Some are hesitant to commit to upfront ad inventory

Brands are showing “noticeable hesitation” in immediately committing to up-front ad inventory or reserving ad space before the actual campaign runs, according to the first executive. This is resulting in spend commitments being booked closer to the campaign running. Fewer ad dollars have been reserved for February compared to last year. While key ad inventory for major events like the Super Bowl and Oscars has been booked, demand is softer for random days in between these events, particularly for top-view and takeover ads, which require upfront payment to secure future spots.

TikTok does appear to still be filling its spring and early summer inventory, with some brands reserving as late as July, this source said.

“Some brands have asked for explicit language [from TikTok] that says, ‘if the app does not exist in the United States, we get a refund and we’ll get it at this time’” the executive said. “And that hasn’t come yet.”

TikTok did not respond to a media request.

Contingency plans and how agencies will redirect budgets

The first agency, which established its contingency plan in November last year and plans to implement it by the end of January, is advising brands to reinvest 80% of their TikTok ad budget, spanning performance, ecommerce, and brand marketing, to other channels.

For commerce-focused brands, this reserved budget may shift to platforms like Amazon and Pinterest Shopping. Full-funnel marketing dollars are likely to flow to OTT streaming platforms like Hulu and ESPN under Disney’s portfolio, while performance ad dollars will shift toward Instagram Reels.

Already, 5% of the agency’s clients have begun redirecting budgets away from TikTok since last year.

At DigiShopGirl, the contingency plan involves reallocating 90% of TikTok’s performance ad dollars to Reels, YouTube Shorts, and, to a lesser extent, Snapchat, particularly for brands targeting U.S.-based consumers.