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This article is part of a limited edition series called The 2023 Notebook, designed to guide you through marketing and media buying in the New Year. Check out the series here.
Marketers are still watching TikTok as a worthwhile investment, they admit There are still hurdles to overcome.
This is a promising endorsement for TikTok as the advertising industry enters 2023 and marketers look to the channels they’ve come to rely on as a potential recession looms. appears to be much more confident in short-form video apps. Think Estee Lauder, Spindrift, Supergut.
Admittedly, these brands are arguably still experimenting with what advertising on TikTok means to them, and haven’t given it the same level of scrutiny as other platforms. But this is clearly a period of discovery for marketers to familiarize themselves with the platform.
Why is the trust growing?
TikTok has made every effort to appease advertisers and capture advertiser revenue. This year alone, the platform’s ad formats, personalization and bidding strategies are much more sophisticated.
First of all, marketers now have a wealth of ad formats and units available.Previously, advertisers Pay for sponsored hashtags or promote branded videos. Tom Sweeney, Head of Strategy at Fanbytes by Brainlabs said: He said he recently “saw movie theaters advertising movie showtimes and allowing customers to make reservations within the app.”
TikTok has also stepped up its platform personalization over the past 12 months. Earlier, Sweeney said this was massive demographic-based targeting. But now the platform has deep-rooted psychological data about its users based on what they consume, and is willing to share it with advertisers.
“Personalization options are getting pretty good,” added Sweeney. “This is more based on user psychology than Instagram, Facebook, or other platforms that currently rely heavily on AI and machine learning to serve ads. It remains the last bastion, and it’s interesting that it has moved in that direction while others have not.”
Additionally, TikTok has introduced a new bidding strategy. In October, it was launched in a focused view designed to reach viewers who are actually engaging with the ad, rather than just waiting for it to finish. View products.
However, TikTok offers longer viewing times. And given that TikTok is much shorter than his usual YouTube videos, Sweeney said the platform appears to be eyeing Google.
“If storytelling is an important part of advertising, that’s great. It does a good job of proving that creative is the most important aspect right now. Especially on other platforms, Brands invest more in creative than in pure delivery.” Sweeney said.
The same applies to media dollars. For example, Disney+ increased its ad spend from just under $3 million in the first quarter of 2022 to $17.9 million in the third quarter, according to Sensor Tower. This is a 496% increase, albeit at a much lower base than other platforms.
Other advertisers seem to share the same view, as Benoit Vatere, CEO of digital media company Mammoth Media, explains: We spend a lot of money on TikTok because we’re frustrated by the increasing cost on Facebook along with the declining performance. ”
Digital marketing agency Power Digital’s TikTok budgets are growing on average by over 100% year-over-year. Ad spend increased even more during the week of Black Friday and Cyber Monday, with spending during this period up 170% compared to his year ago. Power Digital Chief Growth Officer Rob Jewell explains this point: Conversions on TikTok compared to meta. ”
The improvements TikTok has made this year have clearly had a positive impact on some brands. Some agency execs are seeing the change in their clients. Beth Carroll, head of social for her Iris, which has worked with brands like Adidas, Samsung and Pizza Hut, said her clients are currently focusing on media. In her plans she prioritizes TikTok as much as Meta. It says it does.
TikTok is maturing
Additionally, Zenith head of performance Rhys Westwell believes that TikTok has grown from an experimental platform to a more mature social app over the past year.
“From a digital perspective, TikTok is the third platform after YouTube and Meta when it comes to working on awareness and brand campaigns,” he said.
However, while the updates and innovations have certainly excited advertisers, not all ad spend has been converted yet.
Thomas Esposito, biddable’s digital marketing lead at performance marketing agency Croud, commented that much of his work on TikTok for clients is still very experimental. So it’s not based on the same KPIs and expectations he has on other platforms.
As Amy Gilbert, Head of Social at The Social Element, points out, being successful on TikTok with paid ads is very different from other social media platforms. “TikTok natives need to really create content for her, but other platforms could have avoided more generic ads,” she said.
But the reality is that once a brand starts experimenting with advertising, it doesn’t necessarily stop.
the experiment never ends
Fanbytes, for example, has heavily embraced advertising on TikTok, fueled by TikTok’s creative and cultural influence. According to Sweeney, TikTok’s share of marketing spend won’t necessarily increase because of the technology and ad units TikTok is building. They increase as brands become more confident.
“You can get so much more out of the app if you really listen to trends and how people are using the app, whether it’s the song of the month or the challenge,” commented Westwell. I’m here.
It’s no exaggeration to say that TikTok has forced marketers to rethink how they create and consume social content and advertising.
According to insider intelligence, direct-to-consumer (T2C) brands spent 231% more ads on TikTok in Q2 2022 than they did a year ago, data from analytics firm Triple Whale shows, largely driven by revenue growth. from $1 million to $5 million.
But while TikTok is on par with Meta and YouTube, these more established social apps are at an inflection point, their advertising business is being challenged, and the perfect opportunity for the platform to take some of those dollars. offers.
Future tasks
Of course, TikTok still has its own issues and headlines to deal with. In particular, the misinformation, disinformation, and security risks associated with his relationship with China through his parent company, ByteDance. The latter, for example, recently urged U.S. lawmakers at both the national and state levels to advance legislation banning government employees from using his TikTok on government-owned devices and computer networks.
That said, which platform marketers invest in is based on its popularity and ability to deliver a decent ROI. Now it’s TikTok. As such, marketers may care as much as they need to, as long as the brand’s reputation isn’t actually compromised.
Marketers can’t put TikTok on the back burner and hope that reach will come from elsewhere or have safer inventory, Sweeney said.
“We have come to a point where TikTok has been around long enough and we have good enough case studies to prove what works,” Sweeney explained. “Creative is incredible. There are specialist agencies like ours in this space that have delivered great results for up-and-coming brands and have a real impact on the bottom line.
“TikTok is no longer just a platform for awareness and views. It can now become a complete funnel product.”
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