Microsoft-TikTok deal could resurrect tech giant's digital advertising efforts

by Jed Meyer, Managing Director, North America
Tuesday, August 4, 2020

President Donald Trump confirmed Monday that he has given Microsoft the go-ahead to try to acquire popular social media app TikTok. Just days ago, the president was talking about an outright ban of the app that is so popular with young people due to security concerns.

If Microsoft's deal to purchase TikTok goes through, it would give the tech company quick access to a wide pool Gen Z user, a demographic that marketers anxiously try to appeal to, and bolster its position as a digital advertising company once again.

"Over the last several years, Microsoft has de-emphasized its advertising business in order to focus on the Azure/cloud business opportunity," said Jed Meyer, managing director of North America for media and marketing consultancy Ebiquity.

The potential acquisition of TikTok shows a renewed interest by Microsoft in the advertising business. This move would introduce Microsoft as a major player in the landscape, potentially threatening Facebook, Google, and Amazon down the line as its ad business grows.

If Microsoft is able to use this opportunity to capitalize on its foothold in the youth market, much of it could come from digital advertising. And, at a time where attention is split between so many different platforms and devices, having something that Gen Z wants to use can be valuable for many marketers trying to build brand awareness and loyalty.

TikTok shows strong potential as an ad platform, Ebiquity's Meyer said.

It needs to continue investing in its advertising offering and think ahead to avoid the brand safety blunders that we've seen on YouTube and Facebook. That said, the platform likely will continue to see more and more brands interested in investing given its critical mass of younger consumers, coupled with a new, fresh, and different offering.

Read the full article in Cheddar, here.

First featured 03/08/2020.