Agencies Are Spending More on TikTok Ads This Year Despite US Ban Uncertainty

Looming uncertainty over a potential U.S. TikTok ban is not putting off advertisers from committing ad spend to the platform. In fact, agencies are pledging a year-over-year increase in ad dollars in 2025.

One agency executive, speaking anonymously to protect industry relations, plans to increase the agency’s TikTok spend by 20%–30% this year. DigiShopGirl Media will increase spend by between 15%–18% over the year, according to CEO Katya Constantine. At VML, clients are boosting their yearly influencer budgets on TikTok by 30-50%. Some brands are committing for the entire year, while others are focusing on the first half of the year or maintaining a steady stream of ad-hoc campaigns throughout, according to Mae Karwowski, CEO of Obviously, VML’s influencer marketing agency.

U.S. ad spend on TikTok is projected to surge 57% YoY in the first two months of 2025, according to ad data firm Guideline, based on forward booking data from agency partners for upcoming campaigns. And TikTok has been growing: Since 2020, TikTok has posted an annual compound growth rate (CAGR) of 118%, rising from 2% to 20% of total U.S. social ad spend, per Guideline.

“TikTok is still pushing agencies and brands to commit to increased YoY spend through up-front deals, and they are still selling up-front media placements well into 2025,” the first agency executive said. “TikTok has confirmed in writing, although not in contracts, that they will honor refunds for reserved inventory if the app is shut down.”

Despite regulatory uncertainty, TikTok’s ad revenue trajectory highlights the platform’s resilience. Advertisers are making commitments for 2025, drawn by TikTok’s ability to drive engagement and sales, especially among younger audiences.

“A lot of it is net new created ad budgets towards TikTok because it’s created a pocket of success within their business,” the first agency executive said.

The looming U.S. TikTok ban, set for January 19, mandates app stores like Google and Apple to remove TikTok. However, the bill does not specify a timeline for fully shutting down the app itself, creating a “fragile couple of weeks for agencies and advertisers,” the executive notes. Without app store access, the app will not receive updates and will eventually become so buggy to be unusable.

As brands navigate uncertainty, many are also hedging their bets with contingency plans. Some aren’t fully convinced by TikTok’s lack of refund commitments in contracts, which adds to the hesitancy to commit to upfront ad inventory.

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.