By Julia Tabisz • November 20, 2023 • 5 min learn •
This analysis relies on distinctive information collected from our proprietary viewers of writer, company, model and tech insiders. It’s obtainable to Digiday+ members. More from the series →
The vacation frenzy has already had its gentle begin for a lot of manufacturers and retailers, and it’ll shift into excessive gear in only a few days. And types have been spending extra on TikTok main as much as the vacation season this 12 months, teeing up the platform to play an essential function of their vacation advertising and marketing efforts.
That is in response to Digiday+ Analysis surveys of greater than 400 model and retailer execs that passed off all year long in 2021, 2022 and 2023.
To start out, Digiday’s survey discovered that TikTok is turning into extra worthwhile to manufacturers and retailers, particularly on the subject of revenues and branding. Whereas, total, there hasn’t been an enormous change within the proportion of name and retailer execs who mentioned TikTok is at the least considerably worthwhile to driving their revenues during the last 12 months (81% of respondents mentioned the platform is at the least considerably worthwhile to their revenues this 12 months, in contrast with 77% who mentioned the identical final 12 months), the story is completely different after we escape the manufacturers and retailers who mentioned TikTok is extraordinarily worthwhile to driving revenues.
The proportion of retailer and model execs who mentioned TikTok is extraordinarily worthwhile to driving their revenues (versus considerably worthwhile or worthwhile) was already trending up barely as of final 12 months — 8% of respondents to Digiday’s survey mentioned the platform was extraordinarily worthwhile to their revenues in 2022, in contrast with 5% in 2021. Nonetheless, this 12 months, that proportion noticed a really vital spike. Almost a 3rd of manufacturers and retailers (32%) mentioned this 12 months that TikTok is extraordinarily worthwhile to driving their revenues — much more than final 12 months’s 8%.
And constantly over the previous few years, virtually all manufacturers have agreed that TikTok is at the least considerably worthwhile for branding. This 12 months, 96% of name and retailer execs advised Digiday the platform is at the least considerably worthwhile on this respect, in contrast with the 92% who mentioned the identical final 12 months and the 95% who mentioned so the 12 months earlier than.
However importantly, the share of manufacturers and retailers who’ve mentioned TikTok is extraordinarily worthwhile for branding has been trending upward. This 12 months virtually half of respondents (48%) mentioned TikTok is extraordinarily worthwhile to their model, up from 39% in 2022 and simply in need of one-quarter (24%) in 2021.
TikTok’s development in worth to manufacturers and retailers has led to a rise in funding in advertising and marketing on the platform — even since just the start of this 12 months. All through 2022 and even into the primary quarter of 2023, about half of manufacturers mentioned they didn’t put any advertising and marketing spend towards TikTok. However in Q3 of this 12 months, 78% of name execs advised Digiday that at the least a really small portion of their advertising and marketing budgets go towards TikTok. That’s an enormous soar from the 54% who mentioned the identical in Q1.
Curiously, Digiday’s Q3 survey was fielded on the finish of August — lower than two weeks earlier than the launch of TikTok Shop. Because the platform appears to be like to change into the place the place customers truly buy the merchandise they see there, it’s seemingly entrepreneurs have upped their TikTok investments as they take a look at whether or not TikTok Store will likely be a profitable tactic. We’ll have to attend for future surveys to see whether or not TikTok maintains these features.
As a part of their advertising and marketing investments in TikTok, Digiday’s survey discovered that manufacturers are buying extra promoting on the platform this 12 months. It’s essential to notice, although, that TikTok nonetheless has a distance to go to succeed in the ad-buying standing of its extra established rivals like Meta’s Fb and Instagram. Nevertheless it’s potential that it’s on its means.
Greater than a 3rd of manufacturers and retailers (35%) mentioned they bought promoting on TikTok previously month as of midway via this 12 months, in contrast with lower than 1 / 4 (24%) on the identical level final 12 months. That’s a big achieve — however, for context, 70% of name and retailers execs mentioned this 12 months that they bought advertisements on Fb, and 72% mentioned the identical of Instagram.
In keeping with Digiday’s survey findings, it’s potential that, quite than shopping for promoting on TikTok, manufacturers and retailers are placing extra sources towards the natural content material they share on the platform main as much as the vacations. In different phrases, manufacturers are spending extra on creating content material particularly for TikTok.
This 12 months, 39% of name and retailer execs advised Digiday that they make investments rather a lot in creating unique content material for TikTok. Final 12 months, lower than 1 / 4 (23%) mentioned the identical. Admittedly, this can be a little bit of a rebound from 2021, when a 3rd of manufacturers and retailers (33%) mentioned they have been spending rather a lot on unique TikTok content material. Nevertheless it might additionally point out that manufacturers are testing the waters of their natural attain along side the gross sales potential of TikTok Store.
What all of this results in is how manufacturers and retailers will likely be approaching TikTok because the all-important vacation season formally kicks off this weekend. And, in response to Digiday’s survey, manufacturers’ and retailers’ ramp-up of their TikTok investments will materialize of their vacation advertising and marketing methods this 12 months (extra on that in Digiday+ Research’s newly released holiday marketing and commerce report).
Particularly, Digiday’s survey discovered that 60% of name and retailer execs mentioned this 12 months that TikTok will develop extra essential to their advertising and marketing plans through the holidays, up barely from the 55% who mentioned the identical final 12 months. In the meantime, solely 4% mentioned the platform will develop much less essential to their vacation advertising and marketing plans this 12 months. (Thirty-seven p.c mentioned TikTok’s advertising and marketing significance received’t change through the holidays this 12 months.)
We’ll keep tuned within the new 12 months to see if manufacturers discover that their TikTok investments repay through the vacation season, and whether or not the platform can improve its advertising and marketing clout even additional in 2024.
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