, this source said.

“Some brands have requested explicit language [from TikTok] that says, ‘if the app doesn’t exist in the United States, we’ll get a refund and we’ll get it at that time,'” the executive said. “And that hasn’t happened yet.”

TikTok did not respond to a media request.

Contingency plans and how agencies will redirect budgets

The premier agency, which established its contingency plan in November last year and plans to implement it by the end of January, advises brands to reinvest 80% of their TikTok advertising budget, covering performance, e-commerce and brand marketing, to other channels.

For commerce-focused brands, this earmarked budget could be transferred to platforms like Amazon and Pinterest Shopping. Full marketing investments will likely be directed to OTT streaming platforms such as Hulu and ESPN as part of Disney’s portfolio, while performance-related advertising investments will shift to Instagram Reels.

Already, 5% of the agency’s clients have started to redirect their budgets away from TikTok since last year.

At DigiShopGirl, the contingency plan is to reallocate 90% of performance ad dollars from TikTok to Reels, YouTube Shorts and, to a lesser extent, Snapchat, particularly for brands targeting U.S.-based consumers.