TikTok offers cheaper ads in race against social media rivals Meta, YouTube and Twitter (report)
TikTok is offering digital advertising at a lower cost than its competitors as it tries to lure more advertisers and brands away from Meta, YouTube and Twitter amid slowing global ad spend.
Platforms like Twitter and Meta’s Facebook and Instagram is seeing a drop in ad spend as brands choose TikTok due to lower costs and better engagement, Financial Times report on Tuesday (January 10), citing advertisers, industry agencies and brands.
TikTok generates most of its revenue from advertising, and by 2021, the company is reported to have raked in nearly $4 billion in revenue.
The ByteDance-own app is predicted to end in 2022 with 1.8 billion monthly activities users from 1.2 billion by the end of 2021. In China, its home market, TikTok has more than 600 million daily users.
But with a slowdown in global ad spend, TikTok cut Its global revenue target for 2022 is 20%, or at least $2 billion, up from $12 billion to $14.5 billion FT reported in November.
YouTube is also not out of the recession when ad revenue Fall 1.9% in the third quarter to $7.07 billion, contributing to a 27% drop in Alphabet’s total revenue in the third quarter. Twitter, now owned by Elon Musk,
To overcome the slowdown, TikTok is said to have increased its advertising offering for brands.
New York-based media company VaynerMedia notes that getting 1,000 impressions from a video ad on TikTok costs almost half the price of Instagram Reels and a third less than Twitter and 62 less. % of ads on Snapchat. FT most recent report.
As a result, the top 1,000 US advertisers alone increased their spending on TikTok by 66% to $467 million between September and October 2022, the newspaper added, citing data from market intelligence firm Pathmatics.
“A lot of our brand partners. . . used to be 100% Instagram,” Permele Doyle, founder and president of creative agency Billion Dollar Boy, is quoted by FT with that said, adding: “It’s 2023 now, we’ll see 80 or 100% TikTok.”
Market research firm Insider Intelligence recently noted that Meta and Alphabet are lose dominion via digital advertising in the US from competitors TikTok, AmazonMicrosoft and Apple.
The company also guess that TikTok will soon beat YouTube in watch time, although don’t expect TikTok to pass Netflixviewing time anytime soon.
TikTok’s social media buyer penetration is also growing rapidly in the US, outpacing Pinterest. According to Insider Intelligence, by the end of 2023 it is expected to beat Instagram and tie in with Facebook.
“There is a huge opportunity for brands to create incredible ads on TikTok, no matter the budget,” Kris Boger, general manager of global business solutions at TikTok, is quoted by FT like saying.
Inside Intelligence estimate global ad spend in 2023 will increase 10.5% year-on-year to $626.86 billion from $567.49 billion. This number is expected to skyrocket to $835.82 billion by 2026.
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