After organic success on TikTok, more DTC brands are diversifying their budgets
It’s been removed from Instagram three times for cannabis-related content, but the THC-infused beverage Cann has been posting TikToks this year with what cofounder Luke Anderson describes as “interesting, funny, and sharable” content that doesn’t violate cannabis-related marketing regulations.
Instead of just using traditional social media influencers, the California-based company has relied on a handful of its three dozen celebrity investors. (Celebrities featured in Cann’s TikToks include former Olympic skier Gus Kenworthy, actress Sara Michelle Gellar and drag queen Kornbread Jete while investors Gwyneth Paltrow and Rebel Wilson have shared Cann content on various platforms.) With barely more than 5,000 followers, the two dozen TikToks have racked up millions of views and led to tens of thousands of user-created videos inspired by Cann’s recent pride-theme campaign.
At Imperia Caviar, marketing manager Daniel Lee still spends more money on Facebook and Google. However, TikTok is now one of the top three traffic drivers to the Caviar brand’s website. Some videos—including one featuring the caviar “bump” trend—have been seen millions of times despite the company’s account on the platform having fewer than 14,000 followers
“We’re due for a digital marketing evolution because there’s so much spray and pray,” Anderson said. “And if you look into what’s happening, none of these are ROI positive.”
Beyond cannabis and caviar, an array of marketers are seeing more success on TikTok. Although Facebook and Instagram have long been mainstays for DTC commerce, brands and agencies say rising ad prices, declining organic reach and shifting formats have made them increasingly open to testing new platforms and diversifying their ad budgets.
In recent months, Meta has faced what some have described as an existential crisis as it navigates weakened data-targeting from Apple’s iOS changes alongside increased competition from TikTok. It’s also angered some Facebook and Instagram users by increasingly prioritizing algorithmically recommended videos with Reels, a TikTok clone. Along with reporting its first-ever decline in quarterly results, Meta faced more scrutiny last week after Kylie Jenner and Kim Kardashian shared a meme asking to “Make Instagram Instagram again.” (The meme was created by photographer-influencer Tati Bruening, whose petition on Change.org now has nearly 300,000 signatures.)
Despite the pushback, Meta insists it’s already seeing momentum with the new formats. The time people spent using Reels increased 30% across Facebook and Instagram in the second quarter and accounted for 20% of the total time users spent on Instagram. On the company’s second-quarter earnings call last week, CEO Mark Zuckerberg said ads within Reels are “actually making faster progress than we’d expected” and that the format reached a $1 billion annual revenue run rate faster than ads within Stories did they first launched.
“In theory, we could mitigate the short-term headwind by pushing less hard on growing Reels,” Zuckerberg said. “But that would be worse for our products and business longer term since we’re confident that Reels will grow engagement overall and quality and will eventually monetize closer to Feed.”
Meta is still the “blue elephant in the room,” said Cody Faldyn, director of social media at Dentsu Media, but rapid shifts in the attention economy have led about a third of the agency’s clients to start further diversifying the share of ad spend across platforms.
“Given the advances that we’ve seen with social commerce coming on board,” Faldyn said. “It’s opening the door to so many different opportunities for advertisers to take advantage of.”
In the battle for budgets, some marketers are seeing the benefits of both. The personal care brand Dr. Squatch spent nothing on TikTok just a year ago, but now chief marketing officer Josh Friedman said it’s spending between 15% and 25% of its overall budget on the platform at any given time. However, he said Facebook and Instagram still make up more than 50% of the company’s marketing budget and that relatively small-scale tests with Reels have made him “really optimistic.”
Stevie Clements, chief brand architect at CAVU Venture Partners, said Apple’s privacy changes within iOS have made it increasingly difficult to find new customers, leading the venture firm’s portfolio of brands to experiment elsewhere. For example, the prebiotic soda Poppi and the vegan body care brand Osea Malibu have shifted their focus from Facebook to TikTok after seeing “huge success.” But it’s also not always either-or. Clements said some companies are using influencers on Facebook in a “true 360 way” but then leaning more on “authentic” content on TikTok and that the platforms’ distinctions require marketers to “win on both.”
Spending on TikTok is more efficient, Clements noted, explaining that organic and paid media go further on the platform: “I think it’s working out for a lot of these brands who are approaching their media mix in a diverse way.”
After spending a decade at Facebook, Pinterest and most recently Snap, Gazmend Alushi — now president of measurement and analytics at the influencer agency Whalar — has seen plenty of changes in each platform as they copy and compete with each other. Recalling when Instagram first introduced Stories in March 2017, he said the “harsh reality” is nobody cares about who creates a format first, just who does it best. However, he’s not seeing the usual signs that Instagram users are open to the current changes.
“At the end of the day, they (Meta) are nothing without a passionate consumer base,” Alushi said. “And people are passionate users of the Instagram app.”
TikTok’s uncertain future: the issues marketers should (and shouldn’t) fret over
A TikTok ban would require U.S. lawmakers to prove that the short-form video app is a genuine national security risk. So far, that hasn’t happened.
Maybe Web3 isn’t as dead as it would seem, as agencies play with new data-generating models
Agencies are continuing to invest in Web3 technologies in new ways, from client activations to data management.
Why real estate company Windermere is adding influencers to its marketing mix and spending half of its ad budget on them
Windermere is working with Seattle-based agency PB& as well as the home-focused publication Domino to partner with influencers like design influencer Max Humphrey.
SponsoredHow critical data pillars will increase brands’ confidence in CTV
Mario Diez, CEO, Peer39 With every quarter, the balance of TV viewership slips away from the traditional linear model and more towards connected TV. Less than half of the adults in the U.S. subscribe to cable or satellite, and fewer than half of the households watched linear TV daily in the second half of 2022. […]
‘I hate advertising in games’: Q&A with Epic Games’ Tim Sweeney and Saxx Persson on the future of Fortnite, Unreal Engine
Marketers be warned. Don’t mention in-game advertising to Epic Games boss Tim Sweeney. He does not care for it, and has no plans to move into the ads business.
Of all the concerns marketers may (or may not) have about TikTok right now, the pixel isn’t one of them
Marketers have a lot on their minds when it comes to TikTok these days, from the geopolitical tensions over the app’s supposed ties to the Chinese government to whether they should be funding some of the content on it.