TikTok, the viral video app, will ramp up its spending “across all functions” in the US and is considering how to let its users shop directly from brands, according to a senior executive, as the platform tries to convert its enormous popularity with teenagers into revenue.
Blake Chandlee, a former head of advertising at Facebook who is now in charge of building TikTok’s US ad partnerships, said “hundreds . . . if not thousands” of brands are already sold on the “hyper growth” of the app, which displays an endless scroll of 15-second video clips.
TikTok has moved into the former office of WhatsApp, Facebook’s messaging app, in Mountain View, California, and Mr Chandlee has been raiding his former employer for staff, most recently poaching Trevor Johnson, a senior Instagram executive in Europe.
Mr Chandlee compared the rise of TikTok to his early days at Facebook. “It’s very similar to when I joined Facebook back in 2007,” he said. “Brands were all interested. They know they want to be there, they know the users are there, the cultural relevance is there and there’s this momentum. They’re just not quite sure how to do it.”
He said he was unconcerned that his former employer will try to dent TikTok’s momentum by mimicking its app, as it did to Snapchat in 2017. Earlier this month Facebook-owned Instagram launched a clone of TikTok called Reels in Brazil. Another year-old clone from Facebook called Lasso has made little impact.
“They are going to do what they feel they need to do in order to stay competitive,” TikTok’s vice-president of global business solutions said. “Imitation is the greatest form of flattery.”
the number of monthly active users on TikTok
Mr Chandlee suggested that TikTok will try to introduce a shopping tool — following in the footsteps of Instagram, which has been moving to allow users to buy directly from its app.
“If we found that our consumers are engaging with content and they want to buy products within that content, we will enable that as quickly as possible. We will do a single-click through [for purchases],” Mr Chandlee said.
Since its launch in the US two years ago, TikTok, which is owned by the $75bn Chinese tech company ByteDance, has grown to 1bn monthly active users, partly by spending heavily on advertising on other social networks, including Instagram and Snapchat.
In recent months Mr Chandlee has been aggressively pitching to and winning new advertisers; household names include Walmart, Asos and Nike — and even Instagram itself. “We’re seeing these amazing brands . . . coming back time and time again to use the platform,” Mr Chandlee said.
For advertisers, TikTok offers deeply engaged users, with the average person spending 250 to 300 seconds on the app per session, almost double the time spent on Instagram, according to a senior advertising executive. “That bodes well for the growth and stickiness for the audience,” said the executive, who did not wish to be named because of commercial agreements with the platforms.
But the trade-off is that TikTok offers less granular detail on who its users are. It is not a conventional social network, where groups of people can be graphed and segmented, but a service that broadcasts clips to its audience.
Mr Chandlee said he had been guiding brands through what he described as a very different advertising proposition, embracing TikTok’s homespun feel and taking advantage of gimmicks such as the “hashtag challenge” where advertisers can attempt to make their campaigns go viral and persuade users to create videos on a theme that they set.
It is a far cry from the traditional model of having an agency pull together a slick, curated campaign, and requires brands instead to strive to be more relatable and “authentic”, he said. “On Tiktok what you’ll be rewarded for is taking risks . . . and being a little bit quirky and delightful.”
This has included launching a service last quarter to match brands with so-called influencers — many of whom are now flocking to the platform from Instagram — who can help marketers more easily tap trending topics and create viral material.
“In the future, I would love it for brands to be able to . . . brief creators on almost every campaign they run,” Mr Chandlee said, adding that enabling influencers to monetise on the platform was a “huge part of our strategy [in] the next couple of years”.
One advertiser said that while TikTok was not a social network, it did appear to be attracting a certain audience. “It’s not so much about following people in your social circle. If it was, I would worry about the growth. But there seems to be a growing Tiktok-wide community,” said Jeremy Cohen, head of global content partnerships at Publicis Media.
Done properly, early evidence shows high returns for advertisers. Neil Campling, Mirabaud’s head of TMT research, pointed to a recently-reported 24-hour video campaign run by the fashion label Guess that drew a click-through rate — the proportion of viewers who go on to click on an advert — of 16 per cent, compared with industry averages of less than 4 per cent.
“Because you’ve had some of these campaigns being tremendously successful, it sparks interest of others,” Mr Campling said. “It’s highly likely that in 2020 we will see a significant acceleration of growth.”
Mr Chandlee declined to share figures on user and advertiser growth, but said “the numbers are playing out the way that we’re really pleased with”, adding that he was focused on “diversifying” the type of content on the platform to attract a bigger audience.
Meanwhile, the company is pressing ahead with building ad technologies to reach a par with the reigning Google-Facebook advertising duopoly. “One of our core goals is to make it as easy as possible to get on the platform and start experimenting, just running campaigns,” Mr Chandlee said.
This includes fine-tuning advertising targeting capabilities, better automating its ad-buying process and building up third-party monitoring and verification of its ad metrics — until now, a sticking point for the biggest brands, according to several people with knowledge of the sector.
“We’re heard a lot of [feedback] about third-party verification and the need to have third parties involved in the process, and we will support that coming in 2020,” he acknowledged, adding that the company would share more on its plans in the next quarter.
But the challenges to TikTok’s advertising business are also multiplying.
Several advertising agencies said that some western brands were uncomfortable with the company’s Chinese roots for both censorship and data privacy reasons. They are also nervous about the platform’s ability to rein in harmful content and still waiting for it to develop more sophisticated ways to run and monitor ad campaigns.
“I do anticipate there being continued headwinds . . . from a sentiment perspective around social responsibility,” said Kieley Taylor, global head of social at WPP-owned media investment company GroupM. “There are some issues that need to be sorted out, whether in the court of opinion or with regulators.”
US watchdogs recently opened a national security investigation into Tiktok after members of Congress expressed concern that the app could send users’ data back to China. A wave of media reports have claimed that Tiktok is censoring anti-Chinese content.
Mr Chandlee said that the company “hadn’t had many inquiries on that front” from advertisers. He insisted that American business decisions are all made “inside the US” and users’ data is stored outside of China.
Instead, he argued the company can build systems catering to data privacy without legacy systems. “We don’t have that baggage. We think we can build our ads platform in a way that is consistent with where the world’s going rather than where the world’s been.”