TikTok ad spend growth slows amid ban talks

Despite cooling ad spend growth, TikTok remains a compelling advertising platform due to its massive user base and strong engagement rates.

TikTok’s advertising momentum is slowing as uncertainty over a potential U.S. ban looms.

By the numbers:

• Ad spend on TikTok grew 19% year-over-year in March, cooling to 11% in April and 6% in May.
• Total ad spend from January to May 2024 reached $1.5 billion, up 11% from the same period in 2023.
• Nine out of 20 advertising categories saw month-over-month increases in April.

Between the lines. Advertisers are shifting their focus on TikTok from brand awareness to more performance-driven ROI goals.

• CPMs for upper-funnel metrics were up 15% year-to-date at one agency.
• Click-through rates increased 27% in April compared to March.

Why we care. Despite the uncertainty that the potential ban brings and some slow growth, the platform still shows strong engagement metrics, which advertisers should keep considering in their media mix.

Stagnating numbers. TikTok’s user growth is stagnating, particularly among younger demographics.

• The percentage of weekly users aged 18-24 dropped from 35% in 2022 to 25% this year.
• Users aged 35-44 increased from 16% to 19% in the same period.

The big picture. Despite concerns, advertisers still find value in TikTok’s massive user base and engagement rates.

What to watch. How advertisers and users respond to ongoing discussions about TikTok’s future in the U.S. market.