Time is Ticking for TikTok

With a record number of Americans out of work, and even more working from home, it’s no surprise that social media use is up in the United States. According to a survey by Business Insider, nearly 70% of Americans are spending at least one additional hour on social media daily due to coronavirus restrictions, with nearly 20% spending more than three additional hours online.[i]

In truth, “social media” might be too broad a moniker for the trend. For many months now, TikTok has become the darling of the American public, logging more than 315 million installs in the first quarter of 2020 – not to mention the millions of installs since the initiation of mandated lockdowns.[ii] The app’s popularity is likely due to the positive nature of content shared on the platform and the sense of community it brings to users in the time of social distancing (when everyone could use a little more connection).

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According to TikTok’s website, “Tiktok is the leading destination for short-form mobile video.” Their mission is to inspire creativity and bring joy. The company seems to be delivering on that promise, recently announcing a strategic partnership with the New York Yankees to help bring “America’s favorite pastime” to fans during the pandemic. They also recently introduced TikTok for business, which has since launched new solutions specifically aimed at connecting small businesses and growing the community.[iii]

Many companies have tried to reach large follower bases on TikTok by paying creators to use specific songs, wear branded clothing, and directly promote products in their videos.[iv] Some TikTok stars earn seven figures through marketing on the app; last year, top TikTok star Addison Rae Easterling earned $5 million.[v]According to an article for Forbes, there are five main ways for TikTok creators to make that kind of money:

  1. Influencer Marketing – This is exactly what you’d expect: brands pay influencers to place and promote their products. Mucinex did this successfully in the fall of 2019 – lead-up to flu season.
  2. Sponsored Content Posts – For these types of sponsorships, creators will create content for the company’s TikTok account while the company sponsors content on the influencer’s account. Loren Gray, who has over 45 million followers, produces sponsored contents posts as part of a major deal with Revlon.
  3. Branded Merchandise – When a TikTok account becomes big enough, creators might start creating and selling their own branded merchandise. 
  4. Launch Your Career – Many artists begin by gaining a loyal fan base for their art – whether that be visual art, music, or even acting, if they can corner a following first, it’s easier to launch a creator’s career in their preferred field. 
  5. TikTok Consulting – For those creators who have nailed the other four tactics, it’s possible to make a pretty penny by selling their insights to other creators looking to do the same.[vi]

There’s a lot of money to be made on TikTok, but all is not perfect for the creators. TikTok has been under fire for some time for failing to protect the privacy of its users. It has recently been reported that TikTok circumvented a security rule in Google’s Android operating system. The app collected unique data from millions of devices that allows the app to track users online. Users were not notified, and they weren’t allowed to opt out.[vii]

For similar reasons, President Trump has issued an executive order banning the app in the US unless it is bought out by an American company. Microsoft has been in talks with TIkTok about a full buy-out, and according to the Wall Street Journal, Twitter has now entered the fray as a potential buyer. The ban will take effect on September 15, 2020 unless a deal is made before then.[viii]

This comes on the heels of Facebook’s Instagram launch of Reels, a new feature that allows users to share short-form video. Facebook reportedly offered top TikTok creators up to six figures to join and promote Reels to their existing follower bases.[ix]

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Photo by Ketut Subiyanto from Pexels

India had 200 million TikTok users – twice as many as the US – before the country banned the app in the aftermath of a violent border clash with China. Instagram launched Reels in India after the ban took effect, but self-professed TikTok addicts say that nothing has been able to replace the app. Losing India was a huge blow for TikTok. Their 700 million internet users make it one of the world’s largest digital markets, second only to China.[x]

So, what happens to the community now that the platform may be disappearing in just a short month? The only thing that’s for certain is that the future is not. When Trump announced the ban on TikTok, users began livestreaming and posting videos asking their fan bases to follow them on other social media platforms, such as Instagram.

Some users explored the idea of work-arounds for the ban, such as trying to trick servers to make it seem like they’re accessing TikTok in a country where it’s not banned. Many users have been building their TikTok followings for months, carving out their own careers in social media and influencing.

“We’re all going to stay together as a family,” said Grandma Sandy, an older TikTok user with 2.5 million followers on the platform. “No matter what happens we’re all going to continue on, all of us.”[xi]

Questions for Marketing Managers to Consider:

  • If TikTok is bought out by an American country, what kind of opportunities does that present for future influencer marketing and sponsored content posts?
  • Facebook is attempting to create a direct competitor to TikTok with Instagram Reels. If you were part of their marketing team, how would you recommend the legacy social media network promote their new feature?
  • If an American buyout is not completed by the time the ban takes effect, what will happen to the influencers who have built their businesses on TikTok?

[i] https://www-statista-com.ezproxy.rollins.edu/statistics/1116148/more-time-spent-social-media-platforms-users-usa-coronavirus/

[ii] Lee, Wendy and Brown, August. (2020). Amid the coronavirus lockdown, TikTok gives hope to L.A. entertainers. Los Angeles Times. Retrieved from: https://www.latimes.com/entertainment-arts/business/story/2020-05-06/tik-tok-expansion-los-angeles-culver-city-brittany-broski-drake

[iii] https://www.tiktok.com/about?lang=en

[iv] Choi, Euirim. (2020). Facebook Offers Money to Reel in TikTok Creators. The Wall Street Journal. Retrieved from: https://www.wsj.com/articles/facebook-seeks-to-reel-in-tiktok-creators-raising-stakes-in-social-media-rivalry-11595928600

[v] Frazier, Liz. (2020). 5 Ways People Can Make Serious Money on TikTok. Forbes. Retrieved from: https://www.forbes.com/sites/lizfrazierpeck/2020/08/10/5-ways-people-can-make-serious-money-on-tiktok/#502dc1e65afc

[vi] Frazier, Liz. (2020). 5 Ways People Can Make Serious Money on TikTok. Forbes. Retrieved from: https://www.forbes.com/sites/lizfrazierpeck/2020/08/10/5-ways-people-can-make-serious-money-on-tiktok/#502dc1e65afc

[vii] Poulsen, Kevin and McMillan, Robert. (2020). TikTok Tracked User Data Using Tactic Banned by Google. The Wall Street Journal. Retrieved from: https://www.wsj.com/articles/tiktok-tracked-user-data-using-tactic-banned-by-google-11597176738

[viii] Landi, Martyn. (2020). Twitter ‘interested in TIkTok buyout.’ Yahoo! Finance. Retrieved from: https://uk.finance.yahoo.com/news/twitter-interested-tiktok-buyout-115812705.html?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAL3Lu1mg6VONtFoNgMlaMlih23Lm5QMk_beTrXk6nO2HrT-zKAZ168bfBQgCEVtRqL5lq7qrYOasFvTzWXBGyJydRYtzfLm-CK_Fved71iBGHMAF8vTRzl5wdV9SvsKhZJGRgTzlcnQUj6KVqsO0GBaQgW_QOyINQQFR6LKPflgu&_guc_consent_skip=1597374832

[ix] Choi, Euirim. (2020). Facebook Offers Money to Reel in TikTok Creatos. The Wall Street Journal. Retrieved from: https://www.wsj.com/articles/facebook-seeks-to-reel-in-tiktok-creators-raising-stakes-in-social-media-rivalry-11595928600

[x] Iyengar, Rishi. (2020). This is what it’s like when a country actually bans TikTok. CNN Business. Retrieved from: https://www.cnn.com/2020/08/13/tech/tiktok-ban-trump-india/index.html

[xi] Yurieff, Kaya. (2020). How TikTok users are reacting to Trump’s possible US ban. CNN Business. Retrieved from: https://www.cnn.com/2020/08/01/tech/tiktok-ban-reactions/index.html

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