April 8, 2024
Welcome to The L@B Report
Welcome to this month’s issue of The L@B Report from GSG, bringing you news and insights from the intersection of digital media and public affairs. In this issue, we explore Congressional activity to ban TikTok and the IPOs of Truth Social and Reddit.
In the News
House passes legislation that could lead to a TikTok ban
But efforts to ban or force the sale of TikTok in the Senate remain unclear
In March, the House passed bipartisan legislation that would force China-based ByteDance to sell TikTok within 165 days of becoming law or face a ban in the United States. President Biden has said he would sign the bill, but it first needs to pass through the Senate where its future appears uncertain.
Takeaway
The legislation moved quickly – and caught many by surprise.
Almost exactly one month before the House ban, POLITICO ran a story detailing TikTok’s year-long efforts to “spend money” and “make the right friends,” elevating the company from one of Washington’s biggest villains to “back in the fold.” President Biden’s re-election campaign even launched an official TikTok presence on Super Bowl Sunday.
When the House Energy and Commerce Committee began to move the legislation, TikTok quickly activated its user base to lobby Congress, flooding offices with calls. The activation angered Members of Congress and likely backfired as the bill passed out of committee 50-0.
While grassroots activations have always been a mainstay of public affairs and lobbying campaigns, TikTok shows that launching them at such a large scale that they effectively shut down congressional offices can be counterproductive. It is worth keeping an eye on the TikTok legislation not only because it may ban a platform millions of Americans use daily, but also for more insights into how grassroots and influencer lobbying are received by lawmakers.
Donald Trump’s Truth Social Goes Public
Trump gains billions in wealth as stock surges on first day of trading
Donald Trump’s Truth Social, which is essentially a Twitter-clone for the right, went public at the end of March, and the stock soared to $77.67 per share – leading the value of Trump’s shares to rise to $6 billion.
But that sky-high valuation came crashing down on April 1 when new SEC filings revealed that Trump’s social media company lost over $58 million on just $4.1 million in revenue during 2023 and faces real challenges to stay in business. Since the first day of trading, Trump’s shares have declined by over $1 billion in value.
Takeaway
Truth Social has fewer users and less income than any social network that has gone public. Trump’s platform only has 5 million monthly active users as of its IPO, whereas Facebook had 845 million in 2012 and Twitter had 215 million in 2013. For income context, Twitter generated around $665 million in revenue for the year leading into its IPO and had $5.2 billion in the final year before Elon Musk bought it.
With Truth Social’s financials now public, its stock is being compared to meme stocks like GameStop and AMC that soared during the pandemic-era and have since crashed.
While President Biden’s re-election campaign has a presence on Truth Social (almost certainly as a tactic to get under Trump’s skin), Truth Social makes about as much sense for public affairs campaigns as it does for investors.
Reddit Goes Public Too
The world’s largest online forum issues its IPO
Reddit also went public in March and ended its first day of trading with its shares soaring 48% to $65 but like Truth Social, it later nosedived and shares sunk to $49 – just $2 above its opening price. With 73.1 million users, over 173 million daily site visits, and $804 million in annual revenue, Reddit is the largest social media IPO since Pinterest went public five years ago.
Takeaway
While Reddit has not turned an annual profit since launching in 2005 and relies heavily on online advertising for the vast majority of its revenue, Reddit is touting AI as a potential area for revenue growth. In February, Reuters reported that Reddit struck a deal with Google worth $60 million per year to make Reddit’s content available for training Google’s artificial intelligence models.
While it remains to be seen how successful Reddit will be as a public company, the platform has long been a favorite of savvy marketers, grassroots organizers, and communicators, such as former President Barack Obama, who did a Reddit “AMA” (“ask me anything”) back in 2012.
More From GSG
This Wednesday, GSG is unveiling new data that looks beyond the buzz and uncovers public priorities around AI. Our findings provide critical insights into what employers and employees need to think about as they navigate this quickly evolving technology.
Keep a look out for the full report and sign up for our webinar to hear directly from the experts.
This issue of The L@B Report was put together by Ryan Alexander.
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