TikTok — the short video app that serves you everything from strange crate-based challenges to faked videos of the war in Ukraine — is quickly becoming a cash cow, according to a new report.
The platform’s global ad revenue is expected to triple by the end of this year, netting the company a projected $US11.6 ($16) billion, outpacing Twitter — $US5.58 ($8) billion and Snap Inc — $US4.86 ($7) billion. A majority of the earnings — a whopping $US6 ($8) billion — is will come from U.S. advertisers alone, the analysis from the analytics firm Insider Intelligence predicted.
On one hand, it makes perfect sense that advertisers would be pouring the big bucks into TikTok. In 2022, every major brand wants a piece of the multi-billion dollar Gen-Z market; and when those teens and tweens are hanging out on a certain platform — like, say, TikTok — advertisers are going to pump their money and messaging into that platform, ethical issues be damned. On the other hand, some of those major brands have historically been gun-shy about dumping dollars onto a platform that’s been a lightning rod of political and cultural controversies.
What these new ad numbers say, in a way, is that advertisers have largely agreed to look past the dangerous viral challenges that run rampant on the platform, its potential national security risks, and any other scandal that’s rocked TikTok in recent memory — all for the sake of cornering the teenage market.
And TikTok’s shown itself to be more than willing to offer new avenues to target those teens across the platform. In 2022 alone, the company’s confirmed that it’s beta-testing crypto ads and ads in its search results, on top of the Shopping, Feed, and AR-based ads that the company already offered towards the end of last year. The company will likely continue to cram more ad placements into every corner of its app in an attempt to compete with the current kings of online ad revenue: Meta, Alphabet and Amazon. Altogether, those three swallowed nearly three-quarters of all the dollars spent on digital ads last year, according to another recent Insider Intelligence report. TikTok’s $US11.6 ($16) billion in earnings sounds impressive enough on its own, but when ads across YouTube, Google Search, and every other Alphabet property pulled in $US218 ($303) billion in the last year alone, it’s pretty clear that TikTok has some catching up to do.
From the looks of this new analyst report, it looks like that catching up may happen sooner than we might expect. In the meantime, competitors continue to rip off its best features to try and coax those ad dollars away, while TikTok continues to ape those competitor’s tendency towards drowning its users in ads.