Marketers question TikTok ban refunds ahead of Supreme Court debate
TikTok’s ultimatum — shutdown in the U.S. or get a lifeline from the Supreme Court — is the latest plot twist in a whirlwind month that’s left markets in a tailspin. With the app’s future hanging by a thread, marketers are navigating murky waters, scrambling to make sense of what it all means for their plans.
Late last month, Chris (not his real name) fired off an email to his TikTok rep. As the go-to guy for managing client ad spend at his agency, he needed clarity ahead of a critical moment for the app, the looming federal deadline that could force ByteDance to sell TikTok — or face a U.S. ban. The response he got wasn’t just telling, it was practically a confession. TikTok reps were offering make-goods to advertisers locking in ad inventory through the end of the second quarter.
For the first time since whispers of a ban began six years ago, TikTok seemed to be bracing for the possibility that its American swan song might not be far off.
“In an email, our TikTok rep said if you reserve inventory and the app is banned, or for whatever reason the inventory cannot be delivered as promised, you will be refunded,” said the U.S. agency executive.
It all but confirmed to Chris that those contingency plans he’d helped his clients put together would be needed despite TikTok’s insistence on the contrary. This means those contingency plans were no longer just a precaution — they were about to become a necessity.
Later today, the Supreme Court will hear arguments over a law that bans the app in the U.S. unless its owner, ByteDance, divests. Signed by President Biden in April 2024 and upheld by a Washington, D.C., federal court in December, the law is set to take effect on Jan. 19.
The court’s decision will determine the fate of a cultural juggernaut, powered by a sophisticated algorithm that drives an endless stream of personalized short videos to 170 million U.S. users.
For many, especially younger Americans, TikTok is more than an app — it’s their go-to source for entertainment, connection and information.
Its absence wouldn’t just leave a void in their digital lives — it would send marketers scrambling to fill the gap to find alternative ways to reach them.
Chris, for one, has little faith that TikTok’s make-good assurances would smooth that transition. To him, they feel less like guarantees and more like acknowledgements of the inevitable. After all, the promises weren’t cast-iron since they weren’t written into contracts. And that uncertainty is already spooking some brands, who are wary of pouring ad dollars into an app that might not even be permitted in the U.S. soon.
“They’re [TikTok] writing it [make-goods] in emails, but it’s not written into the contracts,” the U.S. exec added. “This has definitely been a hiccup for some brands, who were quite concerned about spending $300,000, for example, up front without the assurance of the refund detail being in the contract. It became a discussion of, ‘Do you want to take the risk of not doing it?’”
The frustration runs deeper than vague promises. Some marketers feel like TikTok is sidestepping the hard questions — like where production and creator credits will land if campaigns are derailed. And rather than issuing refunds outright, they say that TikTok is pushing them to redirect funds tied to programs like Pulse, production deals and creator partnerships to its non-U.S. platforms.
Where do the production credits go? Where do the creator credits go? And you know what their solution is? Spend it in markets where we’re still active. They don’t want to give the money back,” one ad exec explained on condition of anonymity. “The frustrating part for me is we’ve been asking them for solutions for so long. Get your head out of your derriere. A bill doesn’t move this fast without real consequences.”
These comments underscore how much the relationship between TikTok and marketers has shifted in just a month. Just last fall, TikTok was aggressively courting upfront deals for 2025, pitching them as proof of its indispensability to the U.S. economy. Now, those pitches feel more subdued. Instead of boldly selling the future, TikTok execs are playing defense — focusing less on maximizing revenue and more on preserving goodwill as the clock ticks down.
