Ad spend on TikTok exceeded $1 billion in the final quarter of 2023, according to data from MediaRadar, as advertisers flocked to the video-sharing platform.
The advertising intelligence firm analysed ad spend on TikTok for 2023, which reached $3.8 billion across the full year. The data showed that ad spend climbed each quarter, from $805 million in Q1 to $1.2 billion in Q4, an increase of 43 percent.
According to MediaRadar, nearly 30,000 companies advertised over 35,000 brands on TikTok during 2023. TikTok was therefore able to attract average ad spend of $954 million per quarter, and $318 million per month. November saw the highest spend at $426 million.
The research revealed that media and entertainment advertisers accounted for 30 percent of the total, spending more than $1 billion on TikTok in 2023. This was followed by retailers ($500 million) and tech ($314 million). The top five advertisers were Amazon, Apple, Comcast, DoorDash and Disney, which spent a combined $284 million on TikTok over the year.
“TikTok’s massive growth in the last few years provides a key outlet to reach the highly-engaged, often young audiences as they are scrolling through their feeds,” said Todd Krizelman, CEO and co-founder of MediaRadar.
The billion-dollar bounce
The uptick is in line with a digital ad market rebound in 2023, with US ad spend returning to growth in the second half of the year. The main recipients of this bounce were Meta, Alphabet and Amazon, who saw their collective ad revenues jump more than $17 billion YoY in Q4.
But considering the unassailable share of the market dominated by the three tech giants, TikTok’s growth is not to be taken lightly. Its Q4 ad sales were hot on the heels of Snap, whose quarterly revenues totalled $1.36 billion. And although the figure represents a 5 percent YoY increase, it also marks Snap’s sixth consecutive quarter of single-digit growth or sales declines. Conversely, TikTok has seen consistent double-digit YoY growth in its revenues.
And the ByteDance-owned company looks set for further growth this year, with marketers upping their spend on TikTok at the expense of X, according to WARC’s research. Yet there remain questions around TikTok’s sustainability, having been banned in several countries including India, one of the world’s fastest-growing major economies with a young, tech-savvy population.
The company is also being investigated by the European Commission over potential breaches of the new Digital Services Act, raising concerns over the company’s advertising transparency, addictive design and protections against harmful content.
Meanwhile the Chinese business is feuding with Universal Music Group (UMG), which has pulled its music library from TikTok after licensing negotiations fell through. “It will be interesting to see how the unresolved fallout with UMG affects advertising on the platform and if the music restriction drives away users who are no longer able to access their favorite artists,” said MediaRadar’s Todd Krizelman.
