TikTok was able to do what “Ello”, “Peach”, “Vero”, and “October” failed miserably at: Creating an alternate to Instagram and Facebook! However, could TikTok -the music video focused app which enables users to post short clips – mostly dancing or lip-synching – and share them with friends- be hiding something beneath its quirky façade?

Our little birds tell us that TikTok is attracting ad spend for those looking to connect with younger markets. And why not? Being the platform for the moment, TikTok has now been downloaded over a billion times, with 663 million of those downloads coming in 2018. It has amassed a cult following, particularly in the US market, where it now boasts over 26 million monthly active users, who are spending 46 minutes per day on average in the app. And Brands are noticing!  

If you weren’t listening before, heed the stats now before you lose the early bird advantage. Believe it or not, the whimsical app is looking out to become a treasure trove for marketers. Here’s why we believe so:

Covertly Testing the Water with Biddable Advertising

Rumors have it that TikTok has quietly introduced an ad unit. The app-install ad from food delivery company GrubHub set the precedence for many to come. Chris Harihar, a TikTok user and partner at Crenshaw Communications, saw the ad shortly after launching the app. A button at the top right of the screen lets the users skip the ad instantly, as seen in the screenshot.

TikTok has confided in agency partners in the U.S. its plans of introducing a biddable advertising option on the platform, a hint that it is looking to tap into advertisers and their digital dollars.

By biddable, we mean a self-managed platform where advertisers will be able to bid against one another for the ad impressions they want. The option is projected to be launched sometime this summer, though exact date has yet to be announced. Not to mention, this biddable platform would come equipped with state-of-the-art targeting methods and better measurement tools. But more on that in a while.

For now, TikTok offers direct IO buys to advertisers, where advertisers work with the platform directly to place and buy ads. TikTok has started tinkering with ads earlier this year with four different ad formats designed for advertisers, including branded lenses that users could use in their own videos, banner ads encouraging TikTok users to participate in brand-designed video challenges, brand takeover ads that popped up when a user first opens the app, and in-feed video ads.

In-feed video ads like these have appeared in TikTok users’ feeds this month:

Native Video Ads

TikTok is hiding another secret up its sleeve: native video Ads. These videos direct users of the video-sharing app to an advertiser’s website. A Twitter user observed the native ad in a video clip with a “Sponsored” label from retailer Specialized Bikes and a blue “Learn More” button to tap.

Upon clicking, the ad opened the Specialized Bikes (@specializedbikes) profile page within the TikTok app.

Have you noticed that the profile page sports a few new features, in what we presume to be a tweaked version of the verified account badge?

The “Specialized Bikes Page” beneath the @specializedbikes username bears a blue checkmark, which makes it look like an account that has been verified in some way. TikTok profiles don’t normally look like this. Never have we ever seen a blue check-marked profile. See how the pop-up banner overlay at the bottom of the page prompts users to “Go to Website” or “learn more”. However, the buttons don’t always work, and the glitches indicate this video ad unit is still very much in the process of being tested. Fingers crossed; we are going to see a crazy ad war on TikTok as well. Before, you lose the early bird advantage, crouch over and wait to pounce!

Subtly Scouring the Edges of AD Targeting

Looking to strike while the iron’s hot, TikTok doesn’t want to be left behind in the race for targeting. The trending video app has recently started pitching advertisers on its spectacular interest-based ad targeting option to enable brands to reach out to specific subsets of TikTok’s young audience demographic, in order to make the most of the performance of their promotions. In the wake of other social media platforms, TikTok is also getting their feet wet with pixel tracking and interest-based targeting, in addition to targeting by network and operating system on the device, location, gender, and age. According to our sources, the short-form video app plans to release a beta version of its self-serve ad platform in mid-July.

TikTok leverages user engagement and video image recognition as cues to aid in categorizing audience interest. Concurrently, it is also capitalizing on pixel-type tracking for more specific data options, further augmenting its categorization capacity. What we see TikTok doing is working along the edges of  Snapchat’s ‘Lifestyle Categories‘, which groups users into more honed in sets, such as ‘Movie Theater Goers’, ‘Football fans’ and ‘Automotive Enthusiasts’.

This is another major feat in TikTok’s quest for cosmic expansion. What was a mere fable in the Western markets until last year has seen over a billion downloads!  The recent move better positions TikTok as an effective buy rather than simply a “trinket” that continued to lure marketers due to its young audience with high engagement!

As per our sources, currently TikTok’s content algorithm is also fueled by a similar recommendation system. The app is capable of recognizing content in a video, such as a coffee cup, a child, or a cat, which is useful not only for feed recommendations but also for powering the advertising system as well. As opposed to Snapchat, TikTok users can like and comment on videos, which provides ample data for content recommendations, as seen on YouTube, Twitter and Facebook.

Even with the limited targeting options, brands are testing the waters by buying ads on TikTok. GrubHub, one of the earliest advertisers on TikTok, asserts that TikTok’s ad performance has exceeded their expectations. Other marketers like Sony and Redbull are also getting their feet wet by creating their own accounts. Publishers such as NBC news and ESPN have  also created their own accounts. Our personal favorite is a video montage of basketball players getting hit by imaginary Pokéballs on ESPN!

“We can reach a younger target group via creative storytelling with TikTok, from which we are seeing high interaction rates,” reported Felix Loesner, head of social media at Bayern Munich, which launched its profile on the app earlier this month. Since the launch, the page has gained 75,000 fans from 11 posts. Those posts have attracted 400 likes and have been viewed over 4 million times.

Will Marketers Unlock the hidden Potential of TikTok?

The app’s popularity stems from the fact that users feel it belongs to them; they own it. Promotional content will get ripped to pieces. This is where brands have to walk over glass. Brands will be more engaging if they embrace the participatory challenge-based nature of TikTok and stick to user-generated content.

For instance, slush brand Starslush wanted to raise awareness of its products and create desirability among a Gen Z audience. With the help of an influencer called ‘Sherice’, they created two challenges as part of a low-budget drive: ‘Slushface’ and ‘Slushjump‘. Together they garnered over 50,000 views, and a bevy of user-generated content flocked in. TikTok has leveraged the market created by Snapchat for short-form video, driving great results via influencers in terms of generating engagement with Gen Z’s and raising brand awareness. Even though influencer marketing is not that popular on this platform yet, we are sure it will be once more people get to know its power.

TikTok features some really interesting content with individual people doing sped up lip syncing for vocal work. Brands mastering the art of such native and engaging content, will win the ad war. You can’t just repackage something from Facebook or Insta and make it work on TikTok!

Whether the app is relevant for your business or not obviously comes down to your target audience – but given the resonance and popularity of the app, it’s worth experimenting with TikTok’s ad options to see what magic it will conjure up.

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