Earlier this week, China’s ByteDance, parent to social media video app TikTok, reported clocking in more than $7 billion in revenue for the first half of the year.
Over the last few months, TikTok has been the talk of the town in adland and beyond. The NFL recently signed a partnership with the social platform, celebrities are tapping into it, and its session at Advertising Week in New York last week was filled to capacity. [TikTok sessions at Spikes Asia 2019 were also well attended.]
Campaign US asked industry experts to share their views on the shiny object that is TikTok.
Will TikTok thrive and adopt advertising in a smart, monetizable way, or will it fold like its six-second video predecessor, Vine?
Mae Karwowski, Founder & CEO, Obviously:
TikTok is here to stay! It’s uncharted and authentic, and Gen Z is turning it into one of the most fun and engaging platforms out there. While it’s still early days for advertising on TikTok - think about how far Instagram has come in just a couple of years – the key right now for brands is to understand the platform, how people use it, and to make their hashtags appear everywhere on the platform. It's not like Instagram or Facebook. It's not even like Twitch or Snapchat. Brands need to know who their TikTok audience is and critically, have access to top-notch content creators. Then, they’ll be unstoppable on this channel.
Al Moseley, Global President & CCO, 180LA:
I have a confession – I’m a TikTok addict. Seconds can turn into minutes then hours getting lost in unselfconscious, honest and silly memes. But not only is it intensely watchable, they have discovered the holy grail and found a smart way to monetize their platform for advertisers through their promoted trending hashtags.
It asks users to engage with the ad/messaging in a more creative way than just an advertiser pushing a piece of content out. Encouraging users to create alongside paid creators and together they make authentic, often playful and very watchable content for brands. Whether it’s just a TikTok challenge like Chipotle’s Cinco de Mayo #ChipotleLidFlip which entices users to do an action/challenge or Marc Jacobs’#TheJoggerChallenge which encourages using a branded audio along with a creative challenge, there are different, fresh and interesting ways for users to actively participate with a brand’s content.
Even though I found Vine similarly addictive, it was resistant to monetization and didn’t have the features needed which meant it always struggled with growth. In comparison TikTok growth is on steroids.
Josh Millrod, group strategy director, Noble People:
I'm bullish on TikTok. They've shown an ability to affect broader culture beyond simply generating memes. Our early conversations with TikTok have been really rooted in brand fit and how to create for the platform, which bodes well for an ad product that doesn't drive their valuable audience away.
As long as they stay true to their users and push brands and agencies toward a media-led creative approach, they should be able to make a lot of money from themselves and their advertisers. However, I worry that big shops with big budgets will try to pull them towards becoming just another canvas to put display ads on.
Jordan Fox, CEO, Laundry Service:
Nope, TikTok won't go the way of Vine. Vine's death was due in equal parts to Twitter's challenges in 2016; lack of scale; and an inability to keep talent on the platform.
Compare to TikTok: its parent copy valued >$70bn with world class engineering resources. A billion highly engaged global MAU and growing. A thoughtful, gradual approach to monetization—they're designing polished, bespoke products for their platform, saying no to a ton of deals and being extremely selective about ad load and sponsor suitability.
The two things that could create problems for TikTok are talent and regulatory oversight. They need to build best-in-class tools and programs to retain and cultivate their influencers, and in the current geopolitical environment there's always the risk that regulatory action could impair the platform's growth.
Matthew Gardner, Co-Founder, Highfield:
My advice? Get used to TikTok. And yes, this may mean you have to actually learn what it is. Because TikTok has already thrived and adopted advertising in a smart, monetizable way. Apple's already advertising on TikTok the second their latest iPhone is announced, and those ads are seeing insane amounts of likes and comments.
And considering that TikTok is already generating at least $7 billion in revenue in the first half of 2019 alone, which dwarfs the revenue of Vine's parent company Twitter, I think it's a safe bet that TikTok has reached scale.
This is no Vine. This is the next Netflix.
Mitch Elsen, Founder, Hype Empire:
It’s easy to compare TikTok to the heydays of Vine because it reminds of the same Wild West vibe: Everything is possible, it’s an enormous network and it’s cool to be on it.
Compared to Vine I think TikTok specifically offers a lot more possibilities for creators to create.
At Hype Empire, we defininitely see solid interest from sports, especially from associations like NBA and plenty of sport clubs/teams in the US and Europe. It makes sense from a demographic/audience point of view, especially focusing on accellerating fan engagement for a Gen Z audience to push e-commerce, although for now I think it’s still about experimenting instead of monetizing.
It’ll be interesting to see what the future will bring in sports, especially because its not built for game highlights etc…. at the same time sports must embrace any new technology to avoid losing fans to any new forms of entertainment, because you might as well lose out on an entire generation of future fans simply by not being on the platform.
Ryan Kutscher, Founder, Circus Maximus:
It's like neighborhoods in NYC, Tik Tok is Bushwick right now, and there are a few forces at work fueling that. As Facebook/Insta have aged, and matured their business models those digital neighborhoods basically got brand gentrified and turned into Times Square. FB aged into your grandparents platform, instagram keeps prioritizing paid users (brands), and de-prioritized individual content creators. All of that has left a big opening for Tik Tok. If Tik Tok can figure out how to leverage meaningful metrics, brands will be interested. Can they do that without fucking up everything that people love about it? Probably not after Facebook buys it.
Sean MacDonald, Global Chief Digital Officer at McCann Worldgroup:
The demise of Vine must be understood within the broader business context at the time: the platform lacked vision or a pathway towards monetization; Twitter was laying off people to try to turn a profit; Snapchat and Instagram introduced more versatile long-form video formats; and Vine talent followed the money to these large scale platforms. Bytedance, owner of TikTok, is one of the largest private tech companies in China. Chinese companies tend to be hyper-customer centric, and move quickly to create new features and outsmart competitors.
Tik Tok has made video editing extremely simple, provides a broad array of face filters and lenses and has encouraged its community to develop quirky, irreverent content. Its monetization strategy is evident in TikTok’s vast array of advertising formats (brand takeover, in-feed native video, top view, hashtag challenge, branded lens) in addition to its commissions from the tips users offer creators. It continues to innovate and is on the verge of launching improved ad targeting.
It bought out its fiercest competition in North America, musical.ly, and has a strong footprint in the most populous countries: China, India and the U.S. If I had to bet, I’d say it’s here to stay. In fact, our teams at McCann Worldgroup just submitted work for our internal global creative competition with TikTok. We are eager to keep playing with the platform and see a bright future ahead.