The TikTok era of social advertising marches on.
Moving way beyond its roots as a forum for lip-syncing and dancing teens, this short-form video app has blown up the model of what a social network can be, and it is increasingly a must-buy for a growing number of advertisers. TikTok isn’t the same as Facebook, Instagram, Twitter, or YouTube, where advertising typically equates to buttoned-up and polished productions. To excel on this channel, brands must embrace creator-led, user-generated, unfiltered content to tell their story. And above all, they must be authentic. Indeed, nailing the creative in a way that is real and raw should be priority number one for advertisers on TikTok.
Powered by a dynamic algorithm that quickly gauges individual user preferences and then curates a highly personalized “For You” page (FYP), TikTok doesn’t have its users tell the platform what they want to see—rather, it tells them. And the internet, and advertisers, seemingly can’t get enough. The app is continually developing and implementing ad capabilities and features, yet there is already much for media buyers to get excited about, particularly with TikTok’s next phase of ad growth enabling advertising both down the funnel and deeper into social commerce.
Of course, it’s not a channel without its share of troubles and controversies. Nearly three years after the Trump administration threatened to ban the app if its Chinese owner ByteDance didn’t divest, TikTok is once again facing an existential threat. US lawmakers on both sides of the aisle are renewing calls to remove it from US app stores, citing perceived risks to national security and user safety. As a result, TikTok has become a symbol of rising geopolitical tensions between the world’s two largest superpowers, and there is unlikely to be any resolution to this saga any time soon.
Nevertheless, even in the face of all the controversy, TikTok has become a go-to app for millions of users and a must-use for countless advertisers. Here, we explore the evolution of TikTok through a collection of stats and facts. We’ll cover all the good stuff and all the ban-related stuff as we look to paint a picture of why TikTok continues to be the talk of the digital advertising town. Let’s go.
It is, quite literally, a multi-billion-dollar question: just how did TikTok go from being a niche player just four years ago to one of the most popular apps on the planet? The reality is there is no single answer, but instead a combination of factors: simple and easy-to-use video creation tools that blur the metaphorical line between creator and consumer; shrinking attention spans that pave the way for short-form video to thrive; a vast library of licensed music that allows users to easily enrich their clips with audio without fear of copyright infringement; and a community and collaborative feel within the platform (think hashtag challenges and Stitch). Its model is so successful, in fact, that it has frightened Meta and YouTube (and others) into disrupting their own business—Instagram Reels and YouTube Shorts, anyone?
That was the invitation TikTok laid out for advertisers when it opened its brand-facing wing back in 2020. And with the company’s revenues skyrocketing, it appears that challenge has been gleefully accepted. TikTok’s ad business made its first foray into performance marketing with lead-generation ads that empower brands to collect information from prospective consumers through forms and contests. Since then, TikTok has been busy significantly expanding upon those offerings, rolling out formats like interactive add-ons, search ads, and collection ads that together look set to play a fundamental part in the app’s monetization strategy.
TikTok has disrupted how an entire generation connects, shops, entertains and educates itself, and ultimately perceives the world. To understand why TikTok is so popular with Gen Z is to understand their inherent characteristics. Research shows that one of the defining features of today’s youth is an expression of “individual truth”. They are also the first generation of online natives—well-acquainted with digital advertising tactics and therefore naturally drawn to fresh ideas and creative storytelling (for example, unfiltered videos!). The fact that TikTok facilitates self-expression and celebrates authenticity plays right into their hands. In other words, TikTok and Gen Z were made for one another.
For a long time now, TikTok has been the elephant in its competitors’ boardrooms—and on their increasingly regular disappointing earnings calls. The app’s recent advances in ad technology, measurement capabilities, and expansion into the digital marketing ecosystem (for instance, through music streaming and mobile gaming) indicate that TikTok is not content to simply sit in the realm of short-form video. The platform is already siphoning ad dollars away from Meta, but the diversification of its portfolio could soon pit TikTok against the likes of Spotify, Apple, Amazon, and Google as it transforms into a public square for news and conversation.
As of early 2023, rumblings about a possible TikTok ban in the US have grown from a whisper to a roar. After the US federal government and numerous states outlawed use of the app on government-issued devices (something many other countries have done as well), a House panel went a step further and voted to approve a measure that, if passed by Congress, would give President Joe Biden the power to remove TikTok in the US outright.
Feeling the metaphorical heat, TikTok has been offering a series of olive branches to regulators in an effort to cool the pressure—for example, providing more transparency into its famed algorithms and restructuring its US-based business operations. They don’t appear to have been particularly well-received, though, judging by the pummeling TikTok CEO Shou Zi Chew got from a congressional committee back in March. All said, TikTok is stuck between a rock and a hard place right now, and all the scrutiny it’s under may well stand in the way of its US growth and brand marketing ambitions. Only time will tell.
TikTok has become a digital advertising powerhouse seemingly overnight. Its consumer appeal and high engagement rates across numerous verticals make it a worthy option for ad spending at a time of economic uncertainty. But as a new(ish) channel, figuring out just where it fits into the digital media mix and how much budget should be dedicated to the platform remains a significant challenge for brands. There’s also the threat of a ban to at least consider, and while nothing is likely to happen in the immediate future, marketers would be wise to start scenario planning and stay flexible with social ad buys so they can pivot to an alternative video platform quickly if needed.
One thing is for sure, though: TikTok remains social media’s golden child, and there are great rewards available to those that get it right.
Want to learn more about how to approach TikTok advertising? Check out our blog post, The Do’s and Don’ts of TikTok Marketing to get all the tips and tricks you need to succeed. Or, if you’re looking for more general advice about your media campaigns yet don’t know where to begin, our Media Strategy & Activation team can point you in the right direction.