9 Reasons Why TikTok is a Strategic Social Media Platform
In August 2020, Donald Trump as U.S.A president announced that TikTok posed a threat to the national security of U.S.A. This played up a couple of potential buyers such as Oracle, Walmart and Microsoft. But Donald Trump lost, Microsoft could not complete the acquisition, and Joe Biden suspended the orders and legal basis that insisted on the sales of TikTok.
Despite the fact that it operates across 150 markets in the world, TikTok’s largest commercial market is in U.S.A, yet its valuation has been estimated to be $200billion, making it the most valuable unicorn, even ahead of OpenAI.
Recently, it shutdown activities, based on legislation and Supreme Court interpretations, but enjoyed some leniency from a newly sworn in Donald Trump. Though the American government has imposed such conditions on Grindr in the past, as well as other companies under the chokehold of Committee on Foreign Investment of the United States (CFIUS), TikTok is a special company. See reasons below:
Why is TikTok Special? Read Below
1.Large User Base
As of April, 2024, TikTok had over 1.9 billion active users worldwide, with the largest numbers represented in Indonesia(127.5m), USA (121.52m), Brazil (101.8m), Mexico (77.93m) and other countries. These users are spread over 150 markets across; Asia, Europe and the Americas. TikTok is also available in more than 35 languages.
2. Demographic Spread and Strategic Nature
Two-third of TikTok users belong to the Gen-Z cohort, and most users are between the age of 18-24 years (34.8%), closely followed by people between 25-34 years (34.0%).
In terms of gender distribution, Oberlo reports the global proportion of TikTok female users is 43.8%, while males make up a slightly larger share at 56.2%. However, in the United States of America, the proportion of female TikTok users (54.4%) is higher than male users (45.6%).
Generally, the age and gender distributions are similar across social media platforms, but what makes the case of TikTok worthy of strategic consideration is that Gen-Z users of social media spend more time on TikTok than any other social media platform, asides YouTube. According to Khoros, social media users spent an average of 53.8 minutes daily, compared to YouTube where users spent 48.7 minutes daily. Sprout Social also reports that while Gen-Z and Gen Alpha numbers on social is growing, adoption my Millennial’s is largely flat, while Gen-X numbers are falling.
This makes TikTok a very strategic platform for the future of marketing. While YouTube equally qualifies as an engaging platform for Gen-Z and successive cohorts, it does not provide the flexibility for influencer marketing as well as the short-form entertainment and higher real-time engagement that TikTok affords its users.
3. Creative Content Creation and Monetization
TikTok’s content formats come in the form of short-form video, which is visually driven. This format radically altered the sense experience of social media, increasing interactivity, combined with the ability earn gifts. visually-driven format has revolutionized the way users consume and interact with content.
Several creators have confirmed TikTok to offer the broadest monetization channels, offering channels such as; affiliate partnerships, merch, tips, virtual gifts on live, TikTok Creator Fund, TikTok ads. The TikTok Creator Fund, which is valued at $200 million in 2021 is based on people watching and liking your videos. TikTok typically splits ad money with creators, giving half of proceeds, making it a great place to monetize.
While YouTube is also a major platform when it comes to monetization, the benefits often do not translate to a wide audience of creators, compared to TikTok. Meta products such as Instagram and Facebook, come behind in providing as much incentives for creatives, even against their ability to generate more revenues.
4. Emphasis on Entertainment
TikTok places an emphasis on creativity, music, and general entertainment content. This the reason why entertainment ranks top of the content format and type on the platform. This speaks generally to the tendency of younger generations for more expression and storytelling. Most importantly, it underscores the rise of brand building and opportunities to leverage cultural relevance.
While other platforms such as Google ad network and Meta advertising platforms have designed their platforms to help advertisers engage in performance marketing, TikTok has blazed the pathway for influencer marketing, hence, brand building for cultural relevance.
We see brands like Nike migrating from performance marketing strategies to brand building. TikTok proves it is a platform for this in the long run.
5. Marketing and Advertising
TikTok’s has a vast influencer network, which offers brands and even celebrities a unique opportunity to reach and engage with their specific target audiences. It also possesses typical advertising formats on its platforms, including; in-feed ads, branded effects and shopping ads.
6.Community and Engagement
High engagement rates: TikTok users are highly active, where an average user spends around 52 minutes on the platform. TikTok also runs on a challenge format, where entertainment and these impression or dance challenges spur increased user-generated content and TikTok’s challenge-based format encourages user-generated content. This also supports TikTok’s growth, making it the fastest growing social media platform.
7. Cultural Relevance and Amplification
TikTok has affected global culture, more than any platform in recent times, especially with the trends, memes and challenges it encourages. Its algorithm plays up underrepresented groups and voices, thereby providing for more diversity and representation.
8. Business and E-commerce
Integration of E-Commerce
TikTok’s shopping features, such as Shopping Ads and Product Links, enable businesses to tag products directly in their videos. TikTok also offers business accounts, enabling access to analytics, advertising, and other features that helps businesses facilitate their commercial processes.
9. TikTok Algorithms
TikTok algorithms are basically recommendation engines, just like that of Facebook, Instagram and LinkedIn. However, these algorithms serve to drive growth and engagement of the platform.
TikTok’s algorithm is based on the quality of the content (video) that a user puts out. However, the algorithm of other platforms like Facebook and Instagram depend on connections, likes and other criteria. TikTok’s simple focus on short videos and their quality. But this does not make it superior, considering that every algorithm has its weaknesses and strengths.
But we can make the argument here that an algorithm that appreciates short-form video and entertainment will eventually have a long lead time that allows for perfection and tacit knowledge that embodies nuances within the development of such an algorithm. This is the case for TikTok. Currently, the attention span of the average human has whittled, due to information overload and cognitive impairments driven by dopamine surges.
This makes TikTok’s algorithm more suitable for the times.
All of the reasons highlighted above underscore the concerns of U.S.A government on the threat of TikTok. The realization that whoever controls the dominant global social media controls global culture. And whoever controls global culture, controls human civilization, and hence is the leading soft power. This is the dilemma of the global western order.
Investors and advertisers need not relax on the grace period accorded to TikTok owners- to find a buyer for 50% of its ownership, they should find alternative platforms to spread their digital advertising spend. TikTok in its current ownership form is a threat to U.S.A national security, and the U.S.A is where they make half of their global revenues.
If the proposed sale does not come through, then advertisers need to figure where to direct their advertising dollars.
Till then, Viva TikTok.
