Popular short-video app TikTok is running a booming ad business.
Key Details
- TikTok continues to grow in popularity boasting around 750 million monthly users.
- The app is home to millions of short-length videos, but it is also home to a huge amount of advertisements.
- It is on track to make around $10 billion in ad revenue this year, which is double what the app brought in last year, according to research company Insider Intelligence.
- Meanwhile, Warner Bros. Discovery CEO David Zaslav said at today’s RBC’s 2022 Global TIMT Conference in New York that the overall advertising market was weaker than at any point during 2020′s coronavirus pandemic.
Why it’s news
TikTok is one of the most popular apps with millions of monthly users across the globe.
While ad revenue seems to be down across the majority of other apps TikTok seems unphased and continuing to grow its ad revenue.
Digital ads have been down over many other apps including Snap, Google, and Meta and it looks as if TikTok is taking business from the well established companies.
What stands out about TikTok is that sometimes the ads don’t look like ads. The app makes ads look like every other video on the app which makes it harder to distinguish them as ads thus many viewers watch the whole video.
Many brands are recognizing the importance of TikTok and how well the ads are doing on the platform. Some companies have even implemented roles into the company just for the sole purpose of directing all ads on the app and are dedicating whole advertising budgets to the app as well.
Hesitation
While many brands are jumping right on the TikTok bandwagon others remain weary. A big holdback for many companies is that the app still remains tied to China.
Concerns have been raised for years about Tik Tok and its parent company ByteDance’s connections to China and many are holding back on advertising on the platform for this very reason.
Former President Donald Trump spoke out against the dangers of the app during his term and threatened to ban it, although President Joe Biden rescinded the threat.
“Growing anti-TikTok sentiment among media executives and renewed calls by government officials to ban the platform are causing some advertisers to be more cautious,” said analyst at Insider Intelligence, Jasmine Enberg.
Regardless of the company’s ties with China it still remains one of the top ad producing apps and it doesn’t look to be slowing down anytime soon.