Social media apps often give some free media to brands to test new ad products and campaigns, but TikTok’s giveaway is large by most standards, advertisers said. “They’re going after brands that are not fully invested on TikTok yet, or they’re agnostic on the platform,” said one marketing executive, who spoke on condition of anonymity. “These are for large advertisers. These ad credits are pretty significant.” This person said the ad credits for TikTok could top six figures, other advertising execs said they are typically around $50,000.
A TikTok spokesperson said the platform offers credits based on individual clients’ campaigns, where a certain amount of spend unlocks auction ad credits for programmatic ads when brands bid on inventory.
Ad Age also received a copy of a recent email sent by TikTok ad sales reps to marketers, which showed that the company is “evolving” how hashtag challenges work. Hashtag challenges are when a brand promotes a trend, propelling attention to a campaign, and are some of TikTok’s most prominent and expensive ad products. The price of challenges started at $150,000 for six days.
TikTok has a complex ad platform, with a variety of products like video ad takeovers that take up the whole screen and options for brands to partner with creators. TikTok is seen as an effective marketing platform, but it’s also difficult for brands to decipher its unfamiliar culture. TikTok teenagers have a unique style of video consumption, one that does not lend itself to easy commercial interruptions. TikTok has tried to teach brands that style of video, and to build ad products that are better suited for the trends, memes, dancing, music and editing tricks that come innately to TikTok users. TikTok also is trying to impress upon brands that it can be a safe atmosphere, even if some user-created videos are risqué or involve sensitive subjects.
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TikTok is owned by Chinese-based ByteDance and is expected to hit $6 billion in ad revenue in the U.S. this year, according to eMarketer, up from $2 billion last year. At the same time, TikTok is casting a larger presence in the ad world, participating in major industry events such as the digital NewFronts in May. It is also sending its ads team to Cannes this month, marking its first official presence at the ad festival.
In recent months, TikTok has made substantial changes to the ad platform. TikTok made a string of announcements about new partnerships with marketing technology companies, including social analytics firms like Sprout Social and Sprinklr, and measurement firm IRI.
“There is a lot they’re cooking up, and a lot they’re evolving,” said one executive from a new TikTok marketing partner. “TikTok is being very iterative on its ad products.”