tikTok is set to overtake the global advertising scale of Twitter and Snapchat combined this year, and catch up with the mighty YouTube in two years, as trend-setting teens and young adults make it the hottest social app right now – and Facebook is worried.
China-owned video-sharing platform is forecast to catch up with YouTube by 2024, when both are expected to earn $ 23.6 billion (£ 18.2 billion) in advertising revenue, although TikTok was launched worldwide 12 years after its competitor, owned by Google.
Helped by unparalleled moments of coolness in the midst of the pandemic – Idaho worker Nathan Apodaka, a skateboarder with Dreams, returned Fleetwood Mac Rumors to the top 10 more than four decades after its release – TikTok’s growing growth contradicts the metronomic pace of the name. mu.
Last year, it overtook global advertising on Snapchat, previously a favorite digital site for teenagers for twenty-something years, and by the end of this year it will surpass that on Twitter. This year, it is expected to triple global advertising revenue to $ 11.6 billion, more than $ 10.44 billion for Snapchat and Twitter combined.
“TikTok’s user base has grown over the past few years, and the time users spend on the app is amazing,” said Debra Aho Williamson, chief analyst at Insider Intelligence, who estimated the advertising costs. “It has moved far beyond its roots as an application for synchronizing lips and dancing. It creates trends and encourages deep relationships with creators who maintain consumer engagement, video after video. ”
TikTok got its billionth user in 2021, four years after the global launch, half the time it took on Facebook, YouTube or Instagram, and three years faster than WhatsApp. Earlier this week, analysts at data.ai revised their forecast that TikTok would reach 1.5 billion active users a month this year, after analyzing it to exceed 100 million users in the first three months.
The company is winning the battle for the “sweet spot” of social media users, those in the 18- to 25-year-old demographic group, where Facebook is seeing its biggest decline, with parent company Meta trying to stop the move by attracting them to statablemate Instagram .
TikTok is also becoming more addictive. Although the platform is estimated to be limited to people aged 13 and over, about 16% of three- and four-year-olds watch TikTok content, according to a study commissioned by media regulator Ofcom. This has increased to 29% of all children in the age group of five to seven.
Last year, the typical TikTok user spent an average of 19.6 hours a month on the app, according to data.ai, equal to Facebook, a world leader in social media time. For TikTok, this is almost a fivefold increase in just four years, compared to 4.2 hours in 2018.
“Facebook has always been the biggest competitor in this space for dominant users,” said Sam O’Brien, chief marketing officer at affiliate marketing company Affise. “But it doesn’t seem to be able to persuade loyal TikTok users to return to their platform. TikTok has come up with its own way to give the platform addictive quality.
Mark Zuckerberg’s target still dominates the market – Facebook has 2.9 billion active users per month and Instagram another 2 billion, with Insider Intelligence setting their advertising revenue for 2024 at $ 85 billion and $ 82 billion, respectively. However, last month, fear of TikTok prompted him to hire a lobbying firm to portray the company as a “real threat, especially as a foreign-owned application.”
“Meta clearly sees herself in the battle against TikTok for the hearts, minds and longevity of millennials, a significant part of the social media market,” says O’Brien. “TikTok has experienced staggering consumer growth since the beginning of the global pandemic, taking over a large part of its competitor’s audience.
Meta’s tactics are intended to exploit suspicions fueled by the Trump administration that Chinese companies, from telecommunications giant Huawei to the mother of TikTok ByteDance, pose a threat to national security as potential personal data channels for Beijing.
Two years ago, India, one of the world’s largest social media markets, banned 59 Chinese applications, including TikTok. However, Trump’s plans to force ByteDance to sell its international operations to a US company such as Microsoft or Oracle have disappeared after he lost the US presidential election.
However, suspicions remain among many users, including those in the UK, which has banned the use of Huawei equipment in mobile phone networks. A survey last year found that almost a third of all Britons are concerned that TikTok may share their personal data with the Chinese government. Among people aged 18 to 34, a third believe they will pass on their data at China’s request.
ByteDance was also under pressure at home as Beijing sought to seize power over the country’s technology titans. Billionaire co-founder Zhang Yiming unexpectedly announced in May that he would step down as CEO and resigned as chairman in November as ByteDance underwent a major restructuring, splitting it into six business units.
However, the company remains in gross health and last December was named the world’s largest unicorn with a valuation of $ 353 billion – compared to $ 80 billion a year earlier – with markets hoping for an initial public offering of the blockbuster in the future. ByteDance noted that its total revenue, including operations in China and significant business in applications and e-commerce, rose 70% last year to about $ 58 billion, from $ 34.3 billion in 2020.
While Meta remains a much larger business and revenue rose 37% last year to $ 118 billion, Zuckerberg felt the need to launch a trade counterattack to support and diversify its advertising-based business model.
Always quick to emulate competitors’ successful innovations, Meta is exploring the launch of virtual coins, dubbed by Zuck bucks employees, for Facebook and Instagram users to buy and use, in a very similar strategy to the one already used exclusively. successfully from TikTok.
Earlier this week, TikTok turned out to be the most lucrative app in the world for in-app purchases. TikTok users spent $ 840 million on its virtual currency, coins, which can be used to tip creators and promote videos in the first quarter, up 40 percent year-over-year.
“This is the biggest quarter for any application or game,” said Lexi Sidow, head of data.ai’s insights department, which published the report. “This is the first app to ever surpass a game in consumer spending for a quarter.”
Zuckerberg’s plans to diversify revenue follow the ill-fated launch of a direct copy of TikTok Lasso in 2018, which closed in just 18 months. Meta has persevered with competing short-form video product Reels, which launched on Instagram in 2020 and Facebook last year, but despite its efforts, TikTok’s momentum shows no signs of slowing down.
“Some young people have shut down Facebook altogether,” said Jamie McEwan, a senior media analyst at Enders. “In the UK, people aged 18 to 24 spend as much on TikTok as Facebook, Instagram and WhatsApp combined. There is fierce competition for the weather. TikTok is the fastest growing at the moment and it has scale, it’s the one you have to watch. “