TikTok’s Business Strategy
Jan 20 2023

We frequently mention businesses like Facebook, Instagram, Twitter, and LinkedIn when we discuss social media. But during the past few years, a different business has become a major force in the social media market. An application made by this firm is renowned for having high levels of user engagement. TikTok is the application that is being discussed.

TikTok has completely overtaken the social media landscape. This is due to the fact that this program is used to produce content by millions of users. The younger target audiences for this application are quite successful. Bytedance, the Chinese business that developed TikTok, has thus become the most valuable start-up in the whole globe. About $280 billion is the estimated worth of the business.

TikTok appears to be a tool that is not just for fun, despite its high levels of user interaction. The majority of people worldwide are unsure of how TikTok makes money or how it came to be one of the most valued applications worldwide.

In this article, we’ll outline the TikTok business strategy that enables it to generate sizable profits.

Streams of Income from TikTok

The way TitTok makes money is by letting users make, watch, and distribute 15-second videos. Since TikTok gives users a variety of background filters and sounds to choose from, these videos can be made to be catchy. More than 315 million people have downloaded and installed the app worldwide!

TikTok features a number of potential revenue sources even though, from the user’s perspective, it is a free app. TikTok has created a number of different types of adverts that it utilizes to monetize its service. In the article below, some of the most well-known revenue streams are listed:

In-Feed Video Ads: TikTok, like other social media juggernauts, gets the majority of its funding from adverts. If businesses want their consumers to watch in-feed video adverts, TikTok will charge them money. Users must watch these advertisements in between viewing the free user-generated content on the program. It functions precisely like adverts on other websites, including YouTube.

Brand takeover advertisements: TikTok has been quite creative in the way it lets businesses promote. They invented the idea of brand takeover advertisements. An interactive video ad is displayed under this advertisement as soon as a user launches an application. This advertisement attracts more attention and leaves a deeper impression because it appears as soon as the user launches the program. These advertisements aid TikTok in increasing income for its parent firm.

TikTok offers the ability for users to express gratitude for the content produced by other users by giving them financial gifts through in-app purchases. To do this, TikTok coins are sold. These coins are available in a range of values, and users can receive them as gifts. After deducting a set commission, TikTok distributes the remaining funds to its users. For the business, in-app purchases have become a significant source of income.

TikTok also offers distinctive branded effects to many of its sponsors. Customized stickers and augmented reality filters are a couple of these. Users may include this in their films, aiding in the creation of viral content. The main purpose of these branded effects is to advertise films and other television programs. This is due to the fact that popular dialogues or hook steps make it simpler to create filters.

In-feed video advertising is similar to top-view commercials. They do not, however, show up as material on the user’s feed. Instead, they interrupt the content to capture the viewer’s full attention. These advertisements run for longer times. Some of these commercials run for 60 seconds. TikTok makes a significant amount of money from advertisers thanks to top-view ads.

Branded hashtag challenges are a technique for businesses to produce viral content. These businesses produce some original material before paying TikTok to increase the visibility of their hashtag among all users. As a consequence, more consumers start seeing the item in their feeds. The likelihood of these users interacting with this material increases. In order to achieve the company’s goal of developing a viral advertising campaign that looks natural and benefits the company more than conventional advertisements, some other users are likely to produce content that is similar to the company’s.

TikTok has been mum on how much money it makes. The business does not divulge a lot of information. Additionally, because it is situated in China, there is even greater secrecy because it is unknown what information is provided for regulatory purposes. However, other projections indicate that TikTok receives the majority of its income from China.

According to estimates, China accounts for 80% of the company’s income. The business is currently attempting to diversify into the international market. The business has a tough task ahead of it because it has been banned in a number of nations amid concerns that it could be sharing user-generated data with the Chinese government.

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