TikTok’s ad network bet: More reach, more budget

For TikTok, the aim is to become the starting point for more of an advertiser’s budget. If marketers can use its data to find audiences they wouldn’t reach any other way, more of their spend runs through TikTok’s tech where the ads end up appearing. That addresses what Bryce Hamlin, vp of data intelligence at Power Digital sees as the biggest limitation of TikTok’s ads business today: marketers can only advertise to people who use TikTok. 

“That does have its advantages, but leveraging the same tactical and creative algorithms with a wider ad inventory off of TikTok would give brands more reason to increase share of wallet (if it works),” he said.

According to forecast data from eMarketer, TikTok recorded $14.12 billion in ad revenues in the U.S. last year and $34.62 billion in ad revenues globally, and that is set to increase to $17.69 in the U.S. and $43.89 billion globally by the end of 2026.

But TikTok is entering a market where advertisers already have plenty of ways to extend campaigns beyond individual platforms. Google has done it for years through its Display Network and AdMob, while Meta runs its Audience Network across third-party apps. Amazon DSP lets marketers apply its shopper data to inventory across the open web and streaming. LinkedIn sells off-platform reach through its own audience network.  

“There are already widely available platforms that do this,” said Farhad Divecha, group CEO of Accuracast. The question, he said, is what would make TikTok’s offering different enough for advertisers to move money from existing providers.

For some advertisers, the appeal could be less about replacing existing buying platforms and more about making TikTok campaigns more efficient.

Zeno Group’s evp paid media, Shamsul Chowdhury, said that access to network inventory could help reduce CPMs, provided advertisers have enough control over where their ads appear.

“This would be useful if there were guardrails around the types of apps we can control we’d be on, with a clear whitelist or blacklist option available,” he said.

Chowdhury added that the additional inventory could make TikTok more competitive if it could lower costs while maintaining or improving performance.

“TikTok is already a pretty appealing platform with its CPMs and performance so this would just be icing on the cake if it could not only further decrease CPMs, but also improve ROAS,” he said.

However, cheaper inventory is not necessarily the same thing as more valuable inventory.

Collective Measures’ performance media supervisor Zea Hirsh said that a TikTok Ad Network is potentially very valuable, but only if the network brings advertisers audiences they can’t already reach.

“TikTok’s signal is one of the strongest in the market, and carrying that signal off-platform — especially to retarget engaged users on longer purchase paths — could be a real performance opportunity,” Hirsh said.

But that opportunity depends on TikTok finding advertisers audiences they can’t already reach elsewhere. To win that spend, it will have to show buyers what they’re getting. Marketers will want to see the quality of the audiences and how transparent TikTik is about how their ads run. Above all, they’ll want proof that the spend drive results they would’ve have got anyway, measured in a way they trust.

“Lemon8 is a good example of why scale alone isn’t enough,” Hirsh explained. “TikTok already allows advertisers to extend campaigns to Lemon8 through Ads Manager, and we’ve opted out so far. For us, the question isn’t simply whether TikTok can put an ad in another app. It’s whether that placement gives us incremental reach to a valuable audience in a context that makes sense for the brand. That’s the value.”

Which is why simply adding more inventory doesn’t necessarily mean TikTok will capture more ad budgets.

“Having a larger ad network doesn’t make us move more money into TikTok,” said Lindsay Baker, associate director, social at Crossmedia. “The real value of TikTok is still TikTok itself, and any extension product would need to prove that the added reach is actually valuable, not just efficient.”