How A TikTok Ban Would Wreak Havoc On The Creator Economy

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According to Goldman Sachs, the creator economy is a $250 billion industry (expected to double by 2027), with 92% of brands signaling an increase in their influencer marketing investment this year. And with a potential TikTok ban on the horizon, it begs a few uncomfortable questions: What will a TikTok ban mean for the seven million businesses that advertise on the platform and one million influencers who earn a living by making videos there?

How A TikTok Ban Would Wreak Havoc On The Creator Economy

Scores of mid-market and small brands actively market on TikTok and while a ban would create major disruptions, it wouldn’t necessarily equate to an existential crisis.

Here to shed light on the situation is Eric Dahan, founder of Mighty Joy, which helps commerce-focused brands convert social communities into sales by leveraging TikTok Shops, affiliate marketing, gifting programs, and performance-based creator partnerships. Dahan was among the first to recognize the creator economy back in the early 2010s, and he was selected as a ‘30 under 30 CEO’ by both Forbes and Inc.

How it could happen

According to Dahan, there are two primary ways a TikTok ban might happen:

1. A change in ownership with no effect to the TikTok app or user experience.

2. A complete shutdown of the app if a deal is not reached, similar to what happened in India in 2020.

In the event of the former, there will be no effect to the user experience, however, the long-term roadmap of the app could be impacted since China is about five to seven years ahead of the west when it comes to social media adoption and functionality.

“That playbook would effectively be gone,” said Dahan.

In the event of the latter, creators will feel an immediate impact, especially those who cultivated their entire audience on TikTok. The creators for whom TikTok is a secondary platform, will shift back to their primary platforms like YouTube or Instagram. Native TikTok creators will have to “completely rebuild on another platform,” according to Dahan.

Impact to brands

Scores of mid-market and small brands actively market on TikTok and while a ban would create major disruptions, it wouldn’t necessarily equate to an existential crisis.

“TikTok is really the only social platform to date that has been successful when it comes to social commerce functionality,” said Dahan. “TikTok Shops drives billions of dollars in sales in the U.S. alone. For brands that are utilizing shops, the impact would be more severe as there is not a good social commerce alternative.”

When to pivot

To mitigate risk of a TikTok ban, Dahan recommends brands establish a direct relationship with their customers as much as possible, along with reducing their reliance on any one platform. For example, there are many Amazon brands that are looking to build an off-Amazon presence to reduce their reliance on the platform and build a defensible moat around their business.

“When it comes to specifically deciding which platforms are best to pivot to, I’d recommend starting off by identifying your most active customers, and see which platforms they’re spending their time and how they’re using the platform, and model out the entire customer journey for that platform,” said Dahan.

The creator conundrum

Breanna Stark is a pitmaster, author, and social media personality that specializes in low and slow Texas barbecue. She was raised in Houston, TX and has a passion for cooking over fire and teaching others how to do the same.

Breanna, along with her husband Andrew, have been competing on the competitive barbecue circuits since 2014 and, on a whim, decided to post the recipe for their award-winning baby back ribs on TikTok in March of 2021. Soon, she became one of the biggest female BBQ social media personalities in the country.

If a TikTok ban happened, Stark said she would lose 1.1 million followers, about 1/3 of her total follower count across platforms.

“I don’t think that a TikTok ban would significantly impact my income as a creator regarding paid partnerships,” said Stark. “Brands will always want to advertise. Whether on TikTok or other platforms such as Instagram and YouTube, creators will always have opportunities to create branded content.”

Where a TikTok ban would affect Stark’s income is with ad revenue and the TikTok Creator Rewards program.

“I make significantly more monthly from TikTok directly than all other platforms combined,” said Stark. “Aside from the financial impact, I will be very sad to lose the community I’ve built on TikTok over the past three years. TikTok is my home. It’s where I started creating content. Even if TikTok is banned, I will always consider myself to be a ‘TikToker.’”

At the end of the day, creators must be ready to pivot to ensure longevity in their careers.

“My advice to creators who have built most of their following on TikTok is to start diversifying their content and posting on all of the other major platforms immediately,” said Stark. “I am lucky to have built a strong following across platforms, and it’s important to be active in multiple places because anything can change at any given moment in time.”