Uncertainty over TikTok’s future in the U.S. has created a divide among advertisers, with some choosing to continue investing while others have pulled out entirely. The looming threat of a ban, initially scheduled for January 2025 and later delayed, has caused enough disruption to significantly reduce advertiser participation on the platform. As a result, ad prices have plummeted, with fewer players in the bidding pool driving down costs.
According to data from AdRoll, cost-per-thousand impressions (CPMs) on TikTok have fallen by 80% year-over-year. Industry experts point to a combination of reduced advertiser demand and the chilling effect of regulatory uncertainty. Multiple agencies, including Jellyfish, Wpromote, and Tinuiti, have reported CPM drops ranging from 24% to 40%. Despite reassurances from TikTok leadership that brands remain active on the platform, the numbers suggest a noticeable dip in spending activity.
Advertiser Response Varies by Sector as Uncertainty Drives Both Retreat and Opportunity
The decline in TikTok ad spending hasn’t been uniform across all sectors. Data from Wpromote showed that consumer packaged goods (CPG) saw the sharpest drop in CPMs (66%), while retail followed with a 42% decline. Agencies such as Hanson Dodge advised clients to pause TikTok spending prior to the potential ban deadline, and many of those clients have yet to return to the platform. The uncertainty continues to stifle advertiser confidence, particularly among those hesitant to test new strategies.
TikTok Ad Prices Crash as Uncertainty Splits Advertisers and Drives Budget Shifts to Rival PlatformsWhile some advertisers continue to tread carefully, others are taking full advantage of the reduced ad costs. Agencies such as PMG, Jellyfish, and Tinuiti have noted that most of their clients have either maintained or returned to advertising on TikTok. These brands are seeing strong results and improved returns, largely due to decreased competition. For them, the platform’s uncertainty is not a deterrent but an opportunity to gain more value from their investment.
Brands Shift Budgets as TikTok Faces Uncertain Future and Regulatory Pressure Mounts
Even as some brands return to TikTok, others are reallocating their budgets to rival platforms. Agencies are directing spending toward Meta’s Reels, YouTube Shorts, Snapchat Commercials, and Reddit Takeovers — platforms that offer similar audience demographics and content formats. This shift illustrates that brands are looking for continuity and stability in their social media strategies while still seeking performance-driven outcomes.
TikTok’s future in the U.S. remains unresolved, with the platform facing a deadline to sell or shut down by April 5, 2025. Lawmakers like Senator JD Vance suggest a decisive outcome is imminent, leaving advertisers to prepare for all scenarios. In the meantime, rival platforms are aggressively courting dislocated ad dollars. Whether TikTok can retain its advertiser base will largely depend on regulatory clarity and continued platform performance.
