The State of TikTok: The Landscape in Q2 2023

By: Hannah Brown

April 5, 2023  |  

If you’re looking to learn more about TikTok and how you could leverage it to build, grow, or transform your business, Oodle can help!

TikTok has ruled the internet and online social interaction with short-form (and now long-form) videos where users participate in viral challenges, lip-sync and dance to music or trending audio clips, show off comedic skits, and share their hot takes on society at large. The landscape of this platform has changed much in the past two years, from demographic usage to heightened government concerns around user data. With the platform’s future in the U.S. currently under scrutiny in Congress, there is much to consider in how marketers should harness the platform now and in the future state of its existence.

Evolution of TikTok

TikTok is owned by ByteDance, which was founded in 2012 by Zhang Yiming. Yiming took an interest in the app, an app known for making short videos with music that was seeing large success in America, particularly among teenagers. In 2017 after attempting to imitate the app himself, Yiming acquired the app and rebranded it into what we know today as TikTok. But there are plenty of apps out there where you can use music and video together, so what sets TikTok apart? Instead of prioritizing keeping up with connections and communicating with family and friends, TikTok operates more as an entertainment avenue with its algorithm delivering exactly what you want to see in a never-ending stream of content picked just for you and only you. TikTok’s popularity skyrocketed at the start of the pandemic and is now used by 1 in 3 Americans with 90% of users accessing it on a daily basis.

Current State of TikTok

TikTok isn’t the first social media app to face scrutiny from lawmakers, but it is the latest. After successfully banning the app from all devices issued by the U.S. government in December of 2022, in January of 2023 a bill was introduced to take measures one step further by proposing a nationwide ban for TikTok. The proposed legislation and current congressional conversations are rooted in concerns of U.S. lawmakers that the Chinese government could be using the app to “spy” on American citizens, promote Communist propaganda, and collect private data. Other than a nationwide ban, lawmakers would also settle for a forced sale of the app to U.S. ownership.

In 2022, in response to congressional concerns, TikTok stood up to the U.S. Data Security (USDS) division to provide heightened transparency into TikTok’s efforts and new protocols to protect U.S. data and users and to establish trust and confidence in their systems and controls within the U.S., for example:

  • Routing 100% of U.S. traffic to a secure environment in the Oracle Cloud Infrastructure
  • Roadmapping plans to delete historical data from Virginia and Singapore
  • Reviewing the TikTok source code

This division is also dedicated to managing any potential cyber threats to user data, continuously working to validate security standards including earning one of the most globally recognized information security standards certifications, ISO 27001. In early 2023 TikTok further invested in these initiatives by announcing the formal creation of TikTok U.S. Data Security Inc., a wholly-owned subsidiary of TikTok. You can hear more about the current and future safeguards here. Aside from this, the key statement from TikTok CEO Shou Zi Chew was “The bottom line is this – American data is stored on American soil by an American company overseen by American personnel.”

What’s Next?

One of the most pressing issues to consider is how a TikTok ban would impact Americans’ First Amendment right to free speech. If the legislation passes that would make TikTok the first social media app to be banned by the U.S. government, leaving many logistical questions that are currently left unanswered. What would the legal process look like? How long will the ban take to go into effect? In addition to constitutional rights, there are also concerns surrounding the economic impact that ban would have on the U.S. with TikTok operating its own ad platform that businesses utilize to generate sales, content creators relying solely on TikTok as their main source of income, and the elimination of thousands of U.S. jobs. With the U.S. economy already in a weakened state, it’s expected that the potential elimination of this revenue will encourage second thoughts.

And although the proposed legislation is seeing bipartisan support, it’s far from unanimous. A more feasible and likely outcome that tech-savvy Democrats are in support of is pushing legislation that also acknowledges the privacy and data concerns presented by U.S.-based apps.

Oodle’s Take

Regardless of the current climate, TikTok isn’t going away. While the usage and storage of its data transition to a more secure state, we’re clapping our hands in appreciation. As Congress works to fully understand the situation at hand, there is not enough precedent set for a restriction regarding what they are currently discussing (i.e. full restriction). We expect to see further improvements to data management and usage in the U.S., but if social platform history tells us anything, you can get away with quite a bit whether you’re owned in the U.S. or any other country (cough cough, looking at you, Meta and your Cambridge Analytica scandal as only one example).

Data privacy is of the utmost importance and while TikTok is taking necessary steps to address immediate concerns, there is still much to be done. While TikTok works through these improvements, we don’t recommend pausing your hard work on this platform organically or through paid avenues. We’ll continue to provide information on further developments, but we are optimistic about the future the platform holds for users, creators, and advertisers alike.

If you’re looking to learn more about TikTok and how you could leverage it to build, grow, or transform your business, Oodle can help!


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