TikTok - a new era

ROI is one of the key metrics that advertisers are always interested in. Recently, a survey conducted in Feb 2020 revealed that TikTok has emerged as one of the top platforms for advertising ROI, joining the likes of Google and Facebook. It saw ad spending explode 75X from May to November 2019, on the back of a growth of 614 million users. Chipotle did a US advertising campaign on TikTok in October 2019 where it promoted burritos with a hashtag #boorito. The hashtag had 3.9 billion views! Now of course that number is absurdly high, 50% of world population! So it’s clear that the way TikTok classifies a ‘view’ is unclear. But even so, these insane numbers are attracting tons of brands and their pockets. There are multiple unique features in TikTok which could be impediments to successful marketing campaigns, and that brands need to consider. Firstly, according to influencer analysis firm Captiv8, 69% of TikTok users are age 14 to 26, a target market that a) demands a very different approach than other demographics, and b) makes TikTok useful for only certain brands and products that target this age group. Using influencers on TikTok is even more challenging given the current age demographic. Charli D’Amelio, one of the most popular people on TikTok, has 32 million+ followers, and is only 15 years old! Now of course with growing popularity of the app, we could see a shift towards older population. Secondly, 75% of this age group does not make the purchase decision themselves, but rather has a more senior family member make the purchase decision. So marketing directly to them may not yield expected results. Thirdly, the format of the video is very different. It requires skits that can play vertically on phones, so the same video used for Facebook or YouTube can’t be run. Even so, it’ll be very interesting to see the unfolding of TikTok, a Chinese company, as a primary advertising platform, giving competition to US-based leaders - Instagram, Google, Facebook.