TikTok: Social Media Fad, or Legit Marketing Tool?

TikTok, known for its short 15-second looping videos, has taken the world by storm over the past year. The platform has turned everyday people into celebrities overnight. As more and more people begin to use the app, brands have started exploring TikTok as a new advertising medium. However, does TikTok have the ability to join Instagram and Facebook at the top of the social media food chain? Or will it meet the same fate as the eerily similar Vine?

TikTok was released in the Chinese market as Douyin in September 2016. However, it only became available worldwide when it merged with Musical.ly, another Chinese social media service, in August 2018. The app is based around 15- to 60-second video clips that play on loop. TikTok’s unique video creation tool allows users to add filters, music clips, funny effects, and much more to their videos.

According to Influencer Marketing Hub, TikTok has over 800 million active users worldwide. Additionally, users spend nearly 500 minutes per month on the app. That means TikTok users spend a total of 400 BILLION minutes on the app every month! Currently, TikTok holds the number two spot on Apple’s App Store, one spot behind YouTube and one spot ahead of Instagram. As fears of a U.S. ban on TikTok have all but disappeared, it seems the app will only go up from here.

However, the question of whether brands will find value in using the app remains. TikTok’s advertising process and hyperlinking capabilities are just over a year old at this point. Plus, TikTok is just beginning to explore partnerships that will enable in-app shopping and make it easier for brands to sell products directly through the app.

Currently, TikTok offers several different advertising options. The first is Brand Takeover, where ads appear upon opening the app, presenting a full-screen video to the user. These cost somewhere near $50,000 per day and guarantee 5 million impressions. Next, In-Feed Ads appear in-between videos are users are scrolling through the app. To prevent users from scrolling right past these ads, attention-grabbing text or video is extremely important. Finally, Hashtag Challenges allow users to interact with a brand by submitting videos using the branded hashtag. These challenges are great at generating organic interactions, but cost $150,000 per week.

Even though TikTok’s power as a bona fide advertising medium is unproven, brands should not dismiss the idea of using the app completely. Even if a brand might not find value in advertising on TikTok, the app has its finger on the pulse of culture. TikTok could prove to be an extremely valuable research and learning tool for companies. It gives brands a window into the lives of Gen Z, who account for 41% of the app’s usage and $140 billion in spending power.

Additionally, some brands have found surprising success on TikTok through influencers and viral videos. Earlier this year, Ocean Spray, makers of cranberry juice, found themselves at the heart of a viral video by TikTok user @420doggface208. His TikTok showed himself skating down a hill while drinking Ocean Spray Cran-Raspberry juice and singing “Dreams” by Fleetwood Mac. The video ended up with hundreds of millions of views and almost 12 million likes. Not only did Ocean Spray gift @420doggface208 a brand-new truck filled with Ocean Spray juice, the TikTok video even brought “Dreams” back into top charts across the country.

These viral, un-planned videos are what makes TikTok great. Neither Ocean Spray nor Fleetwood Mac could have predicted the millions of people who would interact with their products based on one video. The viralness of TikToks is aided by TikTok’s ultra-easy shareability. Users can share TikTok videos to other platforms like Instagram and Twitter, and even save the videos on their phones to send to friends via text message. Therefore, people do not even have to be TikTok users or have the app on their phone to watch the videos. In the Ocean Spray example, the TikTok made its way to Twitter, Instagram, Facebook, and many other social media platforms which multiplied the people seeing it exponentially.

As TikTok continues to develop its advertising platform and open up new possibilities for brands, its power as a marketing tool will only increase. It would be a huge mistake for brands to dismiss TikTok’s potential. TikTok is here to stay. The sky is the limit for the brands that can leverage the power of TikTok best in the coming years.

Frank Romean, Fox School of Business Class of 2021

TU-AMA Director of Cherry Consulting & Case Team Lead

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Date last edited: 1/26/2021
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