Tik Tok’s Impact on Brands

Tik Tok, a four-year-old social platform, has been the center of conversation. The video sharing app grew in popularity amongst the Gen Z demographic and was investigated in the US over national security concerns. Despite various controversies around its ownership, security policies, and growth efforts, they’re working hard to prove they’re trustworthy.

The Tik Tok platform first launched in China by start-up, ByteDance, under the name Douyin. ByteDance then bought out the popular, American lip-syncing platform, Musical.ly, and merged the apps together to make the Westernized TikTok platform we know today.

The mobile app allows users to create a short 15–60 second video of themselves which often feature music in the background, can be sped up, slowed down or edited with a filter. Think back to Vine days when people previously lip synced to music and engage in funny challenges. It’s the same concept but built with more editing features with a bigger global network. They even have options to connect to other social platforms or collaborate with other users to increase further engagement. The abundance of features on the app results in 86% of users successfully creating and posting which keeps the app with new content consistently.

All the banning noise worried many Tik Tok users last month as Oracle and Walmart raced to settle on a deal that would allow the popular app to remain active for the 100 million users in the United States. If the deal were to fall under, retail businesses, influencers, and small brands who garnered a massive fan base will all suffer since this app has become an essential marketing tactic for driving brand awareness at a low cost. If Oracle manages the market effectively, they can produce a 200 million-dollar market.

According to the Wallaroo Media, Tik Tok has about 850 million monthly active users and spend an average of 52 minutes per day on the platform. Although Instagram is still 10x larger in users and revenue, the app is growing rapidly. Its user base, also known as the post-millennials, Gen Zers are expected to shake up the retail industry. Yes, they’re considered the young spenders, however they’re tech savvy. Businesses are looking forward to the future as they set their eyes on this green market and Tik Tok is the perfect platform to invest in.

Let’s talk about marketing at nearly zero cost and all creativity. As we move into a time where video as a marketing tool is prioritized for its effectiveness to convert to sales, Wyzowl State of Video Marketing reports that video effectiveness will increase 85% by 2022. Don’t get me wrong, there are brands that spend a good penny to partner with influencers that have a heavy following. There are also brands like Chipotle, a well-known Mexican restaurant chain, who publishes a variety of 15–60 second posts that use music, memes, and other quirky references that highlight their menu items. It’s popular videos even started a “Guac Challenge” which ultimately helped spread brand awareness quickly. Instagram recognizes Tik Tok’s increasing growth rate and as a response they quickly released “reels” which basically have the same video editing capabilities. Unfortunately, it may be a difficult task for Instagram to compete because what really makes Tik Tok attractive is their recommendation algorithm which is hard to replicate.

While there is no magic recipe to gain followers, the mysterious algorithm improves the chances of a video to go viral. To add to its commitment for transparency, Tik Tok released a statement into their framework.

Here’s a preview and a link to their press release on “ how Tik Tok recommends videos #for you.”

1. User Interaction

Much like other social media platforms, Tik Tok’s algorithm recommends users posts they most engage with which includes likes and shares most often.

2. Video Information

This includes details like captions, sound, and hashtags.

3. Account or device setting

This includes your language preference, country setting, and device type.

After researching and understanding the data sent back to its servers, it doesn’t seem the information captured is any different from what any other social media app would capture, nor does the data captured pose a threat to US national security. The current “threat” seems to be primarily connected with its Chinese ownership and worsening relationship between US and China. Here is an article detailing the encrypted logs by Elliot Alderson.

As markets move online due to the pandemic, brands will be looking into platforms that will help drive online traffic. They need extensive digital marketing that will bring their products to life. Brands are still spending more ad money on Instagram, but I see the tide shifting within the next 2–3 years to the Tik Tok platform. Not only does Tik Tok offer more global exposure, Gen Zers are the generation to tailor ads to as they mature and the Millennials buying power decreases.

Because of their increased screen time, Gen Zers are greatly impacted by social media in their shopping. It is clear Tik Tok will dominate the ad targeted audience in the coming years thanks to its new partnership with Oracle and Walmart. Today, 60% of users are Gen Zers who are trendsetters. Next year, 74 million people in the US will be part of Gen Z, which will make it the largest generation group in the country.