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TikTok’s Latest Ad Targeting Provisions Reflect Increasing Revenue Pressure on the App



TikTok Expands Test of Downvotes for Video Replies, Adds New Prompts to Highlight its Safety Tools

This has certainly raised some eyebrows among social media and privacy analysts.

Today, TikTok has started showing users in Europe, the UK and Switzerland new, in-app notifications informing them of changes to its data collection policies.

As you can see in these examples, shared by social media expert Matt Navarra, TikTok is changing the way it uses people’s data within its ad targeting systems.

More specifically, TikTok explains that:

If you are 18 or over and in the EEA, the UK, or Switzerland, TikTok is making a legal change to how it will use your on-TikTok activity to personalize your ads. Under applicable data protection law, companies like TikTok must have a legal basis for processing your information. Historically, TikTok asked you for your “consent” to use your on-TikTok activity and off-TikTok activity to serve you personalized ads. From 13 July 2022 TikTok will rely on its “legitimate interests” as its legal basis to use on-TikTok activity to personalize the ads of users who are 18 or over.”

Note the inverted commas around ‘consent’. Seems like a red flag in itself.

Essentially, TikTok’s saying that if you have not consented to personalized ads in the past, which TikTok has to allow as part of the EU’s data privacy provisions, you’ll soon get a form of personalized ads anyway, based on your in-app activity. TikTok appears to be looking to use a technicality to maximize the performance of its ads, even among users who have opted out of personalized targeting.

Which is not surprising, I guess, but it does point to the increasing pressure within TikTok to start making real money from the app – which could result in more ads being shown to users over time.

While Twitter remains in ownership limbo, and Meta is diverting more and more of its resources into its metaverse push, it seems, on the face of it, like TikTok is currently the only platform on a clear upward trajectory, with usage counts rising, more ad dollars coming in, and new programs designed to capitalize on the rise of eCommerce and the Creator Economy.

TikTok, at least right now, is the clear winner in the social media sphere are present, right?

Well, maybe not as much as you’d think.

In recent months, TikTok owner ByteDance has faced a range of new challenges, including, most notably, a change in the regulations relating to data and algorithm usage in China.

As per The South China Morning Post:

As with many Chinese tech companies, ByteDance’s prospects for profit growth in the domestic market remain clouded by tightened regulations. The central government has become more intrusive in regulating short video content. A new law governing the use of recommendation algorithms went into effect in March.

CCP regulators, increasingly frustrated at their inability to reign in content within these apps, have sought to exert more control, which has extended to all of ByteDance’s key income sources.

That increased regulatory scrutiny has already wiped $100 billion from the value of ByteDance, forcing the company to consider sell-offs, staff cuts and more as it works to right the ship.

That pressure has also extended to TikTok, which, aside from these new data usage changes, has also been looking to enforce more China-centric style policies in terms of what’s expected of employees, and the content that it allows in the app.

ByteDance executive Joshua Ma, who had been working with TikTok’s UK eCommerce team, was recently forced to stand down after trying to impose tough working conditions on staff, in order to hasten its expansion.

As reported by The Financial Times:

“The launch of TikTok’s livestream shopping feature in the UK triggered a staff exodus from the London ecommerce team. Some staff complained of an aggressive company culture, with unrealistic targets and expectations that run counter to British working practices. Staff said they were expected to frequently work more than 12 hours a day, starting early to accommodate calls with China and ending late as livestreams were more successful in the evening, with overtime celebrated in internal communications. Some members of the ecommerce team were removed from client accounts after going on annual leave.”

Ma has also stated that he ‘doesn’t believe’ in maternity leave, which was also reported by The Financial Times, and which, incidentally, led to another issue on the content side, with TikTok then reportedly considering a move to censor keywords such as ‘Financial Times’, ‘Joshua Ma’, ‘maternity’, and ‘toxic’ on the platform in order to weaken the Financial Times report’s impact.

TikTok says that this ban was never implemented, but it highlights a fundamental concern within TikTok’s approach, in that a first instinct of at least some execs was to seek to silence criticism and dissent.

And you’d have to assume that at least some of this extends from the pressure being exerted on the company’s Beijing HQ.

How this new data usage policy relates is unclear, but with TikTok still only contributing around a third of ByteDance’s overall revenue, despite its global reach, you can imagine that ByteDance will be increasingly keen to squeeze more cash out of the app – and sooner, rather than later.

Which remains a challenge. ByteDance has seen big revenue success with the Chinese version of TikTok (called ‘Douyin’) by implementing eCommerce integrations, primarily driven by the take up of live-stream commerce in China.

TikTok commerce

According to ByteDance, over 20 million individual content creators and live-streaming hosts are now generating income from its apps, with total live shopping revenues in the Chinese market set to reach $423 billion this year. That’s more than the entire GDP of Ireland.

But the CCP’s crackdown is also impacting this element, with a bigger push to catch out influencers that haven’t been fulfilling their tax burden, which has already impacted many local streaming stars.

Add to this the fact that more brands are reconsidering their relationships with streamers (due to influencers demanding ever-more attractive deals), and the signs indicate that a reckoning is coming for the booming sector, which will again impact ByteDance.

It’s also not great for its push on the same with TikTok. Despite its popularity, TikTok is still developing a more equitable business process, especially in regards to ensuring its top stars get paid. TikTok’s expected to bring in around $11.6 billion in ad revenue this year, but it still doesn’t have an effective means to redistribute that to creators, which could, eventually, see many of them drift off to YouTube and Instagram instead.

TikTok is working on this, as noted, but a key focus, as it has been in China, is live-stream commerce, which it’s hoping will become a golden goose in western regions as well. But it hasn’t yet, and many Chinese trends haven’t translated to other markets in the past – and it could well be that TikTok creators just want to get paid for making videos, which they can’t do on TikTok, but they can via YouTube’s Partner Program.

Could that see more creators losing interest in the platform, and taking their audiences with them? That’s what eventually killed off Vine, and it remains a genuine possibility for TikTok as well. Which is why TikTok is desperate to get back into India, where it’s still banned, while it’s also looking to implement more ad options and tools to maximize its revenue intake while it can.

Essentially, when viewed on a broader scope, you can see how the increasing pressure on ByteDance is weighing on TikTok as well, and will likely force it to push forward with various revenue tools, including more ads, which poses a big risk for its growth potential.

That’s not to say TikTok’s on the way out just yet. Far from it, but there are signs there, and there are concerns that you may not recognize when looking at its growth numbers in isolation.

Maybe there are ways around it – maybe TikTok could get sold off and operate as a separate entity, or maybe its commerce options will be a hit and facilitate bigger business opportunities for the app.

Either way, you can expect to see more changes in the app as the pressure mounts on its parent business.

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U.S. Judge Blocks Montana’s Effort to Ban TikTok in the State



U.S. Judge Blocks Montana’s Effort to Ban TikTok in the State

TikTok has won another reprieve in the U.S., with a District Judge blocking Montana’s effort to ban the app for all users in the state.

Back in May, Montana Governor Greg Gianforte signed legislation to ban TikTok outright from operating in the state, in order to protect residents from alleged intelligence gathering by China. There’s no definitive evidence that TikTok is, or has participated in such, but Gianforte opted to move to a full ban, going further than the Government device bans issued in other regions.

As explained by Gianforte at the time:

The Chinese Communist Party using TikTok to spy on Americans, violate their privacy, and collect their personal, private, and sensitive information is well-documented. Today, Montana takes the most decisive action of any state to protect Montanans’ private data and sensitive personal information from being harvested by the Chinese Communist Party.”

In response, a collection of TikTok users challenged the proposed ban, arguing that it violated their first amendment rights, which led to this latest court challenge, and District Court Judge Donald Molloy’s decision to stop Montana’s ban effort.

Montana’s TikTok ban had been set to go into effect from January 1st 2024.

In issuing a preliminary injunction to stop Montana from imposing a full ban on the app, Molloy said that Montana’s legislation does indeed violate the Constitution, and “oversteps state power”.

Molloy’s judgment is primarily centered on the fact that Montana has essentially sought to exercise foreign policy authority in enacting a TikTok ban, which is only enforceable by federal authorities. Molloy also noted that there was apervasive undertone of anti-Chinese sentiment” within Montana’s proposed legislation.

TikTok has welcomed the ruling, issuing a brief statement in response:

Montana attorney general, meanwhile, has said that it’s considering next steps to advance its proposed TikTok ban.

It’s a win for TikTok, though the Biden Administration is still weighing a full TikTok ban in the U.S., which may still happen, even though the process has been delayed by legal and legislative challenges.

As I’ve noted previously, my sense here would be that TikTok won’t be banned in the U.S. unless there’s a significant shift in U.S.-China relations, and that relationship is always somewhat tense, and volatile to a degree.

If the U.S. Government has new reason to be concerned, it may well move to ban the app. But doing so would be a significant step, and would prompt further response from the C.C.P.

Which is why I suspect that the U.S. Government won’t act, unless it feels that it has to. And right now, there’s no clear impetus to implement a ban, and stop a Chinese-owned company from operating in the region, purely because of its origin.

Which is the real crux of the issue here. A TikTok ban is not just banning a social media company, it’s blocking cross-border commerce, because the company is owned by China, which will remain the logic unless clear evidence arises that TikTok has been used as a vector for gathering information on U.S. citizens.

Banning a Chinese-owned app because its Chinese-owned is a statement, beyond concerns about a social app, and the U.S. is right to tread carefully in considering how such a move might impact other industries.

So right now, TikTok is not going to be banned, in Montana, or anywhere else in the U.S. But that could still change, very quickly.

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Israeli president tells Musk he has ‘huge role’ in anti-Semitism



Elon Musk, the world's richest person, said in video remaks that Hamas militants 'have been fed propaganda'

Elon Musk, the world’s richest person, said in video remaks that Hamas militants ‘have been fed propaganda’ – Copyright POOL/AFP Leon Neal

Israel’s president told Elon Musk on Monday that the tech mogul has “a huge role to play” to combat anti-Semitism, which his social media platform is accused of spreading.

The meeting came after the world’s richest person visited a kibbutz community devastated in attacks by Hamas militants on October 7, and met with Prime Minister Benjamin Netanyahu and defence officials.

Musk has been criticised over what critics say is a proliferation of hate speech on X, formerly Twitter, since his takeover of the social media site in October 2022.

He has been accused by the White House of “abhorrent promotion” of anti-Semitism after endorsing a conspiracy theory seen as accusing Jews of trying to weaken white majorities.

Israel’s figurehead President Isaac Herzog told him: “Unfortunately, we are inundated by anti-Semitism, which is Jew hatred.

“You have a huge role to play,” he said. “And I think we need to fight it together because on the platforms which you lead, unfortunately, there’s a harbouring of a lot of… anti-Semitism.”

Musk did not mention anti-Semitism in his video remarks released by Herzog’s office, but said Hamas militants “have been fed propaganda since they were children”.

“It’s remarkable what humans are capable of if they’re fed falsehoods, from when they are children; they will think that the murder of innocent people is a good thing.”

On October 7 Hamas militants broke through Gaza’s militarised border into southern Israel to kill around 1,200 people and seize about 240 hostages, according to Israeli officials, in the worst-ever attack since the nation’s founding.

Vowing to destroy Hamas in response, Israel has carried out a relentless bombardment of targets in Gaza, alongside a ground invasion, that the Hamas government says has killed almost 15,000.

A temporary truce has been in effect since Friday.

– Talk of satellites –

Earlier Monday, Netanyahu and Musk discussed “security aspects of artificial intelligence” with senior defence officials, the Prime Minister’s Office said.

Musk and Netanyahu held a conversation on X following their tour of Kfar Aza, one of the communities attacked by Hamas.

“We have to demilitarise Gaza after the destruction of Hamas,” Netanyahu said, calling for a campaign to “deradicalise” the Palestinian territory.

“Then we also have to rebuild Gaza, and I hope to have our Arab friends help in that context.”

Netanyahu told Musk he hoped to resume United States-mediated normalisation talks with Saudi Arabia after Hamas’s defeat and “expand the circle of peace beyond anything imaginable”.

The war stalled progress towards a Saudi-Israel normalisation deal, and in early November Saudi Arabia’s de facto ruler denounced the conduct of Israeli forces fighting Hamas in Gaza.

Israel’s Communications Minister Shlomo Karhi said his country had reached an understanding in principle on the use of Starlink satellites, operated by Musk’s company SpaceX, in Israel and the Gaza Strip “with the approval of the Israeli Ministry of Communications”.

Starlink is a network of satellites in low Earth orbit that can provide internet to remote locations, or areas that have had normal communications infrastructure disabled.

In September, Netanyahu urged Musk “to stop not only anti-Semitism, or rolling it back as best you can, but any collective hatred” on X.

Musk said at the time that while his platform could not stop all hate speech before it was posted, he was “generally against attacking any group, no matter who it is”.

X Corp is currently suing nonprofit Media Matters on the grounds that it has driven away advertisers by portraying the site as rife with anti-Semitic content.

Musk has also threatened to file suit against the Anti-Defamation League, a Jewish advocacy group, over its claims that problematic and racist speech has soared on the site since he completed his $44-billion takeover.

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Is this X’s (formerly Twitter) final goodbye to big advertisers? It looks like it



Is this X's (formerly Twitter) final goodbye to big advertisers? It looks like it

It looks like big advertisers are leaving X (formerly Twitter) for good and its owner Elon Musk couldn’t care less.

In the packed DealBook conference in New York on Wednesday, he bluntly told them to shove it. 

This response came after another round of advertisers including IBM, Apple, CNN and Disney bailed on his social network after Musk seemingly supported an antisemitic conspiracy theory last month by responding to an X user’s post — a move he’s since admitted was silly and apologized for. Musk was less remorseful over the uproar caused among advertisers, telling the room: “This advertising boycott is going to kill the company… let’s see how Earth responds to that.”

For many large marketers, this marks the end of a drawn-out farewell (lasting a whopping 13 months) to advertising on X since Musk took over. Surprisingly, even some of X’s own staff members are now calling it quits. Freelance journalist Claire Atkinson reported a “wave of resignations” from CEO Linda Yaccarino’s sales team, including a few of the remaining ad executives who were there before she officially joined in June. Musk’s actions are essentially reversing any recent progress made in reviving X’s advertising business.

Lou Paskalis, CEO and founder of AJL Advisory confirmed that Musk’s comments were indeed another extra nail in the already well sealed coffin because it reaffirmed what most large advertisers already know — Musk resents having to be beholden to them.

“He is trying to position their legitimate brand suitability concerns, largely precipitated by his ongoing antics on X, as a vast, left-wing conspiracy among advertisers to ‘blackmail’ him into constraining his right to free speech,” Paskalis said. “As someone who spent over three decades in the ad buying business, it’s laughable to think that we could all act with that level of coordination, presumably in secret.”

This event highlights how out of touch Musk is with what keeps his company running. He takes an ad boycott as a personal insult when, truthfully, it’s just part and parcel of managing a platform these days. Look at how often YouTube and Meta have dealt with similar issues over the years. The difference? The bigwigs at those companies prioritized protecting their businesses, not their public personas, and were willing to make compromises to win back advertisers. Not that it took much to win back those ad dollars — advertisers rely on those platforms as much as the platforms rely on them.

“It’s just a very sensible decision not to continue advertising on that platform which poses such a strong brand safety risk,” said Ebiquity’s chief strategy officer Ruben Schreurs. “To do all this on stage is unheard of, I’ve never seen anything like it before.”

The largest advertisers seem to agree. Unlike their previous boycotts of advertising on X, this one is permanent for many of them. Some of the most active accounts like Disney, Paramount, Liongsate and Sony Pictures haven’t posted in nearly two weeks. This chimes with what one senior ad exec, who had been in touch with a number of X’s advertisers over the past year, told Digiday last month. Advertisers who had continued to spend on the platform only paid a fraction of what they used to prior to Musk, out of fear of getting called out by Musk if they didn’t.

“It’s easier to pull advertising than it is to return, and what makes the X ad boycott unique is that it isn’t primarily about content adjacency or moderation,” said Jasmine Enberg, principal analyst, social media at Insider Intelligence. “Advertisers are concerned about the reputational damage and the uncertainty of doing business with Musk, and yesterday’s comments will deepen the rift between them.”

An impossible job has now become even more challenging for Yaccarino. Ad dollars weren’t exactly flowing into the social network before Musk’s latest rant. X has averaged a 55% year-over-year revenue decline, according to Guideline. This figure increased to 61% YOY between May and August 2023 — despite Yaccarino joining the company during the summer. 

“The hill she [Yaccarino] must climb to rekindle advertiser demand for the platform just went from steep to vertical,” said Paskalis. “I don’t know how anyone could overcome a direct verbal assault of the magnitude that Musk delivered at the DealBook conference against a customer base already alarmed by his previous rage inducing, divisive and dog whistle laden tweets. None of this will cause Linda to leave, in my opinion, as she sees quitting as failure and failure is not an option in her calculus, no matter what damage may be done to her reputation.”

X did not respond to Digiday’s request for comment.

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