TikTok’s Economic Impact Report Highlights Platform’s Significance for Small Businesses
As the debate surrounding a potential TikTok ban in the U.S. continues, the popular short-form video app has released an economic impact report on Thursday. The report, conducted by Oxford Economics, emphasizes the platform’s substantial contribution to small- and medium-sized businesses (SMBs) and the overall economy.
TikTok’s Economic Footprint
According to the report, TikTok generated an impressive $14.7 billion for SMBs in 2022, with a total economic activity of $24.2 billion supported through small businesses’ use of the platform. The app has become a vital tool for over 7 million U.S. businesses, directly supporting 98,000 jobs within SMBs and a total of 224,000 jobs through small business activity on TikTok in 2023.
“TikTok generated an impressive $14.7 billion for SMBs in 2022, with a total economic activity of $24.2 billion supported through small businesses’ use of the platform.”
Methodology and Timing
Oxford Economics measured SMB activity on TikTok, ad spend, ROI, and utilized census data and other metrics to reach its conclusions. While the report’s preparation likely took some time, its release coincides with the ongoing discussions surrounding a potential TikTok ban in the U.S.
Legislative Developments
In March, a bill that could ban TikTok passed in the House of Representatives with bipartisan support. President Biden has expressed his intention to sign the bill into law if it also passes in the Senate. Interestingly, former President Trump, who previously sought to ban TikTok, has reversed his stance, now opposing a ban and suggesting that Meta would benefit from such a move.
Competitors Prepare for Potential Ban
As the possibility of a TikTok ban looms, competitors like Meta are gearing up to capitalize on the opportunity. Facebook recently introduced a new video player that prioritizes vertical format videos, similar to TikTok’s layout. Other platforms, such as YouTube, and emerging startups in the short-form video space could also benefit from a potential TikTok ban.
TikTok’s Economic Impact as a Defense
TikTok’s economic report serves as a strategic move to highlight the app’s importance and argue against a potential ban. The report emphasizes that small business activity on TikTok supported $5.3 billion in tax revenue last year, with businesses utilizing the platform for marketing and advertising purposes. Case studies within the report showcase how TikTok has helped drive sales, website traffic, and additional revenue for business owners.
Creators’ Influence on Previous Ban Attempts
In 2020, a group of TikTok creators successfully blocked Trump’s TikTok ban by arguing that it would negatively impact their professional opportunities and ability to generate income. This precedent suggests that tying the ban to the app’s economic impact could be an effective strategy for TikTok.
Uncertain Future
Despite TikTok’s efforts to mobilize users to protest the ban, the bill still faces challenges in passing the Senate, particularly now that the Republican party’s leader has reversed his position on the matter. As the debate continues, the future of TikTok in the U.S. remains uncertain.
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TikTok turning into the unsung hero of small businesses, who would’ve thunk it?
Looks like TikTok’s not just for dancing videos after all; who knew it was powering the economy too?