Digiday+ Research deep dive: Agency spending on TikTok plateaus as brands struggle with what to make of the app

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TikTok has no doubt established itself as a staple within the culture of social media, but agencies and brands have yet to fully crack the case of the platform’s marketing potential.

In a survey of 138 agency and brand professionals, Digiday+ Research found that agency clients’ spending on TikTok may have hit a plateau, while brand marketers are still searching for the right answer when it comes to how much confidence they should have in the platform.

Digiday’s survey found that TikTok comes in seventh among the channels and platforms agency clients spend their marketing dollars on — well behind Meta platforms Facebook and Instagram and search giant Google, which make up the top three. Seventy-six percent of agency pros said their clients spend at least a very small portion of their marketing budgets on TikTok.

However, very few agencies said their clients spend a lot on the platform: Only 11% of agency pros told Digiday their clients spend a large or very large portion of their budgets on TikTok.

Among brands, TikTok is the eighth most invested in when it comes to marketing channels and platforms. Fifty-four percent of brand pros told Digiday that they spend at least a very small portion of their marketing budgets on the platform — a pretty far cry from the 76% of agency pros who said their clients invest there.

Only 12% of brands said they spend a large or very large portion of their marketing budgets on TikTok.

Agency spending on TikTok has seen a significant jump in the last year — 64% of agencies said their clients put at least a very small portion of their marketing budgets toward TikTok a year ago, compared with 76% now. And a year ago, not one respondent said their clients spent a very large portion of their budgets on TikTok, while 3% said so this year (admittedly a very small change, but still worth noting).

However, most of the growth seems to have happened in the first half of last year, with little change occurring in the last six months. Not one spending category saw a significant change from Q3 2022 to Q1 2023, according to Digiday’s survey. Most agency spending on TikTok continues to happen in smaller amounts, with about a quarter of agency pros saying their clients spend a very small portion of their budgets (25%) or a small portion (27%) on the platform — percentages that have remained consistent over the last year.

The only slight bump in the last six months came among agencies who said their clients spend a large portion of their marketing budgets on TikTok. But even that was only a difference of 5 percentage points — 3% of respondents said this in Q3 of last year, compared with 8% in Q1 of this year.

The data does beg the question, has agencies’ spending on TikTok plateaued?

Digiday’s survey found that there’s a lot more movement in TikTok spending when it comes to brands.

To start, it’s very fair to say TikTok has come a long way with brands since two years ago, when 73% of brands told Digiday they weren’t putting any of their marketing budgets toward the platform. Comparatively, only 46% of brands said they currently aren’t putting any budget toward TikTok — a percentage that has held steady over the last year.

The percentage of brands who said they spend a small portion of their marketing budgets on TikTok has fallen significantly in the last six months, from 24% in Q3 2022 to just 3% in Q1 2023. Meanwhile, the percentage of brands who said they spend a moderate portion of their budgets on TikTok has fluctuated quite a bit over the last year. In Q1 2022, 15% of brand pros told Digiday they spent a moderate amount on TikTok, which fell to 7% in Q3 2022. This quarter, the percentage is back up to 18%.

Interestingly, the percentage of brands who said they spend a very large amount on TikTok has popped in the last six months. In Q3 of last year, not one respondent told Digiday a very large portion of their marketing budget went toward TikTok. In Q1 of this year, that percentage is up to 6% — a small number still, but worth mentioning.

Agencies’ potential plateau in marketing spend on TikTok is backed up by the extent to which agency pros told Digiday they’re confident that the platform drives marketing success for their clients. It turns out that most agencies are only somewhat or slightly confident in TikTok’s ability to drive marketing success: 35% said they’re somewhat confident in TikTok, and 31% said they’re slightly confident in TikTok.

The percentage of agency pros who said they are only slightly confident in TikTok did see a jump in the last six months, from less than a quarter six months ago (23%) to nearly a third (31%) in Q1 of this year.

Meanwhile, the percentage of agencies who say they’re confident in TikTok’s ability to drive marketing success is trending downward. A year and a half ago, 24% of agency pros told Digiday they were confident in TikTok. For all of last year, that percentage dropped to 15%. And it dropped slightly again at the beginning of this year to 11%.

Just as with brands’ spending on TikTok, there is also significant movement in whether they’re confident that TikTok drives marketing success. The fluctuation in brands’ confidence over the last two years seems to indicate that brands really don’t know whether TikTok is actually a successful marketing channel.

For example, the percentage of brand pros who told Digiday they’re not confident at all that TikTok drives marketing success has been down, then up, then down, then up again since Q1 2021. The percentage peaked at 35% a year ago, and, after falling to 17% six months ago, is climbing again (27% of brands aren’t confident at all in TikTok as of Q1 of this year).

Meanwhile, the percentage of brands who said they’re confident in TikTok’s ability to drive marketing success is up significantly in the last six months. Thirteen percent to 14% of brands said they were confident in TikTok through Q1 of last year, before the number shot up to 24% in Q3 of last year. This quarter, 21% of brands told Digiday they’re confident in TikTok.

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