The ‘mantra’ that helps TikTok become an advertising giant makes Facebook, Instagram and YouTube wary

Last month, Tiffany & Co. shared a beautiful black and white video featuring pop star Beyoncé. The one-minute jewelry ad was posted on Instagram and garnered 1.6 million views.

A week later, Tiffany posted another video on TikTok, in which KOL Kate Bartlett chatted live with viewers and tried on small pieces of jewelry at the Tiffany store. This video has been viewed more than 5.2 million times.

In recent years, TikTok – owned by ByteDance (China), has grown into a digital advertising company, making it easier for brands to advertise on its platform.

This year, TikTok is on track to earn nearly $10 billion in ad revenue, more than double last year, according to estimates from research firm Insider Intelligence. TikTok’s ad revenue this year is expected to outperform rivals like Twitter and Snap, although TikTok’s business is still small compared to Google and Meta, which own Facebook and Instagram.

Photo: Internet.

TikTok is still growing even as digital advertising tends to falter during the global economic downturn. The recession has affected Snap, Google and Meta. And TikTok, while not entirely immune, seems to be exacerbating competitors’ difficulties by “stealing” their business contracts.

Snap recently called TikTok one of its “very large and very sophisticated competitors”. YouTube, which last month reported its first drop in ad revenue in three years, also recently started placing ads in Shorts, the short video-sharing platform the company built to compete with TikTok. Meanwhile, Mark Zuckerberg, CEO of Meta, called TikTok a rival at least five times during a meeting in February.

Despite concerns about some issues such as content quality, companies still rush to advertise on this application because of its large reach, especially young customers.

According to data analytics firm Sensor Tower, TikTok users spend an average of 96 minutes a day on the app — almost five times as much time as they spend on Snapchat, three times as long on Twitter, and nearly twice as long. space for Facebook and Instagram.

“TikTok is swallowing the world,” said Rich Greenfield, technology analyst at LightShed Partners. The only important thing in the entertainment world is time spent. If your app is being spent less time by users because of TikTok’s market share, you’ve lost.”

To boost its ad business, TikTok has made some unusual moves. Unlike other social media platforms, TikTok has ads that appear like any other video on the platform, so viewers aren’t always immediately recognizable as ads.

The app has pushed brands to partner with their creators, making ads seem more natural. TikTok has told brands: “Don’t do ads, make TikTok videos”.

Photo: Internet.

And advertising on TikTok has achieved many results. Last year, menswear company Swet Tailor posted a video on TikTok promoting the same shirt, in different colors, being thrown over a man filming. The video has garnered 5,000 views, far more than most TikTok videos posted by the company, which have less than 300 followers.

In two weeks, Swet Tailor sold 35% of the inventory for the shirt featured in the ad, compared to 5% normally. By contrast, ads on Facebook and Instagram “barely work,” said Adam Bolden, CEO of Swet Tailor.

Swet Tailor currently spends 15% of its marketing budget on TikTok, mostly on partnerships with influencers. Recently, the company said it wanted to increase this number to 50% to target the platform’s younger audience and the success of its campaigns in getting viewers to buy.

“We know Facebook and Instagram are losing a lot of traction in the marketplace,” Bolden said. We realize that promotional video is becoming extremely important, if not mandatory.”

According to the New York Times, many other businesses have made similar changes. However, not all businesses are skillful enough to create attractive, non-offensive advertising content.

Meanwhile, some advertisers are hesitant about TikTok for reasons such as the ownership of parent company ByteDance or the company’s handling of data security.

Other advertisers worry about fake accounts. According to ad fraud and privacy compliance software company Pixalate, in September, about 7% of TikTok’s app traffic was invalid. As a result, businesses worry that the money they spend is not producing the results they really deserve.

For its part, a spokesperson for TikTok said it has partnered with ad technology companies to combat invalid traffic.

Source: NYT