Snap aims for growth as TikTok faces uncertain future in the U.S.

by Kimeko McCoy • May 23, 2024 •

Ivy Liu

“Right now, the uncertainty around TikTok is leaving people looking at, ‘Where else can we invest less time in?'” said Patrick Harris, Snap’s president of the Americas. “But we know that if we invest the time, we can get consistent returns that will help us continue to move the business forward and grow in a meaningful way, and that’s the path we’re on.”

Snap has been gearing up for growth in the last quarter.The company has been working to attract advertisers with recent incentives, improved ad products, and a new brand campaign to promote its services to consumers and marketers. Though its recovery from losses to profitability has been slow, Snap’s advertising business is projected to bring in nearly $1.2 billion in Q1 2024, following $1.36 billion in Q4 2023 and $1.19 billion in Q3 2023.

Harris said the platform still has room to grow and is expanding its advertiser base across all segments, from small businesses to large enterprises. That said, the TikTok ban could be the next chapter in Snap’s ongoing efforts to attract more ad dollars.

“Advertisers are now seriously looking for alternatives to this duopoly,” Harris added.

Snap isn’t alone: ​​It appears that profiting from the ban is a top priority for Google, too. According to Business Insider, The tech giant has encouraged advertisers to spend more on YouTube in the wake of the ban.

Digiday spoke to four agency executives for this article, none of whom had spoken directly to Snap, Google or other major platforms about the TikTok ban. But TikTok has been targeted since it began to gain significant market share. For example, Meta launched Reels, Snap launched Spotlight and YouTube launched Shorts, all in direct response to TikTok’s short-form video format. Even LinkedIn is said to be testing a new TikTok-like video feed.

“They’re not just going after TikTok’s revenue, but are actively positioning themselves as an alternative to paid social, where most of the top-performing ad units today are video-based,” Katia Konstantin, founder of performance marketing shop Digishop Girl, said in an email about YouTube.

Short videos are the hottest topic in the industry. Featured as a major theme at this year’s New FrontsSo it makes sense that platforms are focusing on promoting their own versions of TikTok to capture advertising revenue, said Jennifer Cole, chief media officer at ad agency VML.

“I wouldn’t say the incentives are abundant,” Cole said in an email, referring to TikTok’s competitors vying for ad dollars, “but I do think the platforms are working hard to be at the forefront of winning video ad dollars.”

Given the ongoing legal back-and-forth between TikTok and the US government, it’s hard to predict what will happen next, so brands are maintaining a wait-and-see approach, and for now, it’s business as usual.

“Brands and agencies are also putting contingency plans in place in case something were to suddenly change with TikTok,” Cole said. “Usually there’s a plan A and a plan B. Now we need plans A, B, C and maybe D. We want to be prepared.”

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