TikTok's Potential Entanglement With China's Government Has Ad Agencies Worried

July 16, 2020
TikTok has been booming in popularity, and brands are eager to get in front of its engaged audiences. 
"In the past two months, there hasn't been a platform we've talked about more than TikTok," said Scott Harkey, founder and managing partner of advertising agency OH Partners. "It is clearly, I think, the most talked-about ad platform in the business." 
However, some advertising agencies and brands are concerned its terms and conditions will allow it to share personal information with its Chinese parent company ByteDance.
Several agencies, who asked not to be named because of non-disclosure agreements and ongoing negotiations, said they are worried about data being passed along to ByteDance, and then potentially the Chinese government.
One agency, in particular, has flagged language in the "TikTok for Business" terms and conditions that allow personally identifiable information like email addresses or device IDs to be shared with not only the U.S.-based TikTok operations but ByteDance as well. Cheddar has seen some of the language in question and also has noted that any questions regarding policy must be sent to a Bytedance email address, not TikTok.
Other companies, including Microsoft, are not allowed to advertise on the platform because its lawyers are questioning the terms and conditions around the collection of personal data, according to a source with knowledge of the company's operations. Microsoft did not respond to requests for comment.
"Protecting the privacy of our users' data is of the utmost importance to TikTok," a spokesperson for TikTok said in a statement. "Our security team is led out of the U.S. by our Chief Information Security Officer, Roland Cloutier, who has decades of industry and U.S. law enforcement experience. TikTok collects much less U.S. user information than many of the companies in our space and stores it in the U.S. and Singapore. We have not, and would not, give it to the Chinese government."
TikTok has never been asked to give U.S. or European Union data to the Chinese government, the spokesperson added. In addition, TikTok data is stored in U.S. servers located in Northern Virginia. Backups are kept in Singapore. All TikTok data collection practices are compliant with the legal jurisdictions they operate in, including Europe's General Data Protection Regulation (GDPR).
Brands are allowed to use personal information collected from their own sites, like email logins, full names, and phone numbers, to target advertising. People give permission for their data to be used this way when they sign up for online accounts, especially through rewards programs. Companies can legally upload this data onto social media platforms, and use it to find specific people who have shown interest in their brands. They then show these people relevant ads.

Third-parties are also allowed to provide personal information, like credit card activity, to help companies discover customers online. However, this data is aggregated and anonymized so it is difficult to parse out individuals. But it does help brands find certain demographics that might be interested in their products, like women in their 30s who own homes. 
The TikTok terms are looser than its competitors on how it, and who else, gets to use that data, some agency sources noted. Theoretically, this information could be used to track people, for example, by finding out more info on people by combining email addresses and combing through their social media profiles and photos combining device IDs and location data.
Though the coronavirus has slowed down ad spending, digital advertising is still expected to grow 1.7 percent this year according to eMarketer. TikTok is one place companies are willing to shift some advertising budget. The app has reached 800 million monthly active users since it was launched in the U.S. in 2018 to become the sixth-largest social media platform, and 69 percent of users are between the ages of 13 to 24. The company presented its first pitch to advertisers at the Digital Content New Fronts this year.
"We're definitely talking to a lot of clients on what the opportunities are there," said Rob Pearsall, senior vice president of social at media agency Havas.
With a lot of brands boycotting Facebook due to concerns over its content moderation policy, many are using this opportunity to rethink how to allocate budgets and are considering an "exploratory" shift to TikTok next year, he added.
"A lot are waiting to see how everything shakes out with Facebook throughout the course of the month here before we can say if there's going to be an actual shift for the duration of this year," Pearsall said. "[But] TikTok is setting itself for a larger consideration for 2021."
Still, concerns on who has access to user data persist. The advertising agencies are following the Trump administration's admission that it is looking at banning TikTok from the U.S. over privacy concerns.
Amazon sent out an email to some employees asking them to remove the app from their devices, but a spokesperson later clarified the communication was sent in error.
But Wells Fargo told employees to remove TikTok from their corporate phones, as first reported by The Information.
"We have identified a small number of Wells Fargo employees with corporate-owned devices who had installed the TikTok application on their device," Wells Fargo told Cheddar in a statement. "Due to concerns about TikTok's privacy and security controls and practices, and because corporate-owned devices should be used for company business only, we have directed those employees to remove the app from their devices."
close
We use cookies and similar technologies on this site to collect identifiers, such as IP address, and cookie and device IDs as described in our Privacy Policy.