Lashanne Phang, senior director of mobile at Pubmatic, the programmatic ad platform, said that TikTok is gaining ground among marketers because of its algorithm. Even if TikTok can’t pinpoint its own effectiveness, it seems to target ads with the same proficiency with which it targets videos to users of the app. TikTok’s infamous algorithm is known for hooking audiences with incredibly niche interests and entertainment tastes.
“Ultimately it’s who has the algorithm that is able to target the user best based on user behavior and predictions,” Phang said.
Mass marketing confusion has led to a reshuffling of the ad decks, according to Noble. Brands that were comfortable plowing all their money into Facebook, Instagram and Google are now open to test the waters on TikTok, and to a smaller extent Snapchat and Pinterest. Meta’s ad revenue was $28.15 billion in the second quarter, down slightly from $28.58 billion in the same quarter in 2021, which was its first yearly ad revenue decline since becoming a public company in 2012. Meanwhile, TikTok does not disclose ad revenue, since it is a Chinese-based private company, but The Wall Street Journal reported recently that TikTok could triple its ad revenue this year to $12 billion.
Basis Technologies, a demand-side platform for advertisers to bid on ad inventory on web, apps and connected TV, said brands are increasing spend on TikTok. “We are seeing our advertisers’ investment in TikTok nearly double this year compared to last year, collectively,” said Amy Rumpler, senior VP of paid search and social at Basis Technologies, in an e-mail. “As advertisers overall are becoming more comfortable with the platform and its ability to generate performance, dollars are starting to flow in that direction.”
True Classic Tees
Ben Yahalom, chief business officer at True Classic Tees, is running marketing tests on Meta to adjust to Apple’s new iOS rules. True Classic is in its third year of business, with about $200 million in sales a year from its direct-to-consumer clothing lines, with about $100 million in marketing spend a year, Yahalom said.
True Classic puts up to 60% of its ad budget into Meta, because Meta’s apps reach 3.65 billion people a month. “Without Meta we would definitely not be where we are,” Yahalom said. True Classic will “push as hard as we can” into TikTok, Yahalom said, but it’s “not nearly as scalable as what you get on Meta.”
Meanwhile, True Classic has adjusted how it targets ads, choosing to reach broad audiences instead of niche interests. For instance, instead of just serving ads to men, the target for the clothing line, True Classic includes women in the targeting. Meta’s advertising automation algorithms chooses the most likely shoppers regardless of demographics. True Classic also experiments with more creative versions of ads, to win over shoppers with better marketing instead of relying on hyper-precise targeting. And True Classic adjusted the bidding strategy to reach people on Apple devices, Yahalom said. True Classic is willing to spend more to win an ad impression for a person using an Apple device, because its calculations showed ads to Apple consumers drive higher returns on ad spend.
