The US government – which has taken a number of measures to restrict or ban TikTok in the US in recent weeks – needs to understand some fundamentals about the information economy, argues UM Worldwide‘s Joshua Lowcock.
“Senator, we run ads.”
This response by Mark Zuckerberg to a question from Senator Hatch in 2018 is fundamental to how the US Government needs to start in understanding TikTok.
TikTok, like its contemporaries – including Google, Facebook, Snap and others – makes money from advertising. There is also no question that this advertising-led business model has led to entrepreneurialism, economic growth and consumer benefit from the introduction of new ad-funded products, services and content. But to say platforms make money from ‘advertising’ is an oversimplification – these companies make money from data-driven advertising, linked to data gathered about their users while they use their platforms.
Read the full op-ed piece in The Drum.