TikTok's Sydney-based Australia-NZ office has been in touch with local clients over the app's looming ban.
The Chinese-owned company did not immediately respond to questions. But Jane Ormsby, principal at ScollMedia - an agency that frequently buys ads on the platform - says TikTok has told clients it will suethe Trump administration.
TikTok's lawsuit could be filed as soon as tomorrow.
The lawsuit is expected to be filed in the US District Court for the Southern District of California, where TikTok has its American headquarters - TikTok's headquarters in China but the company is registered in the Cayman Islands, its servers are in Singapore and Virginia and its CEO is an American - Disney alumnus Kevin Mayer.
TikTok will challenge the constitutionality of the ban and its underlying claims that the video-sharing service represents a national security threat to the US.
Ormsby says although TikTok is ultimately confident of staying online, advertisers have also been told they'll get credits if a ban does go ahead.
TikTok ANZ presentations for advertisers indicate the recent controversy hasn't undermined the short-video app's popularity.
In fact, it claims to have grown from having 850,000 monthly active users in NZ last quarter to 1.1 million last month (worldwide, it claims close to 1 billion, underpinning its private equity valuation of US$50 billion for its most recent raise). For context, it still has less than a third of Facebook or YouTube's base, but it's ahead of the likes of Twitter, Pinterest, Snapchat or LinkedIn.
One thing hasn't changed though, TikTok continues to skew toward young women and girls. Last quarter, it said 78 per cent of its users were between 13 and 17, and 66 per cent were female. A mere 5 per cent were 25 or older.
In terms of its TikTok business, Scroll Media works predominantly with health and beauty brands.
The cost isn't directly comparable to rivals like Facebook and Twitter because TikTok has an emphasis on daily campaigns, Ormsby says.
A branded image or video takeover of the TikTok NZ splash screen costs $8000 a day for a guaranteed 1.2m impressions. A video ad at the top of the splash screen NZ users see when they open TikTok costs $10,700 a day for 950,000 guaranteed impressions and a "first-in-feed" video ad cost $4100 a day for 440,000 guaranteed impressions.
Last Thursday, US President Trump signed an executive order saying that after 45 days, the US would prohibit "any transaction by any person" with TikTok owner Bytedance or Tencent - parent of Chinese social media app WeChat - citing allegations the pair share information with China's government.
TikTok's users in New Zealand are overwhelmingly young and female. Source / TikTok
If the suit goes ahead, Exhibit A could be a recent CIA report that found no evidence Chinese intelligence authorities could intercept TikTok data or use the app to bore into smartphones.
TikTok has said it's open to selling its US, Canada, Australia and New Zealand operations as a solution, and Microsoft and Twitter have emerged as potential buyers.
However, if filed, a lawsuit could delay a decision on a TikTok ban until after the November 3 presidential election which, on current polls, would evict Trump from the White House.
If Trump does stay in power, however, it's possible his administration will encourage allies to follow its ban - as it did with Huawei.
But it's also possible the President's efforts could just peter out. An executive order Trump signed on May 28 to kneecap Facebook and Twitter has now seen its 30 and 60-day deadlines for federal agency action against social media come and go, with no action.
In fact, Facebook and Twitter have recently become more assertive in censoring the President when he violates their rules.
Meanwhile, the fast-rising TikTok also faces increasingly aggressive commercial threats.
Facebook-owned Instagram has just launched the very TikTok-like "Reels".
Facebook has reportedly been approaching TikTok super users - those with millions of followers - and offering them cash to move to Reels.
Meanwhile, TikTok has countered by establishing a US$200m "creators fund" to reward users who generate more than 10,000 views of their videos per month. It says it will expand that programme - currently in the US onlyh - to US$1 billion within a year, with the same amount spent once the initiative launches globally.
The message is clear: TikTok won't go down without a fight - and a very expensive fight, at that.
