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TikTok’s influence is growing. What do brands need to know?

TikTok has found a firm home in the world of social media advertising. Online users are turning to TikTok more and more, and as a result, it seems that advertisers are not only investing in the platform but increasing spend. A WARC report found that TikTok ad revenue will rise 53% to reach a forecasted £15.2bn in 2023.

This is even more pertinent when you consider that digital ad market growth overall is slowing. TikTok is the only platform to defy this trend, and this is despite there being some big question marks over its use of data. In recent months, lawmakers in the US, Europe and Canada have escalated efforts to restrict access to TikTok, citing security threats.

The fact that this hasn’t turned marketers off shows the power of the app. It is difficult to ignore or argue against its reach and engagement attributes. According to Wavemaker data, in the UK, people spend 90 minutes a day on TikTok. To put this into perspective, Instagram is used for 29 minutes daily. This is an entertaining app, and several hours can easily pass by when jumping on for a ‘quick’ scroll (for reference, people open the app over 21 times a day on average).

Many benefits of TikTok, such as its ad formats (e.g. Top View, Brand Takeover, Brand Effects), have been discussed at length and are creating significant results for brands like Netflix, Nike, McDonald’s, and Duolingo. The latter regularly amasses a million views on videos it posts. And it’s not just virality: it also positively impacts the bottom line. TikTok drives positive paid media ROAS and offline sales efficiency when compared with all other digital media.

It’s no wonder that TikTok is building momentum. Moreover, the success of TikTok is having an impact on the overall tone and style of paid social campaigns as well as formats on social media platforms. For example, YouTube just added six new creation tools to Shorts that directly mimic much of TikTok’s functionality.

For brands, taking stock of – and understanding – the new features and opportunities available will not only pay dividends on TikTok but will likely inform other paid search strategies moving forward. So, where to start?

Focused Views: The smart way to stretch ad dollars

‘Focused Views’ allow brands to optimise ad spend and drive deeper engagement. With Focused Views, advertisers now only pay if the user has voluntarily watched the ad for or engaged with it within a certain time frame (previously, the campaign type only supported six seconds; now, it includes 15 seconds).

Focused View capitalises on what TikTok’s platform has gained so far: customers’ undivided attention, which naturally increases the ad’s memorability and drives top-of-mind brand recall. It’s also beneficial for more effectively measuring engagement too, since it shows how many viewers are actually invested in the ad content.

Finger on the Pulse: Bringing brands closer to community and entertainment

TikTok Pulse offers brands the opportunity to place their content alongside the top 4% of all TikToks, while also creating a new revenue stream for TikTok creators. This means more exposure for brands and an increased incentive for creators to make content that hits the top of the pile.

Brands can choose specific categories for their ads, like cooking, fashion, gaming and beauty. As a result, brands can engage with the communities most relevant to them. Pulse changes the game for contextually aligned ad placements on TikTok.

Searching for brand gold on TikTok is becoming its own search engine

During a conversation at Fortune’s Brainstorm Tech Conference last year, a Google Senior VP said that around 40% of young people head to TikTok ahead of apps such as Google Search or Maps. TikTok is the new search engine, specifically for Gen Z, who are using it to find out how to do things and where to find things. Best local restaurant? New holiday destinations? How to write a CV? How to DIY that now-famous IKEA coffee table? TikTok has it covered.

This means a big opportunity for brands that can ‘respond’ to what customers want. For example, if a customer searches for “What TV show to watch”, the benefit of Sky TV having an ad for The Last of Us listed is clear. Indeed, the volumes may not be as big as, say, a banner ad on the Discover page. However, in terms of serving highly relevant and appropriate creative in a way that feels incredibly authentic, it’s a huge brand opportunity.

Video Shopping Ads: The future of online commerce

In a recent study, TikTok revealed that 56% of users say ads on TikTok lead them to discover new products or brands. The company also notes that 48% of users are interested in purchasing on or through TikTok in the next three months. In addition, TikTok notes that 70% of users say it seems easy to purchase through the TikTok shopping-related ads they saw.

In part, the latter is thanks to Video Shopping Ads, ultimately an on-brand spin for TikTok. It meshes purchasing with content creation by allowing advertisers to highlight one or more products in their in-feed video ads and automatically create a landing page for them. For brands, Video Shopping ads can harness TikTok’s community with paid media to drive e-commerce and convert demand into sales.

Ultimately, TikTok offers many opportunities to make sales, drive traffic to a brand’s website, and reach new audiences. It is a game of always on relevance. While that includes trends and communities, it also means keeping on top of the latest ad features and functions to ensure brands are generating the most impact. These four opportunities are a great place to start.

Article originally published in WARC.

Nathan O’Connor
Head of Paid Social

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