TikTok modus operandi: Here's how this controversial App is growing strong in India
TikTok: The short video ad spending will reach $6.5 billion in 2020 from $2.1 billion in 2018, growing at a compound annual growth rate (CAGR) of 25.5 per cent in that period.
Chinese short video-making app TikTok has witnessed a phenomenal rise in India due to a strong local network, giving marketers a platform to reach users in small cities. Following TikTok`s success, short videos are gaining a lot of attention again after the winding up of Twitter-owned Vine and China-based Kuaishou in recent times, according to global market research firm Forrester.
TikTok has witnessed success despite being pulled-up by the law enforcement agencies and experts for vitiating the digital atmosphere in the country. The short video ad spending will reach $6.5 billion in 2020 from $2.1 billion in 2018, growing at a compound annual growth rate (CAGR) of 25.5 per cent in that period, said an IANS report.
The growth will come from increased revenue per user, as these apps have already acquired a huge user base, said the report, adding that competition among the short video apps for new users will also increase.
"In India, younger consumers living in metro and small cities use TikTok, which gives marketers a platform to reach users who are not easy to tap otherwise. SBI Life, an insurance company in India, did a campaign for its app `YONO` to woo youngsters in small towns and garnered more than seven million views in a week," Meenakshi Tiwari, Forecast Analyst at Forrester, told IANS.
Further, Tiwari is quoted as saying "TikTok`s success among non-Chinese consumers is partly due to its ability to adapt to domestic markets from a content and cultural point of view. In each country, TikTok has its own local team that plans and monitors content specifically for younger demographics; this has attracted a high number of active users on its platform."
Notably, TikTok has 700 million users globally, out of which nearly 200 million are in India. The overall sentiment about short video is very positive, but the future of these types of apps is uncertain, the analyst said.
According to Tiwari, "TikTok`s success may be short-lived, given the nature of the content and the history of short video apps like Vine, which eventually was discontinued in 2017, or Kuaishou, which took five years before it started monetizing the offering."
"On the other hand, given consumers` shrinking attention span and the growing amount of media content they are bombarded with, the short video format seems like a perfect medium for brands to reach consumers. We expect this market to grow for the next few years," Tiwari added.
According to Forrester's estimate, short video ad spending for the key Asia Pacific markets of Australia, China, India, Japan and South Korea will be $4.7 billion in 2019, with China accounting for 99 per cent of the spending.
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Non-Chinese markets will gain momentum after 2019. TikTok advertising offers a good platform for brands that want to align with young, female consumers in the low to middle income group.
Apart from its popularity, the App's access to hard-to-reach audiences, the ad cost is still lower than that of the established social giants. Tiwari informed "Spending $14,500 on a campaign will get you roughly 105,000 impressions onWeChat, 4.4 million impressions on Weibo, and 6 million impressions on TikTok."
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