How TikTok could overtake YouTube, Facebook

  • TikTok, whose explosive growth has put Facebook parent Meta under scrutiny, was introduced to advertisers at IAB NewFronts on Wednesday.
  • It’s becoming a staple for advertisers, threatening to eclipse Snap and Instagram with its Gen Z appeal.
  • Advertisers explained what the app does right to get their budget and where it needs to go next.

TikTok is the fastest growing social media platform and it threatens everyone in its path, from Meta and Snap to YouTube and even linear TV networks, as brands flock to the ByteDance owned app from social, digital and traditional budgets.

Insider information predicts that TikTok’s ad revenue will triple to nearly $12 billion this year, surpassing Twitter and Snapchat combined and catching up with YouTube by 2024.

“It’s been a long time since I’ve seen another platform get this much traction since Facebook joined,” said Toni Box, senior vice president of social media at ad agency Assembly.

TikTok is not only popular with its 1 billion monthly active users, but influential – when the war in Ukraine started, the White House informed the TikTok stars of the situation, knowing that young people were receiving updates on the platform.

It has endeared itself to advertisers by expanding into e-commerce through TikTok Shopping, a marketplace that directly connects brands and influencers; and in partnership with providers such as DoubleVerify, Shopify and OpenSlate.

ICT Tac announced Wednesday its latest advertising product, TikTok Pulse, which allows advertisers to appear around the main content of its “For You” feed, described as the top 4% of all videos on TikTok.

Sandie Hawkins, managing director of North America and global commerce solutions, said at TikTok’s NewFronts presentation that advertisers can run ads on the top 4% of content across 12 categories, including fashion, cars and games. She said it can be purchased through a TikTok Ads Manager at a flat rate using TikTok’s brand safety filters and third-party verification tools.

TikTok has also taken on rivals like Instagram with features like its own form of Stories, allowing users to post videos that disappear after 24 hours. Ad buyers believe it could also make for a bigger game for viewers, seeing it break into YouTube territory with longer form video content.

“Not only will this help solidify their share of younger viewers away from traditional broadcasting, but it will draw older users to the platform to diversify their age cohorts,” said Katie Price Ross, Director of Activation to the independent media agency Curiosity. “As more advertisers divert their spending away from TV and channel it into social media, this will cement TikTok’s place in the media plans.”

TikTok focused much of its NewFronts presentation on creators and the opportunities they present for brands. For example, the platform said that brands that work with TikTok creators increase brand likeability and brand recommendations by an average of 26% and 22%, respectively.

Ad buyers are also looking to TikTok to expand its shopping features.

“TikTok will likely continue to explore the #TikTokMadeMeBuyIt effect and demonstrate how e-commerce can be integrated within the platform,” said Ross, whose clients like Brooks Running and FreshDirect have seen their sales grow through at TikTok Shopping.

Granted, TikTok’s ad business still pales in comparison to Meta, with $115 billion in ad revenue in 2021; and to a lesser extent, YouTube, with around $29 billion.

As a young platform, it needs to catch up in measurement and targeting capabilities to earn significant ad dollars. Advertisers want the app to better link engagement to actual sales for performance-based marketers, add more third-party attribution providers, and give brands more ways to identify consumers.

And Meta and YouTube haven’t stood still. The two retaliated with their own shortened video versions, Reels and Shorts, respectively.

But some ad buyers say Reels and Shorts hasn’t garnered cult following or creator interest to justify significant ad spending. One said people just don’t use YouTube to share and binge on trending 60-second videos like they do on TikTok and called the results of both products mediocre.

TikTok, meanwhile, is already outperforming rival platforms including Meta in some areas.

The platform hasn’t been as impacted as Facebook by Apple’s privacy changes last year that hurt advertising effectiveness, and some Facebook advertisers have transferred money to TikTok in response.

Jon Severson, vice president and director of paid social networks at Mediahub, has spent much of the last year testing and learning about TikTok for customers, drawn by its engaging, diverse and growing user base. He has also seen campaigns work there. A fintech company that was trying to increase app downloads and drive customers to use TikTok for hypertargeting, with more success than any other platform.

“It’s not just that the user experience is engaging, immersive and personalized,” Severson said. “TikTok is the most transparent with these attributes, allowing marketers to better educate their prospects and existing customer base.”

Ross said TikTok ads compared favorably to other platforms, including Meta on clicks and costs, which she attributed to brands creating more fun, native content for the app versus more. refined on Instagram and Facebook.

And TikTok is winning in the key Gen Z demo where Facebook is losing appeal. Insider Information, which shares a relative with Insider, reported that TikTok attracted 37.3 million monthly Gen Z users in 2021, second only to Snapchat and ahead of Instagram’s 33.3 million and Facebook’s 28.7 million.

“Nothing structural is stopping TikTok from approaching the size of a Snap or Instagram in the near future – they have more diverse functionality and are multidimensional in terms of time spent and holistic user signals captured natively by the platform. -shape,” said Jon Morgenstern, chief investment officer at VaynerMedia.

Comments are closed.