Platform Insights: TikTok defies digital ad market slowdown

The digital ad market may be slowing in 2023, but a new WARC report finds TikTok is defying the trend: its two-year growth is set to carry into this year, with ad revenue increasing 53% to reach a forecast £15.2bn.

In the first of a new series of reports, Platform Insights: TikTok from WARC Media, provides an overview of the key data points that advertisers need to know about, spanning investment, consumption and performance insights.

Why it matters 

Alex Brownsell, head of content at WARC Media notes how TikTok is playing a growing role in culture around the globe. “Its potential ad reach stands at a reported 1.05 billion, including 409.1 million users aged 18 to 24. In 2022 it was the most downloaded app in the world for a third year running according to data from Sensor Tower. And its full-screen, vertical video format has inspired copycat products such as YouTube Shorts and Instagram Reels.”

What’s more, the Future of Media report – part of WARC’s Marketer’s Toolkit survey – found that 75% of marketers plan to increase their ad spend on TikTok this year. 

Takeaways 

• All product categories to increase TikTok advertising investment

TikTok has been a major beneficiary of marketers choosing to rebalance budgets in light of media fragmentation. WARC Media forecasts all categories will increase ad investment on TikTok in 2023, including sectors that are forecast to see overall ad spend decrease, such as automotive and soft drinks.

• Technology & Electronics sector leads the way 

WARC Media’s latest Global Ad Trends report, Media Models in Flux, found that advertising spend in the technology and electronics category is shifting toward digital ad formats in channels like video and audio. As one of the market’s fastest growing categories from an ad investment perspective, ad investment on TikTok is forecast to increase by 14.3% this year, to a combined investment of $2bn. 

In the US, consumer packaged goods drove significant growth, increasing ad spend with TikTok by 84% in Q4 2022 compared to the prior quarter, according to data from Pathmatics.

But … political clouds are gathering

A potential barrier to TikTok’s continued growth could be a groundswell of political opposition to the Chinese-owned app and its potential (mis)use of user data. In the UK, it is being banned from installation on government-owned devices, while in the US there are demands the platform be sold or face a nationwide ban. 

Sourced from WARC Media, Sky News, NPR