TikTok made around $4 billion in advertising revenue in 2021, according to the Chinese media outlet LatePost and they plan to triple that this year to $12 billion. The social video platform nearly doubled the size of its advertising products and technical teams in 2021.
According to official data, TikTok's global monthly active users reached 1 billion in September 2021. In 2020, it surpassed Meta's Facebook and WhatsApp to become the world's No. 1 in downloads.
In late August 2021, Shopify became the first commerce platform to partner with TikTok to launch in-app shopping. A month later, Square announced a similar partnership. Both integrations allow businesses that use the platforms to seamlessly link their products in videos on TikTok, where viewers can shop them directly without visiting a web browser.
But compared with products such as Facebook, TikTok still has many shortcomings in the advertising business. For example, Facebook's product form determines that it can master more complete user tags, including real names and social relationships, which helps it make more accurate advertising recommendations; in addition, Facebook has more large customers. TikTok's current advertisers are mainly small and medium-sized companies.
"This is also the reason why TikTok has begun to vigorously develop e-commerce in the past year: on the one hand, in order to open up new sources of income; more importantly, the e-commerce business is closer to big customers and big brands. Once it is established, advertisers will definitely be willing to have more budget stay here," said a person close to ByteDance.
It's hard to tell if they will make that number, but they do have momentum on their side. According to our most recent Local Pulse Report™, 8% of small businesses reported using TikTok for marketing purposes in 2021. We expect that to increase to around 12% or slightly higher this year.
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