WARC has upgraded its 2023 adspend forecast for TikTok by almost $2bn to $15.2bn, noting that 75% of marketers plan to increase their activity on the platform.
The forecast means that TikTok would reap a 52% increase in ad revenue over 2022 and account for almost a third of rival Instagram’s advertising business, which is expected to generate around $50m this year according to separate figures from Insider Intelligence.
The popularity of TikTok has reached colossal heights within the past two years, making it an integral digital and popular platform for brands – especially those looking to reach younger audiences.
For a third year running, TikTok was the most-downloaded app in the world. Its full-screen, vertical video format has also set a blueprint for similar social media products, such as YouTube Shorts and Instagram Reels.
“TikTok plays a growing role in culture around the globe. Its potential ad reach stands at a reported 1.05 billion users, including 409.1 million users aged 18 to 24,” Alex Brownsell, head of content at WARC Media, explained.
WARC Media predicts that all product categories will increase TikTok advertising investment in 2023. This even includes sectors that will see an overall decrease in adspend, including automotive and soft drinks.
“We’ve taken a closer look at TikTok to provide marketers with evidence-based insights on the challenges and opportunities the platform offers at a time when media costs are increasing and media models are shifting,” Brownsell said.
The top five spending categories (technology and electronics, toiletries and cosmetics, retail, clothing and accessories, and telecoms and utilities) are forecast to see their combined annual spend on TikTok surpass $8.5bn.
The technology and electronics sector is expected to increase TikTok adspend by 14.3% to $2 billion.
The bullish adspend trend comes against a background of increasing establishment skepticism about the security of TikTok, which is owned by Chinese company ByteDance.
The UK this week banned the app from government devices, following similar action by the US, the European Commission, Canada, Belgium and India.
TikTok insists it does not share data with Chinese officials, but Chinese intelligence laws require firms to help the Communist Party when requested.
Thomas Walters, chief executive, Europe, and co-founder of influencer marketing agency Billion Dollar Boy, believes brands and content creators that have invested heavily in TikTok may suffer as a result of the government ban.