Future of Work News

Small Businesses Continue Pursuit of TikTok Ads, Driving Considerable Profits


A lot transpired in 2016. A presidential election altered the nature of political discourse and led to the contentious politicization of innumerable talking points. Public attention was unfortunately renewed in the Syrian refugee crisis, the 2016 Summer Olympics in Rio de Janeiro took place, the Chicago Cubs finally clinched a World Series victory, and millions of smartphone users flocked to sensation-overnight apps like Pokémon Go. It’s a condensed list, to be sure; there were many, many highs and lows (and that was four years prior to a global pandemic, of all things).

But in May of 2016, an app called Musical.ly also debuted and became popular with a music-obsessed youth. Not everyone knew of it, but it certainly made its mark. Then two months later, Musical.ly introduced Live.ly for livestreaming. This may not seem as ultra-significant as other 2016 events, but it’s still a trail of falling dominos worth a quick revisit, as it opened a window of opportunity. Soon, a Chinese company by the name of Bytedance developed an app named Douyin (which gained 100 million users viewing more than 1 billion videos per day). Eventually, Bytedance opted to purchase Musical.ly, consolidated everything into a single app, and rebranded it into what we now know as TikTok.

Fast-forward to 2023, and the TikTok takeover redefined content creation. It may one day even be a mainstream outlet in its own right. Its irrefutable boom sparked a cultural flame and spurred usage from both lesser-known and widely-lauded creators alike, plus global celebrities, teachers, doctors, sports teams, you name it.

And undoubtedly under that you-name-it umbrella: Businesses.

In 2021, TikTok generated an estimated $4.6 billion in revenue (a 142% year-on-year increase), which makes sense given the app has been downloaded more than three billion total times. And according to Capterra’s TikTok Marketing Survey, 78% of small businesses specifically took note of TikTok’s hype and still use its ads to drive profits. TikTok marketing, especially with Gen Z consumers, creates must-grab value. Across sectors, businesses have already yielded positive ROIs, with or without having a brand “go viral” on the app.

Molly Burke, a senior retail analyst at Capterra, worded it smartly: TikTok helps mitigate a sense of choice paralysis by giving users immersive, vertical videos that can instantly take them inside of a business.

“Users like TikTok because it’s a seemingly endless scroll of content that feels authentic and unfussy,” Burke said. “They see videos made by real people, for real people. TikTok content helps business blend in and profit with the creation of ads that capture that kind of candid content flow.”

“And while other platforms' content suggestion algorithms can feel like an oligarchy dominated by legacy brands and Hollywood celebrities,” Burke continued, “TikTok’s ‘For You’ page has been characterized as a meritocracy where small businesses can reap rewards from both paid and organic content.”

So, with TikTok’s rise, will there ever be a the-greater-they-are-the-harder-they-fall kind of moment? The previous presidential administration once looked to ban the app on a national scale. (That didn’t come to pass.) More recently, according to The Washington Post, nearly two dozen states over a five-week stretch have imposed TikTok restrictions. There’s also the danger of impressionable users consuming TikTok videos concerning mental health and improperly self-diagnosing, as well as more strategic and intentional abuses of the app. (Though TikTok is not alone here; platforms like Snapchat have also come under similar fire.)

For now, though, TikTok reigns as users (myself included) may swipe freely from a video featuring darling kittens, to a former worker’s PSA about goings-on at a department store, to a skydiver’s point-of-view plunge from the heavens, and then inevitably back to kittens. But also tossed into that TikTok melting-pot mix are definitely businesses looking to reel in users, and so far things still look very promising for those doing so.

Edited by Greg Tavarez

Future of Work Contributor

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