The news: TikTok’s contentious US House hearing last week is prompting ByteDance and industry rivals to make moves in preparation for the growing possibility of an outright US ban.
Let’s try that again: ByteDance’s push to bring Lemon8 to prominence could be a backup plan in case TikTok gets banned in the US, but it doesn’t solve the core problem upsetting regulators—ByteDance’s ties to China.
Competitors swoop in: A ban may not materialize, but competitors are still using the buzz to attract advertiser attention and further their own strategies.
Our take: Even if TikTok doesn’t get banned, the mere possibility is causing shifts in advertising. Smaller advertisers may be nervous about putting all their eggs in one basket and could diversify spending across platforms like Reels and YouTube Shorts.