TikTok undercutting its rivals with cheap ads to boost revenue

TikTok is undercutting its social media rivals social media platforms by offering cheap ads amid a slowdown in digital ad spend.

The Financial Times has been informed that an increasing amount of advertising spend is moving from platforms such as Twitter and Meta to TikTok due to the Chinese site’s lower costs and higher levels of user engagement.

TikTok boasts an audience of over one billion users across the globe.

Data from New York-based media agency VaynerMedia from 2022 showed that the cost to obtain 1,000 impressions from digital ads on TikTok is almost half the price of Instagram Reels, a third cheaper than Twitter and 62% cheaper than advertising on Snapchat.

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Advertising spend boomed on TikTok during Q4 of last year, with the top 1,000 advertisers in the US increasing their ad spend on the video-sharing site by 66% to $467 million from September to October, according to figures from market intelligence agency Pathematics.

“So many of our brand partners . . . used to be 100% Instagram,” said Permele Doyle, founder and president of creative agency Billion Dollar Boy.

“Now for 2023, we’re seeing 80 or 100% TikTok.”

TikTok rivals Snap and Meta have both been hit by a global downturn in online spending which has prompted them to cut back on headcount drastically.

Company general manager of global business solutions Kris Boger told the Financial Times:  “There is a big opportunity for brands to create incredible advertising on TikTok, whatever the budget.”



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