As U.S. lawmakers consider the possibility of banning TikTok, the short-form video app owned by ByteDance released an economic impact report on Thursday. In it, the company touts that the platform generated $14.7 billion for small and medium-sized businesses (SMBs) last year, and that SMB usage of TikTok led to an additional $24.2 billion in total economic activity.
Additionally, more than 7 million U.S. businesses rely on TikTok, with 224,000 jobs supported by small business activity on the platform in 2023. Of those, 98,000 jobs were supported directly within small businesses on TikTok. The most affected states include California, Texas, Florida, New York, and Illinois.
The study was conducted by economic forecasting group Oxford Economics. We measured SMB activity on TikTok along with ad spend and his ROI, leveraging census data and other measurements to draw our conclusions.
A report of this size and scope cannot be assembled overnight, but the timing of the release is probably no coincidence.
In March, the House of Representatives passed a bill to ban TikTok. President Biden said he would sign the bill into law if the Senate passes it. Worryingly for TikTok, the bill received bipartisan support and passed the House by a vote of 362-65, despite former President Trump's change in position on the issue. The Trump administration previously sought to ban TikTok, citing national security risks, but Trump is now opposing the ban, saying it would benefit meth.
Meta is clearly preparing for a future where TikTok could be banned unless it spins out from ByteDance. On Wednesday, Facebook updated to support a new video player across the social network. Reels, long-form, and live videos are recommended, but by default he is displayed in portrait format, similar to TikTok.
A ban on TikTok could also give YouTube and other short-form video platforms more exposure, opening the door for startups to compete in the space.
TikTok's economic report argues why the app should be allowed to continue operating, noting that $5.3 billion in tax revenue last year was supported by small business activities on TikTok, such as its marketing and advertising platform. This is a clear attempt.
The company also presented various case studies in which management claims TikTok has helped drive sales, website traffic, and other additional revenue.
Tying the ban to the app's economic impact is a solid PR strategy. Specifically, in 2020, a group of TikTok creators successfully asked a judge to block President Trump's ban on TikTok on the grounds that it would affect their ability to engage in brand sponsorships and other professional opportunities and activities, including brand sponsorships. It's been since. income.
TikTok is urging users via in-app messages to call Congress to protest the ban, but the bill still faces a difficult path before passing the Senate, with Republican leaders calling for a ban. This is especially true now that we have changed our stance on the matter.