TikTok has diluted the dominance of the two largest online advertising platforms – Google and Meta, as the incumbents no longer rake in the majority of U.S. advertising money.
Insiders in the industry expect the trend to continue in the foreseeable future as brands now prefer TikTok as well as Netflix advertising.
According to estimates by a research firm Insider Intelligence Inc, Google and Facebook’s parent firm Meta accounted for a cumulative 48.4% of the total U.S. advertising spending in 2022.
The two have for nearly a decade maintained dominance, accounting for no less than 50% of total market share in the US.
Intelligence Inc however projects the old behemoths’ market shares to continue on a downward spiral and end this year at 44.9% while TikTok continues to boom.
Rise of TikTok advertising
Other research by Omidia projects TikTok’s popularity will continue to rise with its advertising revenue surpassing that of Meta and YouTube combined by 2027. Its latest survey puts Meta and YouTube’s market share at a combined 31% and expects it to further shrink to 12% apiece.
The firm says TikTok’s revenue will surge 238% to $44 billion by 2027 from $13 billion in 2022 while TikTok Douyin – its app in China – will reach $76 billion in 2027 from $28 billion last year.
According to Omidia, this means TikTok will account for 37% of the generated revenue from online video advertising. This will be significantly greater than Meta and YouTube that together are expected to account for 24% of the total revenue by that time, according to projections.
Total Gen Z appeal
Marketers have been focusing their attention on Generation Z (Gen Z) as they enter the job market in their early adulthood. They have realized putting too much money on platforms like Facebook, YouTube and Instagram will not cut it for Gen Z.
They have now added TikTok to the mix and the trend is expected to continue in 2023 and going forward, according to marketers MetaNews have spoken with.
TikTok is becoming more popular by the day.
“Advertisers are beginning to move away from Meta and YouTube and towards TikTok to reach their vast follower base,” said Maria Rua Aguete, senior director at Omidia’s Media and Entertainment practice group in a statement.
According to Digiday’s The 2023 Notebook, Gen Z has shifted from publishing content on Instagram to TikTok, spending more time on the latter app.
Instead of merely liking and commenting or be passive observers, Gen Z wants to participate on social media.
Breeding ground for viral content
With an estimated 1 billion monthly users and expected to keep growing, marketers may ignore TikTok at their own risk.
The app has been downloaded over 2 billion times. It allows brands to drive exposure by using tools like hashtags with popular hashtags typically getting significant views.
According to the Entrepreneur, the most used hashtag last year was “fyp” (referring to TikTok’s “For You Page”) which amassed over 18 trillion views.
Global technology advisory and investment firm GP Bullhound, in its 2023 trends says to watch says TikTok as it remains poised to take significant market share from incumbents like Facebook and YouTube.
The global firm however warns TikTok to prepare for US regulations, which may burst their bubble.