TikTok tapped former Disney exec Kevin Mayer last week to be its new CEO and to serve as COO of parent company ByteDance. Hiring a leader in the U.S. is a smart move, since TikTok’s connection to China has sparked both speculation and scrutiny — including from U.S. lawmakers, who are concerned about both privacy and censorship. Several government agencies, including nearly all branches of the military, have even barred employees from downloading or using the app. Appointing a CEO in the U.S. will certainly make the platform more appealing to Western brands.
But hiring new leadership is not nearly enough to get big brands to shift from experimenting with content on TikTok to investing big dollars in ad spend. ByteDance is counting on Mayer’s ability to make TikTok as successful in attracting big advertisers as it has been in attracting users.
TikTok was the most downloaded app in Q1, 2020, so a recession likely won’t hinder its popularity or stop brands continuing to experiment with organic content on the platform. In fact, the social media platform will likely grow during a recession as people spend more time with digital content. TikTok has always been popular among youth, but it is now attracting an older demographic, too, which should make it even more appealing to brands.
It is a great time to be an advertiser on TikTok. When it comes to ads, which is how TikTok makes money, the platform has a lot of supply (people watching videos) and relatively low demand (brands advertising on the platform), especially compared to Facebook. In other words, brands that are already advertising on TikTok might be getting broader reach at a fraction of the cost of advertising on other platforms. However the challenge is the demographic of the audience on TikTok and its actual purchasing power.
The vast majority of brands aren’t ready to get serious about TikTok advertising yet. They are still in the test-and-learn phase, running multiple experiments to better understand how TikTok works and how it might perform for them. They know how engagement looks on YouTube, Facebook, Instagram, and Snapchat, but they’re still figuring out what TikTok’s format and audience can deliver.
Some well-known, global brands — including Mercedes Benz, MAC Cosmetics, and Burberry — have run successful experiments and are ahead of the curve in testing the TikTok’s potential as a marketing platform. But most of their campaigns emphasized hashtag challenges and influencers, not paid advertising. MAC Cosmetics, for example, launched its #YouOwnIt hashtag challenge on TikTok and earned more than 2.3 billion views. The campaign kicked off with a clip produced by MAC, but the vast majority of the content that followed was user generated. Burberry launched its TikTok presence with a highly-engaging challenge: The #TBChallenge. Celebrating the launch of the new Thomas Burberry Monochrome collection, Burberry encouraged followers in the U.S. and the UK to recreate the new Thomas Burberry Monogram motif with their hands to unlock a new lens. Meanwhile, Mercedes Benz used TikTok to engage with socially-savvy Gen Z via an extensive campaign to encourage users to come up with their own interpretation of the infamous Mercedes Benz star logo, using the hashtag #mbstarchallenge. The creative branding campaign scored Mercedes Benz over 494 million views, 61,600 new followers, and more than 525,000 likes.
Mayer’s challenge is to accelerate brands’ learning curves and encourage them to make bigger advertising bets, even as they’re still getting to know the new platform. To do that, he will need to promote the ad formats TikTok already offers, such as Infeed Native ads, Brand Takeovers, and Branded Lenses, while developing the platform’s ability to target. After all, TikTok doesn’t yet offer the same sophisticated capabilities that marketers are used to getting from Facebook or Instagram. He will need to convince advertisers that it is time to make the shift from using TikTok as a sandbox for marketing experiments to making TikTok ads an integral part of the marketing mix — especially for brands interested in staying culturally relevant and connecting to the consumers of tomorrow.
But that’s not all. To get marketers’ confidence, Mayer should further open the TikTok platform for technology partners to source data and help marketers understand a campaign’s performance as well as their audience and content at scale.
Mayer’s nickname at Disney was “Buzz Lightyear,” and he is credited with the explosive growth of Disney+. Frankly, TikTok is the only social media network that comes close to the scale of Facebook and Instagram, and with Mayer at the helm, it is likely to grow even more. The company is expected to hire 40,000 people this year, mostly on the business development side. With Mayer at the helm, it is the platform to watch in 2020.
Yuval Ben-Itzhak is CEO of Socialbakers. He was previously CTO at Outbrain, at AVG Technologies, and at Finjan, and in 2000 founded web application security company Kavado.