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Why TikTok Is the Next Big Thing for E-Commerce

If you haven’t heard of TikTok before, then you’re not alone. With the vast majority of its users under the age of 30, it’s a smartphone app that makes even millennials feel old. But, it’s really only a matter of time before this new video platform appears on your radar.

The Chinese-owned app by ByteDance is best known for its lip-syncing videos and crazy dance routines. It currently has 500 million users and was the world’s fourth most downloaded app in 2018, beating Instagram and Snapchat. 

Lip-Sync and Dance with TikTok 

TikTok videos last up to 15 seconds, where users lip-sync duets with friends, creating a split-screen page on their phones. There are songs and comedy memes ready for users to mimic, which goes back to the app’s origins as a ‘sing-a-long’ app by Musical.ly, bought by ByteDance in 2017 for $1 billion.

Music is TikTok’s DNA, and its users can post videos with background tunes from popular acts like Taylor Swift, Stormzy, or Billie Eilish. Its emphasis on music has given TikTok an edge over Instagram and Snapchat and has cut through with younger audiences. 

All of this makes TikTok incredibly entertaining and explains its phenomenal download rate among 16 to 24-year-olds.

Why TikTok Matters 

tiktok screenshots
TikTok users participating in #thatlookisbonfire trending hashtag (left), finger dancing (middle), and #changestartswithus challenge | @marniedoesmakeup/TikTok; @havy_0809/TikTok; @danieldelkiffin/TikTok

TikTok was the most downloaded social media app in the world in September 2019, with close to 60 million installs. Facebook CEO Mark Zuckerberg looks upon the app as a serious rival, curiously describing it as an “interesting phenomenon” in a recently leaked audio. The Chinese-owned app — where it is known as Duoyin — is also reportedly being investigated as a potential national security risk by the US government over concerns about how it stores personal data.

Any social media platform that has half-a-billion users is going to attract attention from media giants and governments. As a breakthrough app, it’s already caught the eye of businesses looking to market their products to new audiences. By creating content on TikTok and collaborating with users, entrepreneurs can gain invaluable insights into Generation Z and stay at the forefront of digital trends.

Remember, Facebook was a disruptive game-changer back in 2005, and they also had a teen and young adult audience, and it changed the world as we know it.  

When it comes to e-commerce, it’s whoever adapts best to change that wins. Is that going to be your business?

How Does TikTok Work?

TikTok videos usually involve music, dancing, or people acting out meme scenes from movies. Every user can record and upload one-off videos of up to 15 seconds or looping ones of 30 seconds. Like other social media platforms, such as Instagram or Snapchat, it’s the most talented and entertaining users who gain the most followers and become micro-celebrities in their own right.

Like Instagram and Snapchat, user videos are made available to both followers and strangers. TikTok’s default setting is public, but users can restrict uploads to an approved list of contacts if they wish.

TikTok analyzes the videos users watch and instantaneously suggests other clips, to keep them hooked on the platform. Users can also search for specific topics by clicking on hashtags.

Who Uses TikTok?

Around 40% of TikTok users are between 16-24, and according to 2018 data, it’s slightly more popular with male users. Many of them, however, don’t necessarily use the platform to post videos themselves but prefer watching other people sing or dance. An estimated 55.6 percent of users are male, and 44.4 percent of users are female across all age groups. 

Why Should You Advertise on TikTok?

TikTok is growing at an incredible rate, with the app available to download in 155 countries and available in 75 languages. An average TikTok user spends an average of 52 minutes per day on the app, either creating, sharing, or watching videos, with 90% using it every day. 

If you want to engage with the consumers of tomorrow, then businesses have an opportunity to convert with new and enthusiastic audiences on TikTok.

Like Instagram “influencers”, you can partner up with a TikTok “creator” who will help humanize your brand. With these sponsored posts, you can have millions of eyeballs watching them, ensuring your business gets maximum exposure.  

TikTok is currently not as glitzy or smooth as Facebook or Instagram adverts, but that’s part of its offbeat charm. The low barrier for entry allows smaller businesses to take risks and experiment with exciting video content. 

How Can You Advertise on TikTok?

tiktok screenshots
In-feed video ads with #sponsored hashtags appear in TikTok users’ feeds  | @blondiemuser/TikTok; @the_regulators_again/TikTok; @cosette/TikTok

All video ads on TikTok currently require you to go through an ad representative. They have multiple ad formats to choose from including:

  • Hashtag Challenge
  • Biddable Ads
  • Brand Takeover
  • Branded Lenses

Hashtag Challenge

TikTok’s hashtag challenge is a user-generated content (UGC) game that encourages users to share content with their followers using a sponsored hashtag.

It allows users to shop for products associated with the hashtag without them leaving the app. It often involves a “creator” with millions of followers showing off a new coat or a pair of shoes or lip-syncing a song from a movie. 

A new separate tab provides an in-app experience where the products from the hashtag campaign are available to buy.

Ad Case Study 

Kroger, a US grocery store, is the first company on TikTok to try out the hashtag feature with their #TransformUrDorm challenge. Users were asked to post videos of their college dorm in a ‘before and after’ capacity. They were then invited to buy products such as a toaster or popcorn maker through a unique Kroger page on the app. 

Kroger hired four TikTok creators — Mia Finney, Cosette Rinab, Joey Klaasen, and Victoria Bachlet — to post videos using the #TransformUrDorm hashtag, in partnership with the digital marketing agency 360i.

The store’s sponsored hashtag now has over 447 million views across hundreds of different user videos.

Biddable Ads

There is currently only one ad unit available on TikTok: the in-stream video. It introduces itself to users when people scroll through their feed, which you expect on a platform full of 15-second videos. The in-stream video format allows the ads to flow through people’s feeds without disrupting their user experience. 

There are three advertising models available for biddable ads.  

  • Cost Per View (CPV): Cost per view model requires advertisers to pay when users view their ad. It’s limited to a six-second time frame. 
  • Cost Per Impression (CPM): This model requires advertisers to pay when their ads appear in a user’s TikTok feed.
  • Cost Per Click (CPC): Advertisers only pay when the user clicks on their ad.

TikTok’s biddable ad targeting options allow you to include and exclude users by:

  • Age
  • Gender
  • Location

Brand Takeover

A brand takeover takes place when a user opens the app and an ad appears, “taking over” the opening screen. Once it’s opened, the advert takes TikTok users to another place, whether it’s a TikTok user page or an external web link. Brand takeover ads are limited to one advertiser per day right now.

Branded Lenses

Like the alternative reality (AR) filters on Instagram and Snapchat, TikTok’s branded lenses allow users to tell stories using 3D stickers and face-altering filters. AR lenses encourage mass levels of engagement, with millions tuning to see how popular users transform their hairstyle or makeup. 

How To Use TikTok to Promote Your Business

TikTok is a zany and unpredictable platform, so to make your ad work, you have to show your funny side. Kids using the video app are far more likely to engage with authentic content than a slick, polished ad.

Take Risks Making Your Ad

You don’t need to be shy on TikTok and can risk your ad failing as the platform is still in its infancy. By taking creative liberties, you might hit the jackpot trying something you wouldn’t dream of doing on Facebook or Instagram, which have higher risks of exposure.

Engage with Everyone

tiktok screenshot

Even if your user base is tiny, make sure you reply to everyone on TikTok. Why not take part in user challenges or engage with lip-syncing duets? You are the product. You feeling something is what works on TikTok. 

With these new video-apps, the relationship between advertisers and users is merging ever closer, and if you’re successful, you will have made an invaluable connection with a new audience. While TikTok ad opportunities are currently not as comprehensive as Facebook or Instagram, its sponsored hashtag challenges, in particular, have enormous potential. 

Spend a day scrolling through the highly addictive app, and you’ll be hooked, with an entire stream of weird and wonderful videos at your fingertips. There is nowhere on the Internet quite like it. So if you want to master the next big thing and steal a march on your competitors, then TikTok is where it’s at.

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Daniel Agnew

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