How TikTok Competes for SMB Ad Spend

Tim Cross 03 April, 2023 

One of the advantages for the international tech companies in building their ad businesses is their ability to compete for spend from small and medium-sized businesses (SMBs) – spend which has historically largely been out of reach for broadcasters and news publishers.

These brands’ have small ad budgets which need to be carefully spent, and tech companies have traditionally been the safest bet. Google for example lets businesses specifically target relevant keywords, reaching in-market buyers. Meanwhile Meta’s bank of user-provided first-party data covering age, location, and interests, enables fairly reliable and accurate audience targeting.

But while each individual company’s ad budget is small, SMBs as a whole represent a sizeable opportunity. And as TikTok has rapidly scaled up its ad business over the past few years, SMBs have been a major focus for the short-form video platform too.

“SMBs are really the backbone of the global economy,” said Lisa Friedrich, who heads up TikTok’s SMB-dedicated team in EMEA. “So as they thrive more and more on TikTok, and can ultimately run ads on our platform to amplify their message, target the audience they want to reach, and connect with new and existing customers through our community, we think that’s a really powerful opportunity.”

But what is TikTok’s specific hook for SMBs?

To start, it shares elements of both Meta and Google’s advantages. Like Meta, it has access to user-provided login data, and can layer in interest-based data through user behaviour. And, as has been widely reported, younger audiences are increasingly using TikTok for search.

A more unique advantage for TikTok comes on the creative side. SMB campaigns run through Google and Meta tend to be limited to display (and obviously search on Google), as it’s hard for smaller businesses to put together quality video creative which will work well on those platforms.

But as anyone who’s used the platform will know, TikTok’s aesthetic is largely based around authenticity and spontaneity – videos usually give the impression that the creator has just picked up their camera and started filming. Clips are often recorded with a user’s front-facing camera, and edited with TikTok’s in-app tools. And this aesthetic, which is easier to replicate without the need for a big production team, works well for ads too.

Indeed, many SMBs start out on TikTok by creating videos for their own channels, looking for organic reach. And as they transition onto paid ads, the same style of content they’ve already been creating can be used for their paid campaigns.

“Very honestly, if you as a business have used TikTok as a creator, you’ll obviously be more comfortable with the format of short mobile video,” said Friedrich. “So when you take the step to amplify your message, it’s so much easier because the way we run ads is very germane to the experience. We love authenticity and we want meaningful connections through content. So for the creative and the content, it’s just a natural progression from what you’re doing on your organic profile.”

And for SMBs in particular, simply talking honestly about their products and work can be an effective tactic.

“I have been a small business entrepreneur in my past life, and I know how hard that is, and the blood, sweat and tears it takes to be a small business owner,” said Friedrich. “And some of our most amazing stories have come from entrepreneurs who talk about the work they put into their products, and some of the challenges they face, and then the community rallies around them. I think that is the benefit for small businesses, they have that flexibility to talk about their real world experiences.”

TikTok 101

When it comes to cultivating SMB business, a lot of TikTok’s efforts have been based around making this transition from organic content to paid advertising as smooth as possible. Friedrich says that TikTok already has a big community of SMB owners on the platform; the ‘smallbusiness’ hashtag has over 90 billion views. The remit of TikTok’s Dublin-based SMB team is to help these small businesses be successful.

Part of the solution has been making sure TikTok’s ad tools are accessible to all clients, regardless of their experience in paid advertising.

As previously mentioned, many SMBs will already be familiar with how to create a TikTok, and the creative tools available to advertisers are very similar to those available to regular users. But there are specific tools for businesses designed to simplify the process – for example business accounts have access to a library of licensed commercial music, meaning brands don’t have to worry about copyright infringement.

And on the campaign setup side, Friedrich again says that the workflow has been designed to be straightforward for inexperienced marketers. “We’ve intentionally made it very easy to get your first campaign up and running,” she said.

Once SMBs have gotten started, a big focus is on education, helping smaller businesses better understand some of the more advanced capabilities around targeting and measurement.

On the targeting front, age and demographics are two of the more popular parameters for small businesses, alongside device, location, and behavioural targeting. But part of the SMB team’s job is helping SMBs understand which targeting parameters are most appropriate for their objectives.

“We have a sales team that works to partner with SMBs to help them get more sophisticated and more in depth depending on their objectives, for example whether they’re looking for conversion optimisation, or brand awareness,” said Friedrich.

TikTok’s ad tools are all self-serve, so the workflow is designed to guide businesses to the most appropriate ad products. But this list of products is growing all the time – there’s also shoppable ads, hashtag-based targeting, and a creator marketplace, all of which will suit specific small businesses. So the challenge for Friedrich’s team is to make sure SMBs are able to navigate all these options.

“We’re always talking about what we need to be creating for SMBs to effectively grow their businesses and connect within our community in a meaningful way,” she said. “So for us, it’s about always making sure that we’re listening to our clients. We get feedback from advertisers and businesses all the time, and are asking how we can make their lives easier. Do we have enough educational material? Does it make sense? Do we have the right objectives? So we always have their feedback in mind when we’re creating something new.”

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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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