TikTok has its fair share of problems including geopolitical tensions, privacy issues, internal strains and worrisome content. Yet none of it seems to matter to marketers who can’t get enough of TikTok — or its users. Time and again this happens in advertising: ad dollars flow where the audience goes.
And the ad dollars continue to shift to TikTok from other channels, from Facebook, YouTube, Snapchat, even TV. This is happening despite recent warnings in the U.S. from political leaders whose national security concerns could spark regulatory action against TikTok, which is owned by China-based ByteDance.
“The TikTok ban in certain countries due to its connection with China or the backlashes connected to China’s extremist policies may affect advertisers’ short-term spending,” said Brian David Crane, founder of digital marketing agency Spread Great Idea. “But ad spending has always rebounded, which shows this platform has aced the science of leveraging eyeball visibility.”
A spokesperson for TikTok didn’t immediately return a request for comment.
To have maintained marketers’ ad spend right now is critical. Demand like this is a boon for any media business at the best of times; even better during a downturn when advertising can contract.
That’s not to say marketers are oblivious to all that ails TikTok. They’re wary — but only to a point.
“We’ve seen a couple of brands that won’t put the TikTok pixel on their site because it didn’t pass their security teams protocols and expectations,” said Adam Telian, vp of media services at New Engen, without naming specific clients. “So they’re advertising on the platform, but they’re not giving access to their first-party data.”
But the reality is that TikTok continues to be one of the best platforms for reaching new buyers for many marketers, and stopping before they have to is just wasting time and money.
“Typically we see this money come from either other social media budgets, or incremental brand spending that has been allocated due to a shifting economic climate,” said Alex James, head of paid social at Alpha Digital. “In Australia, while the majority of e-commerce ad products on TikTok remain out of reach, it really is about tapping into that younger audience in a more engaging environment than the standard scrollable feed.”
Moreover, reaching this audience is cost effective at a time when it isn’t elsewhere. Apple’s privacy changes have also made it increasingly difficult and expensive to reach audiences on social platforms. While TikTok has been hit by those changes, its ad prices continue to remain cheaper than those on Facebook and Instagram.
“On average we are seeing TikTok’s CPCs and CPMs 25 to 50% less than Facebook or Instagram,” said Rob Jewell, chief growth officer at Power Digital Marketing, without giving specific figures. “More brands are looking to TikTok to drive lower traffic costs to their site during a time when traffic costs soar across all marketing platforms.”
That’s clear from how much budgets have grown over the last year. Since 2019, TikTok’s next stage of growth had been earmarked for further down the marketing funnel. Back then, TikTok’s decision makers were concerned about becoming another cheap reach option for advertisers, but believed commerce could demonstrate how the platform could be a destination for performance as well as branding dollars. That said, the idea has only started to catch on with marketers in the last six months or so. Not least because TikTok drummed it into them.
TikTok has boosted its ads business with new tools for advertisers as it claims to now have 1 billion users. “The size of the user base has grown so much, and TikTok has proven its ability to drive full funnel results for clients,” Telian explained. “By improving their pixel and data capture capabilities, the app is seeing better results in the lower funnel. TikTok has really shown its capabilities in driving conversion.”
“We’ve seen ad budgets for TikTok balloon in the past year to the point where ad spending has increased several fold in comparison to the fourth quarter of 2021,” said Annalise Curvelo, senior director of business development and partnerships at Sightly. “We’re seeing money being pulled from platforms like Meta and into TikTok campaigns.”
Indeed, Facebook’s losses seem to be TikTok’s gain — well, sort of.
“It’s [Facebook is] a natural place to pull from,” said Telian. With demand only increasing for presence on the platform, its likely ad spend will be pulled from every direction. “It’ll come from linear TV dollars that start to filter into TikTok as that becomes their consumers’ choice of video consumption,” explained Telian. “It’ll come from Facebook, from YouTube — the dollars flow to where brands’ audiences are and where their performance is being seen.”
To be clear, TikTok isn’t really rivaling Facebook and Instagram for ad dollars. Those platforms continue to take up some of the largest parts of a media budget. It’s just that advertising has either plateaued or isn’t as effective (thanks to Apple) so marketers aren’t spending as much of their dollars there. It’s really the smaller platforms like Snapchat and Pinterest, where marketers are faced with an either/or predicament, that TikTok is increasingly winning out.
“While multi-platform campaigns are keeping core budget and strategy on Meta, we’re seeing a lot more spend going to TikTok than other platforms (like Snap or Pinterest),” said Meara McNitt, social media director at Online Optimism. “As the platform has shifted to be a place of search, users are open to ads centered around brand discovery.”
With this in mind, Christina Miller, head of social at digital agency VMLY&R, explained TikTok has already been ramping up its efforts for the holiday period since the summer. “TikTok announced shopping ads in August just ahead of holiday campaign planning, which aim to help advertisers meet shoppers wherever they are in the purchase journey,” she said.
The new ads span across video shopping, catalog listing and live shopping. “This increased commerce products offering signals TikTok will continue to invest and likely put more emphasis on advertisers to take part in video and live shopping in the near future once again,” Miller added.
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