As one of the fastest-growing social media platforms, TikTok has attracted a lot of attention since its launch in 2016. The app has amassed over 1 billion active users worldwide, with an estimated 800 million users daily. TikTok has become a cultural phenomenon, with many people using the app as a source of entertainment, expressing their creativity, and even building a career in influencing from it.
However, it’s not just users who have been benefiting from TikTok’s success. Like every business, the social media platform has monetization strategies that have contributed to its revenue generation. In this article, we will look at some of the behind-the-scenes revenue-generating strategies of TikTok.
Advertising
The primary source of revenue for TikTok is from advertising. TikTok offers a variety of ad formats that allow brands to reach their target audience through various placements on the app. Brands can choose to create brand takeovers, which are full-screen ads that appear when a user first opens the app. In-feed native ads appear as sponsored posts within a user’s newsfeed, while branded hashtag challenges encourage users to create and share content with a specific hashtag.
Live-streaming
TikTok’s live-streaming feature has become increasingly popular, with many celebrities and influencers turning to live streams to connect with audiences. Live streams allow users to interact with their favorite creators, ask questions, and participate in challenges. Revenue is generated through the purchase of virtual gifts, which users can buy and send to creators during live streams. The virtual gifts are purchased with real money, and TikTok takes a share of the profits.
In-app purchases
TikTok also offers in-app purchases for their users. These purchases are mainly used to buy virtual currency that users can use to buy additional features such as emoticons, stickers, and filters. Additionally, TikTok offers premium features for users who subscribe to the platform’s premium service. The premium service offers unlimited access to select content, uninterrupted content, and ad-free videos.
Sponsorship
TikTok has also developed influencer marketing partnerships, allowing brands to collaborate with choice creators as part of their social media strategies. These partnerships may include sponsored posts or curated content activities where TikTok personalities promote products or services to their audiences in exchange for compensation.
TikTok has been successful in creating opportunities for both users and brands to generate revenue. With a seemingly endless stream of fresh content, the platform shows no signs of slowing down anytime soon, leaving many with the hope that it will remain a vital vessel and marketing method for advertisers for a considerable time.