The Information reports that US advertising agency Horizon Media will triple its spending on TikTok this year to 5% of its roughly $2bn social media ad budget, and TikTok’s share of the budget will double to 10% in 2023. At another ad agency, Mekanism, spending on TikTok has gone from zero a few years ago to roughly as high as 10% to 25% of social ad spending for some clients now.
These and other agencies are signaling a major shift as brands start to embrace advertising on TikTok, ByteDance’s wildly popular video-sharing app. The Information says: “While still in its early days of growth, that trend poses a threat to… Facebook and Instagram as well as Snapchat.”
A recent survey showed marketers expect to reallocate more digital ad dollars to TikTok as well as YouTube and Amazon, with TikTok’s share growing to 6% in 2023 from 4% last year and Facebook, Instagram and Snapchat losing share as a result – although spending on Facebook is still very large: At Horizon Media, for instance, Facebook still accounts for 50% of the social ad budget.
The TikTok app was the most popular online destination in the world in 2021, outranking even Google. Local Chinese sources reportedthat TikTok planned to boost ad sales to $12bn in 2022 from $4 bn in 2021. By comparison, Meta Platforms (owner of Facebook, Instagram and WhatsApp) generated more than $100bn from ad sales in 2021, and YouTube about $30bn in 2021.
The Information says: “What also draws advertisers to TikTok is the app’s younger-skewing audience, which includes teenagers and 20-somethings who spend hours scrolling through videos on the mobile app. TikTok’s growth has led established rivals including Facebook and YouTube to create similar short-form–video features.”
