June 30, 2020

TikTok influencers in a fix post ban on the app; expect huge cut in earnings

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Mainly youth-driven with the largest group aged between 16 and 24, TikTok emerged as a preferred medium for influencer marketing and digital advertising over a short period. With brands paying content creators for direct branding or participating in hashtag challenges, it turned out to be a quick and convenient way of earning revenues. However, the sudden ban on ByteDance’s TikTok will cause a significant loss to the influencer community.

Influencers who confined to TikTok and didn’t expand their presence across other social media platforms are likely to be impacted the most. However, those who also had a presence on Instagram and YouTube, among others, will manage to channelise their campaigns and continue to earn.

Also Read: TikTok CEO Kevin Mayer to address 2,000 panic-stricken ByteDance India employees

“Anti-China sentiment had already started depleting the wallets of influencers. Creators having large followings on other channels like Instagram/Youtube may recover, but there will be a significant loss for them,” explains Honey Singh, co-founder, #ARM Worldwide. Unlike Youtube, TikTok does not have a revenue-sharing model with influencers. Whatever the influencers have been earning was directly through the brands who would rope in the influencer for TikTok challengers, promotions and sponsorships.

Most content creators stay active across social media platforms including TikTok, Instagram, YouTube and Facebook, among others.  They will also face monetary losses since brands have already started pausing their planned TikTok activities for now.

“The platform was used for influencer engagement. Given the massive fan following most influencers enjoyed, brands were engaging with them directly for promotion. I see those rates dropping down significantly now,” says Nimesh Shah, Head Maven, Windchimes Communications.

The ban on ByteDance apps including TikTok and Helo isn’t a sudden surprise for influencers. Business Today has learned that post-anti-china sentiment, which started with the outbreak of COVID-19 and spread with the current clash at the border, there has already been an impact in the earnings of influencers. While the apps have been removed from the respective app stores now, existing users continue to access the platform. Leveraging the gap, influencers have been posting live videos requesting their followers to stay in touch through their instagram profiles.

Also Read: No legal framework to ban TikTok! Crackdown on Chinese apps easier said than done

Industry experts believe that while there are no clear guidelines or clarity on the current situation, brands should quickly complete planned commitments with an additional post on linked channels like Instagram.

Influencers are in a fix over their promotions, campaigns and revenue. However, they continue to support the government’s decision. “The ban of TikTok is a big loss for creators as well as the ecosystem. However, irrespective of the business loss I might encounter, if the app has leaked any kind of data at some point of time, I would not like to use the app,” says Abhishek Bhatnagar, creator of verified handle ‘gadgetstouse’ with close to 3 lakh followers,  and over three million likes on TikTok. Bhatnagar has over 48,000 followers on his Instagram profile and close to 10 lakh subscribers on the YouTube page.

“Tiktok was just in its initial phases in terms of influencer marketing; it was hardly 15-20 per cent of overall budgets assigned for influencers marketing. So while it was a part of influencer marketing – it was not the backbone of it,” adds Singh. In a short span of time, TikTok helped change brand perception since marketers recently started experimenting with the platform for influencers and paid media.

In last two years since TikTok entered the Indian market, the platform has had over 155 million users in India as of November 2019. During the short period the company has been present in the country, it has registered 6x growth in one year. Mumbai, Delhi, Bengaluru, Pune, Hyderabad, Chennai, Ahmedabad, Jaipur, Kolkata and Indore have been the top 10 cities in terms of users for TikTok.

Also Read: TikTok ban: What’ll happen to Chinese apps on your phone?

Also Read: ‘$100 billion? May be not!’: How TikTok ban will impact ByteDance’s valuation

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