What you need to know:

• TikTok looks set to face a tougher road to revenue growth as it moves from “new and shiny” to harder comparisons with Google and Meta on ROI benchmarks.
• That creates increased pressure to demonstrate effectiveness – with the platform making changes that have cut potential ad reach in a trade off for lower cost of acquisition and conversion while doubling down on engagement and AI-driven targeting.
• Increased pressure and a bloated headcount versus much larger rivals – TikTok’s local operation was 5x Meta’s as of last year – are fuelling industry conjecture that a broader sweep may be in play beyond senior exits with media and partnerships the hardest hit.
• Some agency executive suspect a potential centralisation and consolidation effort as the platform matures.
• TikTok has denied major headcount cuts, but would not comment on the recent departures of GM of global business solutions Brett Armstrong and ANZ head of global business marketing Denny Handlin, nor whether they would be replaced.

The revenue march of TikTok remains at full throttle in Australia and by most accounts remains a priority for many advertisers to experiment and find ways to engage with an algorithmically-charged entertainment channel that boasts engagement rates twice that of Instagram. 

But industry sentiment and rumblings shifted last week as the influencer industry through Aimco staged its annual awards. 

The talk of high-pay, high-pressure roles at TikTok have been common since TikTok’s media exec hiring raids through and post-Covid. Now, a combination of hushed key exits of TikTok Australian management, more local market engagement by execs from TikTok’s Beijing-based parent ByteDance and expectations by some that the platform is set to face a tougher road to revenue growth as it moves from “new and shiny” to harder comparisons with Google and Meta on ROI benchmarks is casting a new set of competitive challenges for a platform that has been running white hot. 

Danny Bass, former Snap ANZ commercial lead, Dentsu Media CEO and GroupM investment director, now Chief Revenue Officer at market mix modelling firm Mutinex, said TikTok's ad growth romp is set for bigger headwinds as the platform moves from advertiser optional and experimental budgets to hard effectiveness comparisons against the platform incumbents in Meta and Google.

“A majority of TikTok’s spend would have come from discretionary budget that clients haven’t already locked away with annual deals or set plans,” he told Mi3. Those discretionary budgets – the 30 to 40 per cent typically left over after annual upfront deals – are usually designated for the latest “shiny new thing”, per Bass, giving “clients the opportunity to try new things”.

Bass said that leaves the short form video app to compete directly with Google and Meta for share of digital ad budget, which meant demonstrating investment on TikTok was just as, if not more, effective – Google and Meta hit the same challenges as newcomers.

“Whether you agree with their methodology or not, Google and Meta are very good at demonstrating to clients how good they are,” Bass said. 

Shakeout?

The spec is that the cuts are more widespread than just the top brass, with media and partnerships the hardest hit.

TikTok vehemently denies that’s the case, pointing to the 500 Australian staff members it cited in response to independent MP Zoe Daniel's questions on notice in August. Even if that figure were out of date, the 112 Australian-based roles listed on the platform’s job site appear to support that narrative.

But the short form video app wouldn’t shed any light on nature of Brett Armstrong nor Denny Handlin’s recent departures, or even Lee Hunter’s exit last May. It refused to "comment on individual staffing", per company policy, nor would it confirm whether any of the exec roles will be replaced.

Advertising boss Brett Armstrong is understood to have been out of the business since before Christmas. He did not respond to Mi3’s approach for comment.

Armstrong, who joined as the platforms general manager of business solutions for ANZ ahead of its 2020 launch, had been left as the default market lead following ANZ general manager Lee Hunter's exit last May.

Head of global business marketing Denny Handlin now understood to be the latest out the door. 

Rumours of broader cuts are persistent, with agency execs observing a recent shift at the senior end of the business, where a growing number of local staffers appear to have been increasingly swapped out for team members from HQ. 

Mixed signals

Those with knowledge of the sentiment within the business suggested churn at the top and heavy pressure to improve commercial performance have contributed to flux within the local operation.

Yet while Mutinex's Bass suggested TikTok is now having to measure up with Meta, media buyers said its share of marketer budgets, for now, is holding up.

TikTok’s 2024 numbers are yet to land. Financials filed with ASIC last year state the platform more than doubled its Australian revenues during the 2023 calendar year to $375 million.

Agency bosses affirmed the trendline has stuck, with one holdco exec telling Mi3 that the only clients that had not grown spend with TikTok year-on-year, according to reporting dashboards, were those that had rolled out of the agency’s roster. At worst, the growth in spend might be slightly less steep than the platform enjoyed in its earlier years in market, they said.

Execs across media agency and social media shops broadly confirmed that view. But some suggested the latest cuts could reflect plans for TikTok to centralise and consolidate its local resources to fit the shape of the business as it nears maturity. 

Meta, for example, manages to operate with around 100 local staffers to TikTok's 500, while posting more than triple the Chinese-owned app's 2023 revenues per ASIC filings – which it states at $1.34 billion.

Effectiveness vs. reach

If Mutinex's Bass is right and TikTok now faces sterner effectiveness tests by marketers, the platform appears to already be taking action, recently striking a partnership with brand tracking firm Tracksuit to prove that even relatively small investments in brand over time boost TikTok conversation and can counter biddable auction inflation.

Even “big performance-focused advertisers” are hitting the same growth ceiling “which is very expensive to bypass by performance [spend]”, TikTok marketing science chief Rory Dolan told an Mi3 podcast in October. “These are businesses that maybe three years ago wouldn't have touched brand [investment] because of the inability to track their short-term ROI. They're now seeing the impact of that.”

The platform also appears to be making deliberate trade-offs between reach and effectiveness. According to DataReportal, TikTok’s own advertising tools suggest its potential advertising reach declined 1.71 million (17.6 per cent) between the beginning of 2024 and early 2025.

The decline is against TikTok’s base of Australian users aged 18 and over (8.01 million as of early 2025), given that the platform’s tools only show audience data for adults, despite allowing marketers to send ads to users aged 13 and above using broad targeting options.

DataReportal caveats that decline with a note that the fall in potential ad reach may not necessarily reflect a decline in actual users, and could account for revisions made to remove duplicate or inauthentic accounts. 

Meanwhile, over the same period, Meta's ad tools claimed a reach increase of 550,000.

TikTok in November 2023 also shifted to automatic use of broad targeting options for all ads, which it claimed could drop acquisition costs 15 per cent while pumping conversion rates up to 20 per cent higher. AI-driven targeting could also have affected reach as TikTok focuses more heavily on algorithmic engagement. 

Either way, the firm appears to be taking the same approach to rebalancing its local operation.