TikTok Faces Potential Ban: Small Business Owners Remain Optimistic
President Biden recently signed into law a bill that both the House and the Senate sent to his desk with rare bipartisan support. This new law requires TikTok's Chinese owner, ByteDance, to divest ownership of the platform within a year or face a ban. This move has raised questions about the potential impact on small businesses that use the platform for marketing and customer engagement.
TikTok and Small Businesses
TikTok, a social media app that hosts short-form videos created for and consumed by users, is owned by ByteDance, a Chinese technology company. Boasting a user base of 170 million in the United States, with 25% of those users under the age of 20, TikTok has become a significant player in the social media landscape. According to studies from Pew Research Center, TikTok is used by one-third of U.S. adults. While most TikTok users view and consume content, only a small share of users post content, with the top 25% of those posting being responsible for 98% of accessible video content.
With TikTok's expansive reach, it has become a platform for many businesses to connect with consumers. From advertising on the platform and tapping into influencer marketing to TikTok Shop, which allows sellers to sell products directly through the platform, many small businesses include TikTok as part of their marketing, engagement, and fulfillment plans.
However, lawmakers and intelligence officials have long expressed concerns over the data TikTok collects on users and how the Chinese government may request and use that data. As a major information and news source in the U.S., especially for Americans under 30, TikTok's ownership by ByteDance, seen as an extension of the Chinese government, raises control-related concerns. The recently signed legislation follows long-standing American restrictions on foreign ownership of media companies.
Small Business Sentiment
While many TikTok users have lobbied their legislatures against a proposed ban, the most recent BizBuySell Insight Report reveals that many small businesses rely on a variety of social media platforms for their marketing efforts. In April 2024, BizBuySell surveyed small business owners about various issues facing their businesses for the quarterly Insight Report, which tracks the health of the U.S. small business economy. A majority of small business owners believe a potential TikTok ban would not significantly affect their operations. The survey, which included respondents from various industries across the United States, found that 87.7% of business owners said federal efforts to force TikTok to divest or face a ban would not impact their business.
The Insight Report also revealed that while TikTok has gained popularity, it is not the primary social media platform for most small businesses. Only 13.5% of respondents reported using TikTok, compared to 64.85% using Facebook, 47.42% using Instagram, 34.96% using LinkedIn, and 18.79% using YouTube. This diverse social media presence may help mitigate the impact of a potential TikTok ban on small businesses' marketing strategies and customer engagement.
Potential Beneficiaries of a TikTok Ban
As the legislation moves forward, other technology giants like Meta (Facebook) and Google may stand to benefit from a TikTok ban, as they offer similar short-video platforms such as Instagram Reels and YouTube Shorts. These platforms could potentially attract a significant portion of TikTok's American ad revenue, with estimates suggesting Meta could gain up to 60% and YouTube 25%.
Looking Ahead
While the future of TikTok in the United States remains uncertain, the BizBuySell Insight Report suggests that small business owners are resilient and adaptable in the face of potential changes to the social media landscape. By leveraging a variety of platforms and marketing strategies, they can continue to reach and engage with their target audiences, even if one platform faces challenges or restrictions.
As the debate surrounding TikTok's ownership and national security concerns continues, it is essential for small businesses to stay informed and prepared to adjust their social media strategies accordingly. By remaining nimble and open to new opportunities, small business owners can navigate the ever-evolving digital landscape.