In this opinion piece, Alpha Digital’s head of performance Amir Rezaee outlines the impact to brands of a potential banning of TikTok in Australia
The six weeks or so since TikTok announced its local Australian office has been a busy period. Aiming to make a similar impression on SMBs as it has on its 1.6m Aussie users, the video platform confirmed a $100m pot in advertising credit – an intriguing proposition for those that haven’t marketed on the platform before.
Alongside these enticing headlines, have followed more concerning ones for marketers as politicians have called to ban the platform. At a time when there’s so much attention on distancing, a perceived lack thereof between Beijing and parent company ByteDance has raised security worries for international governments.
India was the first to take action by banning the platform across a whole country, with Pakistan rumoured to soon follow. The most senior officials in the US have claimed the relationship between the social media platform and CCP are too strong, as it looks to escalate its trade dispute with the country.
Here is Aus, an MP has voiced similar concerns, but I’ll leave others to analyse the validity of politicised data-sharing concerns. An ever evolving discussion, to which Microsoft has now thrown its hat into the ring, after apparent conversations with the President.
However, I’d like to look at the impact which the platform has made in this country and focus on the potential impact to brands were any removal from the App/Play stores to actually take place.
Hashtag challenges have created a foundation for significant user generated content for brands. DSW’s debut hashtag challenge generated over 1.3 billion views. Unlike other platforms, TikTok has created a perfect formula for brands where users create UGC exclusively through hashtag challenges. From a brand’s investment perspective, delivering a few prizes is potentially very low compared with paid advertising campaigns on a social platform.
The reward is there for brands that are able to optimise their content and show a bit more personality. TikTok taps into an audience which other traditional channels often struggle to access, with over two-thirds of users under 30. And the appetite across sectors is there from brands with everyone from AFL, through to Optus and even Suncorp launching campaigns this year.
US users were already set to grow 21 per cent this year, but with social distancing expected to last, people have sought connection through new digital avenues.
Stick or twist
Advertising on TikTok is auction-based. This means expense will fluctuate with demand. Right now the platform is providing so much value in advertising credits it reduces the risk of trialling it. Eligible small business customers can receive $300USD, and if advertisers spend their own cash, up to $2K of it will be matched. While it’s a nice incentive, I doubt it will be sustainable.
To mitigate risk, brands should reuse existing assets from platforms like Facebook and Instagram. The unique ‘hashtag challenge’ sponsorship does come with its own risk, as brands will need to consider the safety aspect of aligning with potentially controversial user generated material.
It may be early to divert spend long term away from platforms that have worked, especially without more positive brand impact case studies, however it would be worth taking advantage of the support TikTok is introducing in pilot tests.
Even with the uncertainty, we’ve advised brands with an existing presence on TikTok to continue investing into the platform if their efforts are performing and hitting business objectives. It does feel that brand managers are monitoring social platforms more closely for their actions post-Cambridge Analytica. Just look at the recent advertising boycott on Facebook for evidence of this.
If the king were to die
Should authorities deem the Chinese relationship untenable, it’s worth looking at what’s happened in India where TikTok has already been banned. Within a week we saw Instagram roll out its Reels feature, replicating a lot of the same functionality in short video formats.
The Silicon Valley giant has a history of ensuring users want for nothing when it comes to social features, as Snapchat can attest. But whether there will be a drop off from those Gen Z users wanting the latest new craze, remains unclear, although Instagram’s proportion of 16-24-year-old users is already 10 per cent less than TikTok.
Brands that have already invested a lot in the platform can take the learnings from it and translate some of the lessons. However, the prestige of being associated with a transient and spontaneous platform like TikTok, won’t carry over. Existing brands need to keep a close eye on the volatility of CPM as brands decide to either jump ship or jump on the platform. It’s created a new and different way to get their message across and many have capitalised on the challenge.
For me it will be interesting to see how the measurement of effectiveness matures, providing we still have access this time next month. These metrics are more established on the likes of Instagram, so any shift in users to that platform will soften the absence of any disruptor.
TikTok ads make sense if you have a product or service where teens help drive purchasing decisions. When it comes to marketing you don’t need to try each and every platform simply because they are offering services. You need to understand the need of the platform. Understand your audience. Know where they are coming online regularly. That methodology will continuously have you prepared for whatever platform comes today, tomorrow, next month and next year.
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