TikTok’s New Era: Can It Avoid the X Factor for Advertisers?
After years of uncertainty, TikTok appears poised to navigate a clearer path forward in the U.S. market with a new ownership structure. But the question looming over marketers isn’t just if TikTok will survive, but how it will perform under new leadership – and whether it can avoid the pitfalls that plagued X (formerly Twitter) after Elon Musk’s acquisition.
The Ownership Shuffle: A Breakdown
The deal, finalized in January, sees Oracle, Silver Lake, and Abu Dhabi’s MGX taking a 45% stake in TikTok USDS Joint Venture LLC. ByteDance will retain 20%, while existing investors hold roughly a third. This arrangement aims to address national security concerns while maintaining some Chinese influence. However, the shift has already sparked anxiety among marketers who remember the turbulence following Musk’s takeover of X.
Echoes of X: A Cautionary Tale
The X experience serves as a stark warning. Musk’s rapid changes – from rebranding to content moderation policies – alienated advertisers and triggered a mass exodus of ad spend. “From the advertiser perspective, it almost felt like you were just watching this chaos unfold that you can’t control,” says Kira Henson, Director of Paid Social and Search at Good Apple. X’s ad revenue, while recovering, still lags significantly behind TikTok’s. eMarketer forecasts X will generate $2.46 billion in ad revenue this year, a fraction of TikTok’s projected $17 billion+ in U.S. ad revenue alone.
Executive Departures and the Talent Drain
Like X, TikTok has experienced a wave of executive departures. Key leaders in advertising and business solutions, including Sameer Singh and Blake Chandlee, have left the company. This loss of institutional knowledge is a major concern for marketers. Noah Mallin, founder of Mallination, notes, “Losing that level of talent understanding of what advertisers are looking for, that’s hard to make up for.” The fear is that a lack of experienced leadership could lead to missteps in ad strategy and execution.
The Political Minefield
TikTok’s journey hasn’t been solely about business; it’s been deeply intertwined with politics. Former President Trump’s attempts to ban the app, driven by national security concerns, created years of uncertainty. While Trump’s stance has softened, the potential for future political interference remains. The involvement of Larry Ellison, a prominent Oracle executive and known Trump supporter, in the new ownership structure adds another layer of complexity. Marketers are wary of the algorithm becoming a political battleground.
Brand Safety and Algorithm Concerns
Beyond political pressures, brand safety is a paramount concern. Advertisers fled X due to concerns about hate speech and misinformation. TikTok must demonstrate a commitment to maintaining a safe and positive environment for brands. Equally important is preserving the app’s famed “For You” page algorithm. Creators fear the algorithm could be compromised under new ownership, potentially diminishing user engagement and ad effectiveness.
TikTok’s Advantages: Performance and E-Commerce
Despite the challenges, TikTok possesses significant advantages that X lacks. Its ad performance consistently outperforms other platforms, and its foray into e-commerce with TikTok Shop has been remarkably successful. TikTok Shop generated over $500 million in U.S. sales during Black Friday/Cyber Monday 2025. This strong performance, coupled with a growing user base, gives TikTok a degree of resilience.
The Role of TikTok Shop
TikTok Shop is a game-changer. It seamlessly integrates shopping into the user experience, driving conversions and providing valuable data for advertisers. This direct-to-consumer capability sets TikTok apart from competitors and strengthens its appeal to brands. The success of TikTok Shop demonstrates the platform’s ability to innovate and adapt to changing consumer behavior.
What About User Experience?
Ultimately, TikTok’s fate hinges on maintaining a positive user experience. If the app remains engaging and relevant, advertisers will likely follow. Henson emphasizes, “If the user experience holds steady, we expect spend to fluctuate only as media buyers pause to recalibrate their data. But if these updates negatively impact how users interact with the app, the shift in spend could signal a migration to where the user attention has moved next.”
FAQ: TikTok’s Future
- Will TikTok be banned in the U.S.? While the threat of a ban has diminished with the new ownership structure, it’s not entirely off the table.
- How will the new ownership affect advertisers? Advertisers are cautiously optimistic but are closely monitoring the platform for any changes in performance or brand safety.
- Is TikTok Shop here to stay? TikTok Shop is proving to be a significant revenue driver and is expected to continue growing in popularity.
- Will the TikTok algorithm change? There are concerns that the algorithm could be altered, but TikTok has stated its commitment to maintaining its core functionality.
TikTok’s journey is far from over. The platform faces ongoing scrutiny and potential challenges. However, its strong performance, innovative features, and dedicated user base position it for continued success – provided it can navigate the complex landscape of politics, regulation, and advertiser expectations.
Want to learn more about social media advertising trends? Explore our other articles on digital marketing strategies.
