Meta and YouTube would gain billions in revenue if ByteDance-owned TikTok is banned in the United States on Sunday, ad company executives said, as rival tech platforms prepare for a potential battle for users and sales.

TikTok has warned that it will be "shut down" from its 170 million U.S. users starting Jan. 19, the day before Donald Trump takes office, under a new law that forces its Chinese parent company to JieDong divests the platform by this date or faces nationwide sanctions. prohibit.

A potential ban has rivals including Meta, YouTube, Snap and Elon Musk's X poised to attack TikTok's Gen Z users and the money advertisers spend to reach them as they Hoping to capture market share in an increasingly competitive industry.

WPP-owned media buying group GroupM said Meta and YouTube would be "clear beneficiaries" in the US if the ban went into effect due to "the similarity of their products" and their ability to handle incremental revenue from $15 billion to $20 billion.

Sir Martin Sorrell, founder of digital media company S4 Capital, said TikTok's advertising revenue will be distributed among Facebook, Instagram, Snap, X and YouTube, totaling about $10 billion, while global digital advertising spending totals about $700 billion.

The viral short-form video app has become a key part of many brands' marketing strategies over the past five years as it gained popularity during the pandemic among Gen Z users, who are less likely to engage with traditional advertising such as television. This has helped TikTok reach a record annual revenue of $16 billion in the United States in 2023, people familiar with the matter said.

According to this legal provision, Apple and Google App Stores will no longer be able to provide TikTok to US users, which means that users will not be able to download the app. It also stipulates that U.S. companies will be prohibited from "providing Internet hosting services" to the video app.

TikTok is challenging the law and hopes the Supreme Court will strike it down this week. Meanwhile, officials in Beijing have been discussing selling the app’s U.S. operations using Musk as a broker, according to two people familiar with the matter.

President-elect Trump, meanwhile, pledged to "rescue" the app when he takes office in the White House a day later, without providing details.

Analysts say any adjustments could cause confusion for marketers, at least in the short term. Some advertisers prepared termination clauses in their contracts with TikTok as early as last year to avoid any financial commitment in the event of a ban.

“Nobody wants to change processes or workflows unless absolutely necessary, but when this all happens at the same time, everyone will have to,” said Brian Wieser, CEO of advertising consultancy Madison and Wall. If you don’t look for new places to spend your money, you’ll get cluttered.”

He added: "This will cause prices to spike due to the lack of certainty and whether your campaign will be filled."

Rival tech platforms have been preparing to seize the opportunity to capture TikTok's young audience and top creators, as well as its advertising revenue, by rolling out new features that bring them closer to the video app's format.

For companies like Meta, which is doubling down on its push into AI, more users or engagement will provide additional sought-after data for training its AI models.

Snap said it has been planning for this possibility for a year across multiple teams. In October, it rolled out a redesign that made the app more focused on short-form videos like TikTok. In December, Meta launched Trial Reels, which allows users to share their Reels videos primarily with people who don't follow them, in a format similar to TikTok.

Analysts at BNP Paribas Exane last week said Meta said in one-on-one conversations that the company was making capital expenditures to prepare its infrastructure for the influx of traffic that would come from any TikTok ban.

BNP Paribas analyst Stefan Slowinski said this could include ensuring the company has "data center and semiconductor capacity."

Meta did not respond to a request for comment.

Some marketers said they interpreted Meta CEO Mark Zuckerberg's move last week to roll back fact-checking and loosen moderation policies as an attempt to divert Trump's attention from saving TikTok.

Intelligence group eMarketer estimates that 22.4% of TikTok's U.S. advertising revenue will go to Meta's Instagram, 17.1% to Facebook, and Google's YouTube will get 10.7% of that.

Analysts at Morgan Stanley estimate that every 10% of YouTube's audience time captured using TikTok's "short clips" feature could bring it up to $750 million in revenue growth.

YouTube declined to comment.

Analysts say Snap has the biggest upside opportunity among other platforms because of its smaller size and similar user base to TikTok.

Chris Best, chief executive of newsletter platform Substack, said there would be a "huge shift" that would benefit his company if the app was banned. Substack is looking to incentivize TikTok users to join Substack's best original videos with a $25,000 "TikTok Liberation Prize" award, as well as a new and improved video publishing service.

"We think this is a huge opportunity," Best said, adding that "a lot of people are now thinking about which platform to use" regardless of whether they decide to ban.

One unexpected beneficiary so far is Chinese social media startup Xiaohongshu, also known as RedNote. This week, the app topped U.S. iPhone download charts as TikTok users seeking alternatives fled the country to protest U.S. government laws. Much of its content is in Mandarin, and the app has no translation feature to help new U.S. users understand posts.

Some in the ad industry question whether rivals will be able to retain TikTok's business and appeal to its Gen Z user base.

"Meta and YouTube are facing a stress test they may not be ready for. Reels lacks the sophistication of TikTok's recommendation engine, which is basically algorithmic rocket fuel, while YouTube Shorts has yet to fully crack the creator monetization problem," writes Uber and said James Kirkham, founder of Iconic, a digital agency that advises brands such as EA Sports.

"Building infrastructure is one thing, but replicating TikTok's cultural appeal is another entirely," he added.

Additional reporting by Stephen Morris in San Francisco. Data Visualization, by Clara Murray