To say that it was a tough year for China’s ByteDance-owned short video platform TikTok would be an understatement.
The once highly popular app continues to face a ban in one of its largest markets, India, after serious border tensions between the two countries. Also accused by the American President Donald Trump’s administration of sharing user data with the Chinese government, TikTok’s ad business looked bleak in the past few months.
Big brands backed off on spending even as TikTok executives offered refunds to advertisers in the event the hot social media platform were to be banned from operating in the United States. But after it became clear Joe Biden had won November’s US presidential election, everything changed.
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“The interest in TikTok has exploded,” said Erica Patrick, vice president and director of social media at Mediahub Worldwide, which has worked with brands including Netflix and Twitch. She said she expects client spending to increase significantly over the next six months.
While the Biden administration pauses a government lawsuit filed by Trump officials, corporate sponsors have raced back to the popular short video sharing app, booking advertising campaigns and experimenting with new ways to reach consumers.
The clamor around national security and TikTok during the previous administration appears to have been “more of a stunt,” and has not been a serious concern for advertisers, Ms. Patrick said.
Mr. Trump’s defeat in the election was the turning point for many advertisers who were previously “on the fence” about TikTok, according to analysts. As business picks up, the platform has also approached major brands individually in an effort to address lingering concerns such as the placement of their ads, the buyer said.
Although TikTok’s US advertising business is estimated to be still small compared with larger social platforms, TikTok said it tracked a 500 percent increase in advertisers running campaigns in the United States over the course of 2020. It says it continuously has conversations with advertisers on brand safety.
As the app seeks to earn more money and capitalize on its large Gen Z audience, TikTok’s revenue ambitions have grown and now include selling high-end ad packages centered around holidays or major events.
The company has also asked brands for $1.5 million to sponsor a live finale event on February 26 featuring artist performances and special guest appearances, the slide deck showed.
eCommerce is also a growing priority, TikTok said in a statement, as the company aims to take on Facebook’s Instagram, which lets users buy products directly through the app.
TikTok said it is exploring letting users share affiliate product links on the app, which could allow influencers and TikTok to earn a commission from sales. Influencer marketing, already a major form of advertising on TikTok, is booming as more brands rush to pay top stars famous for their dance routines or comedy skits to promote products to their millions of fans.