TikTok Seeks To Generate More Ad Revenue By Capturing Major Brands

TikTok has an advertising problem. On Tuesday, the company rolled out a new plan to help deal with it.

For years, homemade videos that function more or less like commercials have received hundreds of millions of views on the app — and in many of those cases, TikTok hasn’t earned a dime.

In June, the singer Walker Hayes posted a video of himself dancing with his daughter to “Fancy Like,” his country pop song that prominently name checks the restaurant chain Applebee’s.

The clip inspired copycat videos and led to an Applebee’s television campaign featuring the song.

Last year, Nathan Apodaca, a TikTok user who posts as 420doggface208, went viral with a clip showing him riding a skateboard while swigging Ocean Spray Cran-Raspberry juice to the strains of Fleetwood Mac’s “Dreams.”

That video racked up more than 80 million views, and Ocean Spray showed its gratitude by sending Mr. Apodaca a cranberry-red pickup truck filled with jugs of Ocean Spray.

TikTok executives announced new initiatives meant to persuade companies and ad agencies to buy space on the app during its first-ever TikTok World event on Tuesday, a virtual presentation aimed at the marketing industry.

The company said it was introducing an automated system to act as a kind of matchmaker, bringing together advertisers and content creators, giving TikTok a better opportunity to catch up with other social media companies that have generated greater ad revenue.

TikTok officially opened itself to paid ads more than a year ago, but many companies have remained wary of it.

TikTok is the least trusted major social media platform, behind Instagram, YouTube, Google and Facebook, although trust is growing, according to a survey of more than 900 marketing professionals conducted by the research firm Kantar.

There are concerns about TikTok’s driving young viewers to dangerous content, as well as lingering wariness over the company’s record on privacy.

While the app has sparked wholesome crazes involving sorority fashion, it has also has set off vandalism sprees and food fads with negative side effects.

Half of major brands, including Nestlé and Audi, have no TikTok presence, according to a recent review of 300 companies by the research group WARC.

Some companies cite a hangover from TikTok’s tussle with the Trump administration in late 2020 over security and censorship concerns involving its owner, the Chinese company ByteDance.

Others say they worry that the Chinese government could start cracking down on the app, just as it recently imposed limits on video games. continue reading

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