Chinese-owned TikTok was under fire from the U.S. government just a few weeks ago; its CEO was hauled in front of Congress, and the company still faces a possible U.S. ban if some politicians get their way. But all of that still isn’t enough to deter American companies from spending more on TikTok advertising last month.
Advertising on the social media platform increased by 11% in March, according to data analytics company Sensor Tower, the Financial Times reported Thursday. Some of the biggest spenders were Pepsi, Amazon, Apple, and DoorDash.
“TikTok is increasingly an essential part of U.S. brand advertising strategy and spending. With the rise of influencer marketing and short-form video, brands are seeing results from partnering with the TikTok platform,” Seth Kean, CEO of ROI Influencer, a New York–based social media analytics company, told Fortune. “Marketers care about large audiences, targeted audiences, engagement, and sales, and view TikTok as a valuable partner for each goal.”
The continued ad spending reflects how TikTok has become the cornerstone of digital advertising for companies looking to reach the younger population, who are big users of the app. During the Super Bowl in February, several companies, including insurance provider State Farm and delivery giant FedEx, opted to spend on TikTok ads instead of traditional TV ads.
“Brands are committing their budgets in significant figures because TikTok has proven time and time again that it can create trends for brands, but crucially it has also shown great success in translating cultural relevance and moments of brand fame through to commerce,” Melissa Chapman, CEO of U.K.-based social media agency Jungle Creations, told Fortune last month. “No other platform does this as successfully.”
TikTok’s ad revenue in 2022 hit $10 billion, up from $4 billion in 2021. It had cut its initial 2022 forecast of $12 billion amid the economic uncertainty that had hit the ad businesses of competitors including Meta and Google. Investment bank TD Cowen expects TikTok’s ad revenue to hit $36 billion by 2027—assuming it doesn’t get banned, that is.
The growing prominence of the short-video platform has been worrying lawmakers for years. TikTok has found itself at the center of the U.S.-China tussles as Washington fears the platform, a wholly owned subsidiary of Chinese tech company ByteDance, will be used by Beijing to spy on U.S. users. The lawmakers have been pushing for the app to be spun off from its parent company so it can be free of any connections to China or to be banned entirely.
Late last month, TikTok CEO Shou Zi Chew made his case to Congress about why the app shouldn’t be banned. He was grilled for six hours by bipartisan Congress members (some of whom lacked knowledge or experience of the platform) on the security risks of the app, its effects on the mental health of users, and its content moderation policies.
In response, TikTok has been trying to assure the U.S. government that its $1.5 billion proposal to store user data in servers owned by software company Oracle will keep the data secure. The company has also been keeping a distance from its Chinese roots, saying that 60% of ByteDance is owned by American investor Carlyle Group.
“Let me state this unequivocally: ByteDance is not an agent of China or any other country,” Chew said during the congressional hearing.
China, for its part, has fought back, saying it would “resolutely oppose” the U.S. if it forces TikTok’s sale from ByteDance.
Almost half of the U.S. states have already moved to ban the app on state-owned gadgets, including New Jersey, North Carolina, and Ohio. And the U.S. isn’t alone in its intent to ban TikTok at the national level—the U.K., Australia, Canada, and others have banned the app from government-issued devices, while India has banned it for the entire country.
TikTok did not immediately return Fortune’s request for comment.