Maya Robertson
TikTok’s economic impact report, unveiled on Thursday, highlights the popular short-form video app’s significant contribution to the U.S. economy, asserting that it generated a staggering $14.7 billion for small- to midsize businesses (SMBs) last year, with an additional $24.2 billion in total economic activity fueled by small businesses’ utilization of the platform.
According to the report, over 7 million U.S. businesses rely on TikTok, with small business activity on the platform supporting 224,000 jobs in 2023. Notably, 98,000 of these jobs were directly within SMBs operating on TikTok, with states such as California, Texas, Florida, New York, and Illinois experiencing the most significant impacts.
The study, conducted by Oxford Economics, meticulously measured SMB activity on TikTok, including ad spend and return on investment (ROI). Leveraging census data and other metrics, the report arrived at its conclusions, emphasizing TikTok’s substantial role in bolstering the U.S. economy.
The timing of the report’s release is strategic, coming at a critical juncture as lawmakers debate the fate of TikTok. In March, a bill proposing a TikTok ban passed in the House of Representatives, gaining bipartisan support with a 362-65 vote. President Biden has indicated his willingness to sign the bill into law if it clears the Senate, raising concerns for TikTok, especially given its tumultuous history with the Trump administration.
The looming threat of a TikTok ban has implications beyond the app itself, potentially reshaping the landscape of social media and short-form video platforms. Competitors like YouTube and emerging startups could capitalize on TikTok’s absence, while TikTok’s economic report serves as a compelling argument for its continued operation.
According to a recent report, TikTok hit $16 billion in sales in the US. Per a recent survey, Meta stands to gain between 22% to 27% of TikTok’s projected $6.61 billion in US ad revenues. Meanwhile, YouTube could potentially see a windfall of up to $1.54 billion.
Highlighting the $5.3 billion in tax revenue supported by small business activity on TikTok last year, the report positions TikTok as a vital marketing and advertising platform. Case studies presented by the company underscore how TikTok has facilitated sales growth, increased website traffic, and diversified revenue streams for businesses.
Despite TikTok’s proactive measures, the fate of the ban rests in the hands of the Senate, presenting a formidable hurdle, particularly with the Republican party’s leader reversing his stance. As TikTok continues its advocacy efforts, the outcome remains uncertain, underscoring the pivotal role of technology and social media in contemporary policymaking.
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