The Truth About TikTok Videos

In recent years, advertisers have been on a quest to find the digital equivalent of home shopping channels, a platform where users actively engage with ads instead of mindlessly scrolling past them. TikTok, with its more than 1 billion users and a powerful algorithm that seamlessly integrates ads into user-generated content, has emerged as the answer to this marketing conundrum. This article explores how TikTok has become a playground for brands, enabling them to create authentic-seeming advertisements that resonate with users, especially the coveted Generation Z and millennial demographics.

The Rise of TikTok Advertising

TikTok's journey from a platform primarily for creative videos to a marketing juggernaut has been nothing short of remarkable. Just a year ago, this level of advertising presence on TikTok would have been unthinkable. Back then, former U.S. President Donald J. Trump threatened to ban TikTok due to concerns about its Chinese parent company, and advertisers were still trying to decipher how best to connect with its user base.

However, the tide changed when President Biden revoked the executive order in June, and TikTok surged past the monumental milestone of one billion monthly users in September. This surge in popularity made TikTok an undeniable choice for retailers and brands eager to tap into the platform's growing and engaged user base.

The hashtag TikTokMadeMeBuyIt has become emblematic of the platform's impact, amassing over seven billion views. TikTok's appeal to Generation Z and millennials, driven by its addictive algorithm and positioning as an entertainment hub, has made it irresistible to retailers and advertisers alike. Krishna Subramanian, a founder of the influencer marketing firm Captiv8, observes, "The growth that we've seen is insane. Brands have moved from just testing out TikTok to making it a budget line item or creating dedicated campaigns for TikTok specifically."

TikTok's Allure for Retailers

Since August, at least 18 public retail brands spanning apparel, footwear, makeup, and accessories have mentioned their TikTok efforts during analyst and investor calls. Even competitors like Instagram have developed features akin to TikTok, such as Reels, in an attempt to lure creators and advertisers.

TikTok's internal data, shared with advertisers but unverifiable independently, indicates that Gen Z users (aged 18-24) watch over 233 TikToks daily and spend 14% more time on the app than millennials or Gen Xers. Moreover, the platform revealed that 48% of millennial mothers and women aged 25 to 34 spend an average of 60 minutes on TikTok daily.

Christine White, Senior Director of Media and Content Strategy at Ulta Beauty, highlights TikTok's unique appeal, stating, "TikTok is absolutely about a mind-set more than anything. People are going there for lots of different reasons — they're looking to connect, they're looking to laugh, they're looking to find feel-good stories, and they're looking, inadvertently, to shop, whether they know it consciously or not."

Ulta Beauty has leveraged TikTok creators to introduce Ulta Beauty sections in Target stores and engage TikTok users in showcasing their favorite skincare products. The results speak for themselves, with Ulta Beauty reporting increased sales attributed to viral TikTok videos.

The TikTok Creator Ecosystem

Retailers have embraced TikTok creators as powerful allies in their advertising endeavors. These creators, often with hundreds of thousands or even millions of followers, model or demonstrate products and encourage store visits through their engaging content. Live shopping events, where users can interact with hosts and make purchases in real time, have also gained popularity on TikTok.

One such creator, Maddison Peel, shares her success story. With over 300,000 followers, she now earns between $5,000 to $10,000 a month working with brands. This income enabled her to leave her job at McDonald's, where she was earning less than $1,000 every two weeks. Retailers often send her gift cards to purchase products featured in her cooking videos, which are typically filmed at home.

Peel emphasizes the effectiveness of TikTok as an advertising platform, especially for younger demographics. Unlike traditional TV advertising, which many millennials and Gen Z individuals are no longer watching, TikTok ads reach these audiences as they scroll through their feeds.

The Power of TikTok's Algorithm

What sets TikTok apart from other platforms is its algorithm, which tailors content recommendations based on user interests, video watch times, likes, comments, and tags. This algorithm ensures that users are continuously presented with engaging and relevant content. Brands can also pay to boost their sponsored content, increasing their reach.

Christine White of Ulta Beauty notes the uniqueness of TikTok's algorithm, stating that it distinguishes TikTok from other platforms. TikTok remains a platform where anyone, even newcomers, can go viral. This is exemplified by creators like Maddison Peel, who gained popularity with a video featuring a roasted chicken set to a Cardi B song.

Abbie Herbert, another TikTok creator with over 10.6 million followers, emphasizes TikTok's appeal as a creative and authentic space. She has partnered with retailers like Pottery Barn, Amazon Prime, and Walmart for brand deals. Her content resonates with both teenagers and young adults, showcasing the platform's diverse demographic reach.

Brands Thrive on TikTok

American Eagle, with its teen-focused audience, was an early adopter of TikTok. The company collaborated with major creators and experienced viral success with its Aerie brand after a nonsponsored review of its leggings went viral. According to Craig Brommers, Chief Marketing Officer of American Eagle Outfitters, TikTok has become a "sunny place" for young people to express themselves authentically, distinguishing it from more curated platforms like Instagram.

Even as TikTok continues to thrive, other platforms are not idle. Instagram has begun offering payment incentives to creators for views on their content, making it a viable alternative for some creators. However, TikTok remains the preferred choice for many retailers and advertisers due to its unique ability to amplify content through its algorithm.

The Future of TikTok Advertising

TikTok's rapid ascent in the world of advertising has left an indelible mark on the industry. Retailers are eager to experiment further on TikTok, especially as the platform attracts older users. Brands understand that the potential for their products to go viral on TikTok is significant, and they want to be prepared when it happens.

As Mae Karwowski, CEO of influencer firm Obviously, notes, "There are just some things that are going to catch on or they're not, but the TikTok algorithm will really amplify things in a way that all of a sudden can move the culture."

TikTok has become a marketing powerhouse, allowing brands to seamlessly integrate their products into authentic, engaging content that resonates with users. With its unique algorithm and massive user base, TikTok offers advertisers unprecedented access to the coveted Generation Z and millennial demographics. As TikTok continues to evolve, it's clear that it has reshaped the advertising landscape and is here to stay as a dynamic and influential platform for brands and creators alike.