In the latest tidings in the internet community, social media app TikTok’s new monetization strategy announced the launching of a TikTok ad product which will entitle premium publishers to sell ads flanking their posts, and also fill the creators’ pockets with a 50 percent cut of the ad revenue secured.
The short-video- sharing app which has lately been under public scrutiny ever since its CEO Shou Chew’s testimony to Congress, reported bagging 150 million active monthly users in March, surging from 100 million in 2020.
Historically, the dually-based social company in Singapore and Los Angeles had been a stalwart for independent creators. But TikTok’s premium ad product – Pulse Premiere, now glissades into the era of tighter ad spending by virtue of bridled consumer spending. Publishers have long endured tough economic conditions which have conceded to layoffs.
Brands including DotDash, NBCUniversal, Condé Nast, UFC, WWE, Meredith, and Buzzfeed will be joining the launch of the Pulse Premiere.
The social media app is expected to retain 2.5 percent of the US digital ad market in 2023 and TikTok’s ad revenue is anticipated to skyrocket 36 percent to $6.83 billion, according to Insider Intelligence.
TikTok’s Premium Ad Product: Pulse Premiere
Despite embracing the glitzy video-sharing app for building their businesses, Publishers and TikTok creators have often nitpicked the social media platform’s lack of opportunities for generating monetization directly.
TikTok’s publisher ad product is an extension and evolution of its Pulse program, which permits advertisers to place their brand’s content parallel to the top 4 percent of the content on the platform, based on metrics such as watch time, likes, and comments.
“It’s more about how we can really diversify our portfolio. TikTok’s ad product is aimed at providing more transparency to advertisers on where they’re putting their money.”
– Ray Cao, Head of monetization product strategy, TikTok.
Thousands of young users have flocked to the digital app and the publishers are trying to make the most of their ad revenue from TikTok’s advertising platform.
TikTok’s Monetization Strategy
TikTok was the most-downloaded app in 2022 after having been downloaded more than 4 billion times globally.
The new monetization strategy of TikTok’s ad product will position advertisements against all posts from the participating publishers. This move also creates a new stream of moolah with TikTok’s ad revenue for creators, strengthening the app’s relationship with its moneymakers.
Condé Nast has been creating content for TikTok through a series called ‘Beauty Secrets’ for the brand Vogue.
“We have a strong partnership with YouTube and Instagram. The potential of the partnership with TikTok is pretty significant, and really just taking off.”
– Pam Drucker Mann, Chief Revenue Officer, Condé Nast
The new TikTok ad product allows actual monetization for Condé Nast, and they are loving it.
TikTok’s Woes With The US Government
The TikTok app faces the onus of possibly being banned from the US, due to alleged fears of US user data falling into the objectionable hands of the Chinese government (TikTok is owned by China’s ByteDance).
Playing down the threat of an outright ban to reassure advertisers, the social media company rebutted the diabolical allegations of having any ties with the Chinese government. It has proposed a $1.5 billion plan to realign its US operations from China. One of the concerns underscored in the TikTok-Congress battle was the social media app’s lack of content moderation for young audiences, leaving them exposed to potentially heinous acts.
In a nutshell, TikTok’s miniature slice of the pie of the digital ad market is inching on the market dominance of Meta and Google, which have ramped up their offerings of short videos. The combined efforts of Google and Meta are estimated to prevail over nearly 45 percent of the US digital ad revenue this year.
