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TikTok's advertising revenue of USD $12 billion makes short videos a lucrative business opportunity.
Source: | Author:QS | Published time: 2022-05-18 | 117 Views | Share:


A report from market research firm Insider Intelligence predicts that TikTok's advertising revenue will be tripled this year to nearly USD $12 billion, surpassing Twitter and Snapchat combined. The company is expected to surpass YouTube by 2024.


 


TikTok has more than a billion users and a vast audience, making it popular and influential. The company is also moving into e-commerce with the TikTok Shop, partnering with DoubleVerify, Shopify, and OpenSlate, which advertisers prefer.


 

On May 3, TikTok announced the launch of its latest advertising product, TikTok Pulse


Advertisers' ads appear in TikTok Pulse's "Recommended" content feeds around popular content that ranks among the top 4% of all videos on TikTok. According to Sandie Hawkins, general manager of TikTok's North America and global business solutions, advertisers will target the top 4% of trending content across 12 categories, such as fashion, cars, and gaming, using TikTok's ad manager. TikTok's brand safety filters and third-party verification tools provide a secured environment to advertisers to during advertising in TikTok.


TikTok, despite being a relatively young platform, has a long way to go in terms of gauging the effectiveness of advertisements and targeting users to generate revenue from advertisements. It is hoped that the app will enable performance-based marketers to link stickiness to actual sales, add more third-party vendors, and allow brands to reach consumers in new ways.


 


In parallel with this, Meta and YouTube introduced their respective short video products, Meta Reels and YouTube Shorts. As of yet, Reels and Shorts do not have enough viewers or creators to justify a significant amount of advertising. Since Apple's privacy overhaul, Facebook's advertising effectiveness has been severely hindered, causing many advertisers to shift their ad budgets to TikTok.


  


Over time, TikTok has gained popularity among Gen Z. The Insider Intelligence estimates that TikTok will have 37.3 million monthly Gen Z users by 2021, second only to Snapchat and ahead of Instagram's 33.3 million and Facebook's 28.7 million. In conclusion, the possibility of social platforms developing and expanding in the future cannot be ignored, considering their promising business prospects.


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