TikTok’s latest ad targeting regulations reflect the increasing sales pressure on the app

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This has certainly raised some eyebrows among social media and privacy analysts.

Today, TikTok has started showing users in Europe, UK and Switzerland new in-app notifications notify them of changes to their data collection policies.

As you can see in these examples shared by social media experts Matt NavarreTikTok is changing the way it uses people’s data in its ad targeting systems.

More accurate, TikTok explains that:

If you’re 18 or older and located in the EEA, UK or Switzerland, TikTok is making a legal change to how your activity on TikTok is used to personalize your ads. Current data protection laws require companies like TikTok to have a legal basis for processing your data. In the past, TikTok has asked for your “consent” to use your activity on and off TikTok to provide you with personalized advertising. Beginning July 13, 2022, TikTok will rely on its “legitimate interests” as its legal basis to use activity on TikTok to personalize ads from users 18 years of age or older.”

Note the quotation marks around “agreement”. Seems like a red flag in itself.

Essentially, TikTok is saying that if you have not consented to personalized ads in the past, which TikTok is required to allow under EU data protection rules, you will soon receive some form of personalized ads anyway. based on your in-app activity. TikTok appears to be trying to employ a technique to maximize the performance of its ads, even for users who have opted out of personalized targeting.

Which isn’t surprising, I guess, but it points to the increasing pressure within TikTok to make real money from the app – which could result in users being shown more ads over time.

While Twitter remains in limboand meta is diverting more and more of his resources into his Metaverse pushAt first glance, it looks like TikTok is currently the only platform on a clear uptrend, with increasing usage, more ad dollars, and new programs designed to capitalize on the rise of e-commerce and the creator economy.

TikTok is the clear winner in the social media space, at least for now, right?

Well, maybe not as much as you think.

In recent months, TikTok owners ByteDance faced a number of new challengesmost notably a change in data and algorithm usage regulations in China.

acc The South China Morning Post:

Like many Chinese tech companies, ByteDance’s prospects for earnings growth in the domestic market remain clouded by tightening regulations. The central government has become more intrusive in regulating short video content. A new Law on the Use of Recommendation Algorithms came into force in March.

CCP regulators, increasingly frustrated with their inability to control the content of these apps, have sought to exert more scrutiny, which has spread to all of ByteDance’s major revenue streams.

This increased official control has already taken place wiped $100 billion from ByteDance’s valuewhich forces the company to think clearance salesStaff cuts and more while it’s time to get the ship in order.

That pressure has extended to TikTok, which alongside these new data usage changes has also sought to enforce more China-centric policies around employee expectations and the content it allows on the app.

ByteDance manager Joshua Ma, who works with TikToks UK eCommerce teamrecently had to resign after trying to impose harsh working conditions on employees to speed up its expansion.

As reported by The Financial Times:

“The launch of TikTok’s live stream shopping feature in the UK triggered a staff exodus from the London e-commerce team. Some employees complained about an aggressive corporate culture with unrealistic goals and expectations that go against UK labor practices. Employees said they are expected to frequently work more than 12 hours a day, starting early to take calls with China and finishing late as evening live streams are more successful and overtime is celebrated in internal communications. Some members of the e-commerce team were removed from customer accounts after their annual leave.”

Ma said that too he “doesn’t believe” in maternity leavewhich The Financial Times also reported on and which, by the way, led to another problem on the content page, allegedly with TikTok consider censoring keywords such as “Financial Times”, “Joshua Ma”, “maternity” and “toxic” on the platform to soften the impact of the Financial Times report.

TikTok says this ban was never implemented, but it underscores a fundamental concern within TikTok’s approach, as a first instinct of at least some executives has been to silence criticism and dissent.

And you have to assume that this is at least partly due to the pressure being exerted on the company’s Beijing headquarters.

How this new data usage policy fares is unclear, but TikTok still only contributes around a third Total sales of ByteDancedespite its global reach, you can imagine that ByteDance will be increasingly interested in squeezing more money out of the app sooner rather than later.

What remains a challenge. ByteDance has had major sales success with the Chinese version of TikTok (dubbed “Douyin”) by implementing e-commerce integrations, driven primarily by the launch of live stream commerce in China.

TikTok trading

According to ByteDance over 20 million unique content creators and live streaming hosts are now generating revenue from their apps, with totally live Shopping sales in the Chinese market stopped reach $423 billion this year. That’s more than that Total GDP of Ireland.

But the CCP’s crackdown is also affecting this element, with even greater impetus Catch influencers who have not met their tax burdenwhich has already influenced many local streaming stars.

Add to that the fact that more and more brands are reassessing their relationships with streamers (due to influencers demanding increasingly attractive offers), and signs suggest a reckoning is coming for the booming sector, which will once again impact ByteDance.

It’s not great either because it’s the same as TikTok. Despite its popularity, TikTok is still developing a fairer business process, especially in terms of making sure its top stars get paid. TikTok is expected to bring that $11.6 billion in ad revenue this yearbut there’s still no effective way to get this across to creators, which might see many of them eventually migrating to YouTube and Instagram.

As mentioned, TikTok is working on it, but a major focus, as in China, is live stream trading, which it hopes will become a golden goose in western regions as well. But that’s not the case yet, and many Chinese trends haven’t translated to other markets in the past — and it could well be that TikTok creators just want to get paid to make videos, which they can’t do on TikTok , but they can through YouTube’s affiliate program.

Could that cause more creators to lose interest in the platform and take their audience with them? That ultimately took Vine’s life, and it remains a real possibility for TikTok as well. That’s why TikTok desperate to get back to Indiawhere it’s still banned while also trying to implement more ad options and tools to maximize its earnings while it can.

Essentially, if you take a broader look, you can see how the increasing pressure on ByteDance is also weighing on TikTok and will likely force it to push various revenue tools, including more ads, which poses a major risk to its growth potential.

That’s not to say that TikTok is still on the way out. Far from it, but there are signs and concerns that you may not see when looking at growth numbers in isolation.

Perhaps there are ways around this — perhaps TikTok could be sold and operate as a separate entity, or perhaps its trading options will be a hit and open up greater business opportunities for the app.

In any case, you can expect more changes in the app as the pressure on the parent company increases.

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