ByteDance Ltd owned TikTok, once best known for viral dance videos and pop songs, and gradually built itself into a digital advertising juggernaut, the New York Times reported.
TikTok sold access to its growing internet foothold to brands and developed products that make it easier to advertise on the platform.
In 2022, TikTok is on track to make nearly $10 billion in ad revenue, more than double what it generated last year, according to Insider Intelligence estimates.
TikTok’s ad revenue this year will likely eclipse that of rivals like Twitter and Snap Inc SNAP. Yet its business remains small compared with Alphabet Inc GOOG GOOGL's Google, and Meta Platforms Inc META, which owns Facebook and Instagram.
TikTok, though not immune, appears to compound its rivals’ woes by stealing business from them. Snap recently called TikTok one of its “very large and very sophisticated competitors.”
YouTube, which last month reported its first decline in ad revenue in at least three years, recently began placing ads in Shorts, its TikTok challenger. Mark Zuckerberg, Meta’s CEO, named TikTok as a rival at least five times on an earnings call in February.
TikTok’s users spend an average of 96 minutes a day on the app, nearly five times what they spend on Snapchat, triple their time on Twitter, and almost twice as much as their time on Facebook and Instagram, according to Sensor Tower.
Unlike other social media platforms, TikTok has ads that appear like any other full-screen video on the forum. The app has pushed brands to work with its content creators, making ads seem even more natural. It has told brands: “Don’t make ads, make TikToks.”
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