Small businesses have always been on the lookout for new and innovative ways to market their products and services. With the rise of social media platforms, small businesses have been able to reach a wider audience and connect with their customers in new ways. TikTok is one such platform that has gained popularity among small businesses for marketing purposes.

According to our most recent Local Pulse Report™, 14% of small businesses are now using TikTok for marketing purposes. Up 17% from last year, this social media platform, known for its short-form videos and emphasis on creativity and entertainment, is becoming a popular marketing tool for small businesses looking to reach new audiences and engage with their customers in a fun and interactive way.

What’s driving the trend?

One of the main reasons for the trend of small businesses using TikTok for marketing purposes is the platform's large and diverse user base. TikTok has over 1 billion monthly active users, and the platform's demographic is broad, with users spanning various age groups and interests. This makes it an ideal platform for small businesses to reach a wide range of potential customers.

Another reason for the trend is the relatively low cost of using TikTok for marketing. Unlike traditional forms of advertising, such as television or print ads, TikTok allows businesses to create and share content for free. Additionally, businesses can use the platform's paid advertising options to reach a larger audience at a relatively low cost.

What’s popular for small businesses?

The most popular form of advertising on TikTok for small businesses is the hashtag challenge, with 24% of small businesses using this method to promote their products or services. Hashtag challenges involve creating a unique hashtag and encouraging users to create and share videos using that hashtag. This allows small businesses to tap into the power of user-generated content and create a sense of community and engagement around their brand.

Another popular form of advertising on TikTok for small businesses is in-feed ads, which make up 20% of small business advertising on the platform. In-feed ads are short, 15-second videos that are shown to users as they scroll through their feed. These ads allow small businesses to showcase their products or services in a creative and engaging way and reach a large audience in a short amount of time.

Brand scan effects are a new form of advertising on TikTok that allows businesses to create interactive experiences for their customers. These effects allow users to scan a QR code or a logo to access a brand's page or a special offer. The survey found that 11% of small businesses use brand scan effects as a form of advertising on TikTok.

What are the benefits for small businesses?

With over 1 billion active users worldwide, TikTok offers small businesses the opportunity to reach a large, engaged audience. Here are five benefits that small businesses can derive from using TikTok for marketing.

Targeted Marketing: TikTok allows businesses to target specific demographics, interests, and behaviors, making it easier to reach the right people with the right message. Businesses can use TikTok's advertising tools to create and display ads to a highly targeted audience.

Increased Visibility: TikTok is a visually engaging platform, which makes it easy for businesses to stand out and gain visibility among their target audience. Short-form video content is an effective way to showcase products, services, and brand values, helping businesses to build brand awareness and loyalty.

Cost-Effective Advertising: TikTok offers cost-effective advertising options, making it an accessible marketing tool for small businesses. Compared to other advertising platforms, TikTok's advertising tools are relatively inexpensive, and businesses can set a budget that suits their needs and goals.

Creative Flexibility: TikTok provides small businesses with the creative flexibility to develop unique and engaging marketing strategies. Businesses can use the platform's video editing tools to create and share high-quality video content that showcases their brand in a fun and entertaining way.

Measurable Results: TikTok provides businesses with detailed analytics on their marketing efforts, making it easy to measure the success of their campaigns and identify areas for improvement. By tracking engagement, reach, and conversions, businesses can make informed decisions about their marketing strategies and adjust their approach as needed.

How does TikTok compare to other social platforms?

According to the small businesses that use TikTok for marketing purposes, they rated the platform’s effectiveness very high compared to other social media platforms. On a scale of 1 to 100, TikTok had an average score of 70 compared to 60 for all other social media platforms together. This is something we just started tracking so we will see how these trends with future waves.