Social video platform TikTok’s ad revenues this year will surpass those of Snapchat and Twitter combined, according to research firm Insider Intelligence, as the short-form video app continues to compete for ever larger slices of brands’ ad budgets.
This would represent remarkable growth from TikTok, given that its ad business made less than Snapchat and Twitter individually last year. Insider Intelligence forecasts that TikTok’s total ad revenues this year will top $11 billion, more than triple its ad earnings from 2020. Twitter meanwhile is expected to bring in $5.58 billion from ads, and Snapchat’s forecast is $4.86 billion.
Perhaps even more remarkably, Insider Intelligence predicts that by 2024, TikTok will have almost caught up with YouTube. By that point, the analyst firm predicts that TikTok’s ad revenues will sit around $23.58 billion, just behind YouTube’s expected figure of $23.65 billion. This would give each social platform a 3.1 percent share of the global digital ad market.
Debra Aho Williamson, principal analyst at Insider Intelligence, said this growth is being driven by TikTok’s raw reach mixed with its unusually high engagement rate from users.
“The amount of time users spend on the app is extraordinary,” said Williamson. “It has moved well beyond its roots as a lip-syncing and dancing app; it creates trends and fosters deep connections with creators that keep users engaged, video after video. Advertisers want to reach a passionate, dedicated audience, and TikTok can deliver that.”
Williamson added that TikTok’s push into social commerce, whereby it pairs brands with appropriate creators, is proving successful in driving “enormous demand” for products.
Weathered the storm
Given how much attention TikTok has received from the ad industry over the past few years, it can be easy to forget how young its ad offering is.
Less than three years ago, VideoWeek was asking whether TikTok would be able to avoid the pitfalls that sunk Vine, the Twitter-owned spiritual predecessor to TikTok. At the time, the platform had only begun quietly testing ads.
Fast forward to today, and TikTok has weathered its early storms, as rival social platforms have aped its vertical scroll short-form video format. TikTok now has a comprehensive set of marketing tools united under its TikTok for Business brand. And any initial doubts about the strength of TikTok’s ad offering have clearly dissipated as marketers have flocked to the platform.
And it looks like there’s still plenty of room for growth. More than half of TikTok’s revenues this year will come from the US, and nearly nine percent from the UK, suggesting there’s still plenty of opportunity to rapidly grow ad revenues in other markets.
