In this episode of Adtech Unfiltered, Malorie Benjamin joins host Noor Naseer to unpack how the agency pitch process is evolving.
Key Takeaways:
After years of uncertainty, TikTok's sale to a group of US investors has finally given TikTok advertisers something they haven't had in a while: stability.
For years, regulatory volatility kept many advertisers from making long-term commitments on the platform. After all, why build a strategy around an app that might eventually cease to exist in the US? Now that the threat of a ban is off the table and the sale is finalized, advertisers can plan with more confidence than they’ve had in years.
Still, this new era of TikTok comes with unanswered questions that advertisers would do well to keep tabs on. Potential changes to the app’s famed algorithm, new privacy concerns, the evolution of TikTok commerce, and the development of AI-led advertising features stand out as the most important areas to watch in the coming months.
TikTok's algorithm is, in many ways, the true heart of TikTok itself. It's what fueled the app's rise to prominence and what keeps users so deeply engaged (see: “I built this algorithm brick by brick”). As such, whether the algorithm will change under new ownership has become one of the biggest questions for users and advertisers alike.
The good news? The owners are incentivized to keep things as similar as possible to not rock the boat with users and advertisers. Still, even subtle changes could alter the user experience in meaningful ways—and some algorithm changes are essentially baked into the deal itself. The app’s new owners (a group called TikTok USDS Joint Venture LLC) have licensed the algorithm to Oracle, and stated that they will “retrain, test, and update the content recommendation algorithm on US user data.”
Major content changes seem unlikely in the short term, but significant questions remain as to how this group of investors will influence what people see in their TikTok feeds. This concern isn’t lost on users: Shortly after the sale, many reported signs of content suppression on the app. Perception matters too: Whether changes are happening or not, if users feel like their feeds are shifting, that could affect usership and engagement. User sentiment is already in flux, with one recent survey finding that one-third of Gen Z users now feel they must actively train their TikTok algorithms because they’re not as personalized as they once were.
Considering this, advertisers should monitor TikTok usership and engagement over the coming months to stay abreast of any changes that may occur as a result of the algorithm’s evolution.
Algorithm uncertainty isn’t the only perception risk advertisers should track. TikTok’s new privacy policy presents another layer for advertisers to consider. The app is now collecting more user data, which has garnered privacy concerns from both users and human rights experts. Even Gen Z—the generation that drove TikTok's rise—is taking notice: 64% of Gen Z TikTok users say the sale made them more aware of their data.
This presents a potential risk for advertisers, as these privacy concerns could impact usership and engagement. As with the algorithm, the key for advertisers is to keep a close eye on how these concerns play out in the numbers.
How the commerce side of TikTok will develop under new ownership is another open question worth watching. Oracle—now a key player in TikTok's new ownership structure—has deep roots in retail commerce and supply chain management, which could have notable implications for TikTok Shop. If Oracle further integrates TikTok with new commerce solutions or introduces an Oracle commerce solution for the app, that could be a significant selling point for advertisers looking for closed-loop measurement on retail and commerce campaigns.
The flip side, though, is balance. If the platform leans too heavily into commerce at the expense of entertainment content, the user experience could suffer. Already, 79% of Gen Z TikTok users miss the early days of the app, before the surge in brand partnerships and the launch of TikTok Shop. Advertisers should monitor how that balance plays out, and whether engagement holds steady as the commerce side of the app continues to evolve.
Oracle's involvement also raises questions about where TikTok's AI-driven advertising capabilities are headed. Meta has set a high bar with campaigns that leverage AI for campaign builds, optimization, and audience targeting. Before the sale, TikTok was just scratching the surface in this area. With Oracle now in the mix, it's reasonable to expect TikTok's AI-led advertising offerings to accelerate.
If that is how things play out, creative is going to be an even bigger lever on TikTok. With AI taking on more of the campaign building and optimization work, the brands investing in UGC, influencer content, and platform-native creative will have a meaningful edge. Those that aren't will find it increasingly difficult to perform.
Overall, while there are some big question marks in the TikTok advertising space post-sale, the outlook is mostly positive. The app’s future is stable, advertising performance appears to have remained consistent, and TikTok continues to be cost-efficient relative to other social platforms, with strong conversions and CPA.
That said, the advertisers who keep a close eye on the questions outlined above—around the algorithm, privacy, commerce, and AI-led advertising—will be best positioned to navigate the platform successfully as this new chapter continues to unfold.
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AI is poised to transform more than just TikTok advertising. To see how marketing teams at leading brands and agencies are already putting it to work (and where the challenges still lie), check out AI and the Future of Marketing.