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TikTok's Growing Advertising Base | MikMak on Bloomberg Technology
Introduction
In a recent discussion, Rachel from MikMak, a company that works with over 2,000 prominent global brands, highlighted the significant impact of TikTok on the advertising landscape. TikTok has experienced remarkable growth, boasting a 200% increase in advertising spending year-over-year. While TikTok thrives, Alphabet, which encompasses platforms like Google Search and YouTube, has faced a 65% decline in advertising revenue.
Rachel noted that if a potential ban on TikTok were to happen, Alphabet would likely see substantial regains in brand advertising traffic. The implications extend beyond just Alphabet; other competitors like YouTube Shorts and Meta’s Reels would stand to benefit from TikTok's absence.
In terms of e-commerce, TikTok offers a unique value proposition that combines the impactful reach of television with direct-response advertising capabilities. This dual functionality allows brands to build their presence while effectively driving conversions. Despite TikTok's success as a rising marketplace—claiming the title of the fourth largest in the U.S.—traditional digital platforms like Alphabet and Meta remain dominant players for bottom-of-the-funnel advertising focused on driving sales.
In the face of a potential TikTok ban, Rachel suggested that the big brands, accustomed to shifts in the digital landscape, would be able to reallocate their advertising budgets easily—as they did in response to changes following Elon Musk’s acquisition of Twitter (now known as X). The real concern lies with small to medium enterprises that depend heavily on TikTok for income. Many creators and smaller businesses would face significant challenges in finding alternative revenue streams.
If TikTok were to vanish, Rachel anticipated a noticeable shift in sales back to established e-commerce giants like Amazon and Walmart, while platforms like eBay and Etsy could also see a resurgence. Overall, these developments signal an ongoing disruption in the advertising and e-commerce spheres.
Keywords
- TikTok
- Advertising growth
- Alphabet
- YouTube Shorts
- Meta
- e-Commerce
- Small businesses
- Amazon
- Walmart
- eBay
- Etsy
FAQ
Q: How much has TikTok's advertising increased?
A: TikTok has experienced a 200% year-over-year growth in advertising spending.
Q: What company is losing advertising revenue due to TikTok?
A: Alphabet has seen a 65% decline in advertising revenue as TikTok’s popularity has surged.
Q: What would happen if TikTok were banned?
A: If TikTok were to be banned, Alphabet could expect to see significant gains in brand advertising traffic, along with potential benefits for platforms like YouTube Shorts and Meta’s Reels.
Q: Which marketplaces could benefit from TikTok's absence?
A: Marketplaces such as Amazon, Walmart, eBay, and Etsy are likely to gain from a disruptive shift if TikTok were to be banned.
Q: Who is most impacted by a potential TikTok ban?
A: Smaller businesses and creators who rely heavily on TikTok for their revenue would face the most significant challenges if the platform were to be banned.