TikTok slashes ad sales target by €2bn after tech downturn

Like most social media platforms, TikTok makes most of its revenue from advertising. Picture: AP Photo/Kiichiro Sato

TikTok owner ByteDance has slashed about $2bn (€2bn) off its target for 2022 ad revenue, underscoring the fallout of a global downturn that’s hammered fellow internet giants from Google to Meta.

TikTok CEO Shou Zi Chew told a handful of employees during a recent meeting that the Chinese-owned app has slashed its ad forecast for 2022 to $10bn from at least $12bn previously, according to a person briefed on the matter.

The revision did not include smaller business segments such as e-commerce, the person added, asking to not be identified discussing private information.

The downsized ambition reflects a pullback in marketing spending worldwide as companies and consumers tighten budgets and prepare to ride out a potential recession.

Many of the world’s largest firms including Google owner Alphabet, Amazon, Facebook owner Meta and Microsoft have reported results that largely fell short of projections, shaving hundreds of millions to billions of dollars from their market valuations.

ByteDance grew into the world’s most valuable startup on the success of apps like TikTok and its Chinese counterpart Douyin, but it is been squeezed between Beijing’s crackdown on internet firms at home and Washington’s suspicions of the services.

Concerns around how TikTok stores US user data and manages information flows between employees in China and elsewhere  resurfaced among American lawmakers and politicians as they geared up for the mid-term elections.

Like most social media platforms, TikTok makes most of its revenue from advertising.

Parent ByteDance has postponed plans for an initial public offering as investors flee riskier assets.

• Bloomberg