Publishers and ad agencies are in a race for brands' TikTok ad dollars, as marketers lean heavily on the social platform to engage with Gen Zers. 

To this end, over the past few months publishers have created new TikTok-focused content studios, while agencies are beefing up their staff with TikTok creators, as more Gen Z specific agencies emerge. 

On the publisher side, the TikTok ventures are largely coming from social-first publications that have seen success with building their own brands on TikTok and then applying their lessons to creating branded content. Now those branded opportunities are being turned into revenue-generating businesses.

Warner Music Group's IMGN Media, a social-first publishing outlet whose 14 brand channels include Daquan, So Satisfying and TryHard, is the latest publisher to announce a new TikTok-heavy offering for brands. The new Vertical Studios offers everything from consulting to content production and influencer services to reach elusive and conscientious Gen Zers. The 14-person operated unit is utilizing learnings from its own TikTok growth: IMGN properties have a combined 60 million followers and report 5 billion impressions and 4 billion video views a month.

“For us, it was driven by brands coming to us and saying ‘hey, we’re not sure what to do here, can you help?’" says IMGN’s Chief Strategy Officer Noah Mallin. “What we’ve realized is that TikTok is only going to continue to grow and the interest from brands is only going to continue to grow. It makes sense. Gen Z is a huge chunk of the population. The oldest Gen Z members are graduating college and they’re starting to bring the loyalties they will bring through life and starting to buy a whole bunch of different things so now is really the time to get in front of them as a brand.”

Vertical Studios has already worked with Levi’s to launch its global TikTok presence; McDonald’s on the roll out of its Crispy Chicken Sandwich; and Adidas on its latest drop for its ZX 2K Boost shoe. IMGN did not disclose how much its services cost.

Last week, Attn launched its own TikTok Studio with Unilever, Clorox, Google and other brands already signed on as initial clients, and in March, British culture publication The Face introduced a TikTok creator agency.

Power of Gen Z

Gen-Zers hold an estimated $143 billion in spending power, according to a 2018 pre-pandemic study from agency Barkley. And TikTok, which revealed in 2020 that it has about 100 million monthly active U.S. users, continues to be a platform where Gen Zers and millennials spend their time and purchase items. An Ad Age Harris Poll study found that 57% of millennials have purchased items featured on TikTok, while 38% of Gen Zers have done the same.

While this makes the platform highly attractive for brands, they have trouble connecting to Gen Zers, which Mallin, who previously served as managing partner and head of content and experience at WPP GroupM’s Wavemaker North America, describes as strong “bullshit detectors." Mallin says IMGN's offering allows brands to be nimble and move “at the speed of social." This is an area, he says, brands might not be able to replicate in-house or find at traditional agencies, even social-born ones that could be spread too thin. 

“It’s really hard for agencies to suddenly find a new gear and change what their production processes are, which are usually around producing spots for television," Mallin says. "Some agencies have evolved to create more social content, but even in that case, what it takes to produce something for Instagram and what does well there, is very different than what does well on a platform like TikTok.”

Even traditional publishers are leaning further into TikTok, beyond sponsored editorial and branded content one-offs. Condé Nast, for instance, is planning a partnership with TikTok for later this year, though details remain under wraps for now.

"TikTok's commercial model strikes an interesting balance between paid and organic, which isn't always the case on other platforms that make it challenging to scale organic posts,” says Craig Kostelic, chief business officer, U.S. advertising revenue and head of global advertising solutions at Condé Nast. “This creates a number of interesting opportunities to sit down with our editorial teams and marketing partners to collaborate on content experiences. I think we'll see marketers begin to work with content creators much further upstream, taking editorial and commercial collaboration to a different level." 

Agencies hire in-house creators

At ad agencies, rather than launching specific TikTok studios or consulting arms, teams are building out their TikTok muscle with new hires, many of which are creators themselves with mass followings on TikTok.

VaynerMedia, which is working with TikTok on its U.S. marketing strategy, is bulking up its own teams for its clients with in-house "creator” roles. For these creators, their job is to understand the culture on platforms, discover consumer insights and “create content that the internet wants to see,” says Rob Lenois, VaynerMedia's chief creative officer. TikTok is a prime driver for the content. The agency has hired 30 creators so far and is currently searching for more.

“Being successful at TikTok breaks every traditional rule for how social content is managed today," says Lenois. "So, re-plumbing our organization and that of our client partners to re-frame how they approach the platform to be relevant at the speed of culture is far more important than deciding to go all-in on TikTok."

Agencies like The Martin Agency, Dagger, 360i, Quantasy and Barkley are also hiring TikTok content creators to keep up with demand. “We believe this kind of boots-on-the-ground expertise is now vital to be able to best serve brands in the space,” says Jessica Neville, group strategy director of content at Dagger.

Theresa, Myrill, VP,  Fuel and social media, at Kansas City-based shop Barkley, says TikTok has become its “main social and content focus” as it’s a “direct pipeline to the purchasing power of Gen Z.” And Los Angeles-based Quantasy has hired TikTok influencers with more than 3 million followers, says David Rodriguez, exec VP and head of client services. 

In some cases, agencies’ physical spaces are evolving to do more work for TikTok. The Martin Agency, which has created TikTok campaigns for brands like Hanes, UPS and J Balvin, Geico and Old Navy, is evolving its space for its SuperJoy production arm in Richmond, Virginia, to become more of a “makers playground” where content can be created more efficiently and effectively, says Sharon Panelo, VP, group strategy director, social studio at The Martin Agency.

TikTok itself has been working to build relationships with established agencies and publishers. Earlier this year, the platform announced a global partnership with WPP, which includes WPP agencies getting early looks at ad products and the development of marketing technology to fit the app. It also partnered with IPG Mediabrands to connect brands with creators.

TikTok is currently on the hunt for a head of creative agency partnerships to build agency relationships, who will also “drive strategic initiatives across the ‘Big 6’ holding companies with the focus of moving TikTok from vendor to partner status,” according to the job posting.

TikTok set up a team to work with publishers in 2019, and several have worked with the platform around specific projects. For instance, TikTok has worked with Attn on a seven-figure deal to produce videos about social change for its “TikTok for Good” channel, and has funded original programming from publishers like the public health series "Viral" out of Group Nine’s NowThis.

New kids on the block

Meanwhile, a suite of agencies that are focused on reaching Gen Z audiences have sprung up, bringing more competition to established media companies and ad agencies. Movers+Shakers, Abacus Growth, JUV Consulting and Fanbytes continue to grow along with brand interest in reaching Gen Zers, especially for TikTok campaigns.

Movers+Shakers, originally created in 2016 to make musical campaigns for YouTube, Instagram and Facebook, has gone all-in on TikTok, benefiting greatly from being a first mover on the platform in 2019. Now in 2021, the agency has surpassed 100 billion TikTok campaign views with big-name clients like E.l.f Cosmetics, Amazon, Johnson & Johnson, Under Armour, Disney and more. It recently launched a reality show with E.l.f. called “Eyes.Lips.Famous,” based off the brand's popular ad campaign. The agency has invested heavily in educating the industry about the power of TikTok, says Evan Horowitz, CEO at Movers+Shakers. “Over the past two years, thousands of marketers have attended our TikTok webinars and read our e-books on TikTok strategy and virality.”

TikTok creators, discovering how much power they really have as they receive direct requests from brands, have begun to launch their own Gen Z agencies as well. This month, TikTok creator Josh Richards, who boasts more than 25.3 million TikTok followers, and Griffin Johnson, who has 10.5 million TikTok followers, have partnered with Erik Huberman, founder and CEO of Hawke Media, to launch HawkeZ, a Gen Z-focused agency that offers consulting and influencer pairing. The agency just signed its first client: Crocs, one of Ad Age’s hottest brands of 2020.

“There was no better time than the present to launch HawkeZ due to the intensely growing presence of the Gen Z demographic,” says Richards. “They are consuming media through so many different channels at rates far greater than anyone could have ever imagined. I thought it was time to bring my expertise in reaching that demographic to an agency that would focus heavily on influencing the brands Gen Z cares about for years to come.”