TikTok—the social video app famous for launching global trends—has only been in the advertising game since 2019, but it’s already pulling in record-breaking ad revenue year over year.
Among the social media giants, TikTok’s ad revenue is in thetop five, overtaking Twitter and Snapchat. And it continues to grow. TikTok ad revenue is expected toreach$13.79 billion per year by 2026.
Featured on one of the most popular apps among young users,TikTok adsare attractive to companies and advertisers alike looking to reach the platform’s growing base.
TikTok ad revenue in context
TikTok is thefastest growingmedia brand globally, with a 215% brand value growth rate as of 2022. By number of users, TikTok lands insixth place, but takestop spotin engagement rate, proving it’s a social media app that can run with the big players.
With increased competition in the ecommerce landscape, marketers are looking for new ways to reach audiences and new channels to sell products.Social commerceis a growing phenomenon, with more brands selling directly to consumers via the apps they’re already using. TikTok is already a key player with consumers, who rank the platform third—behind Meta powerhouses Instagram and Facebook—for best social commerce experience.
In total, social platforms are collectivelyexpectedto generate $262 billion in ad revenue by 2028. TikTok continues to take a bigger slice of that pie. In 2022, TikTok ad revenuestopped$9.9 billion, an increase of 155% over the previous year.
As one of themost popular social media apps, it’s no wonder TikTok’s ad revenue is seeing massive growth. Brands looking to make genuine connections with potential customers should consider aTikTok marketingstrategy including a mix of organic content and paid ads.
What you need to know about advertising on TikTok
Advertising on TikTok comes with its own unique benefits and challenges. Brands shouldn’t apply the same marketing tactics that work on other platforms, as these could fall flat with the TikTok audience. Here’s what to know before you start advertising.
TikTok is the place to advertise to gen Z
TikTok boasts more than one billion users over 18 years of age as of 2023, but it’s the platform’s particular demographics that are attractive to many brands and advertisers. Of that number,38.5%are between the ages of 18 and 24, falling into the covetedGen Zaudience of tastemakers and trendsetters. That’s millions of potential customers for your business.
TikTok users don’t mind ads
TikTok users largely don’t mind ads—they even like them.According to research, two out of three TikTok users described ads on the platform in positive terms like “fun and engaging,” “trendsetting,” and “inspiring.” This is likely because TikTok ads don’t feel like ads. Marketers understand that the platform prizes authenticity and human-centered content. Ads that work best are those indistinguishable from users content in the feed.
Consumers are flocking to TikTok for product discovery
The rate at which TikTok’s ad revenue is growing is unsurprising, considering the platform’s hold onconsumer trends. Product discovery is huge on the platform, with younger buyers looking for new brands and products on TikTok before turning to search engines. Two-thirds of shoppers polled inone surveysaid they purchased something they saw on TikTok—even if they weren’t actively shopping.
TikTok makes this easy for brands, tying itsTikTok for businessfeatures to its ad platform and ecommerce tools. Switching to a business account gives brands full access to a suite of marketing and ecommerce options. Users can buy directly from their favorite brands with TikTok’s native shopping features or shoppable ads powered by Shopify.
Connect with shoppers on TikTok
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Start selling on TikTokTikTok Pulse makes advertising even more meaningful to users
In 2022, TikTok launched TikTok Pulse, an advertising feature that allows brands to pair ads with the most engaging content on the For You page. According to TikTok’s own data, TikTok users are2.6 times more likelyto interact with Pulse ads compared to other ads on the app. These earlyTikTok statisticson Pulse’s performance can only have a positive impact on the company’s ad revenue.
There’s a reason brands are spending on TikTok
TikTok’s rapidly growing ad revenue is a signal that the social media platform is doing the right thing to attract brands’ ad dollars. In fact, 43% of marketersreportedplans to increase use of TikTok for social media marketing in the future. To do so effectively, brands should understand the platform and audience before investing in ads and usingTikTok for ecommerce.
The mostviral content on TikTokisn’t the most polished. Challenges, funny content, authentic human-centric videos, and trending sounds all have viral potential on the short form video app. Advertising is no exception. Find your voice, tell a compellingbrand story, and create the kind of content yourtarget audienceexpects.
TikTok advertising revenue FAQ
How much advertising revenue does TikTok generate?
In 2022, TikTok ad revenuestopped$9.9 billion, an increase of 155% over the previous year. The platform continues to grow at a rapid rate signaling its ad revenues will only continue to climb.
How does TikTok ad revenue compare to that of Facebook and Instagram?
In terms of ad revenue, Meta’s Facebook and Instagram stilldominate, with TikTok coming in sixth place. TikTok continues to gain ground, surpassing Linkedin and Snapchat ad revenues and catching up with Twitter.
Are TikTok ads worth it?
TikTok's ad revenues are a signal that the app that launches challenges and creates viral moments is a good bet for advertisers. More brands are diverting their advertising dollars to the platform, and others are expected to follow. That’s because TikTok ads are still accessible to smaller brands that can create authentic videos with viral potential.
