Will Small Businesses Flock to TikTok?

Earlier this month, the ubiquitous Chinese social media company TikTok launched a self-service ad platform to extract ad dollars from small businesses. This shouldn’t come as a surprise to anyone. After all, Facebook built a massive advertising business in the local SMB space. As did Google. And both offer self-serve buying experiences.

Oh, and just like the streaming service Hulu, TikTok is also serving up $100 million in credits to drive some trialing of its platform. TikTok will also have a review process to make sure ad messages are consistent with its policies. Which policies you might ask? We’re not sure. But we do know that the U.S. State Department is keeping a close eye on TikTok, to put it mildly.

TikTok has a massive user base with much of it in the coveted 25-44 age group. That same group is certainly among Facebook’s biggest audiences as well. Blake Chandlee, Vice President, Global Business Solutions at TikTok, spent 12 years at Facebook. He was there while Facebook was ramping up its local and small business efforts.

Blake had the following to say about TikTok’s new self-serve initiative.

“TikTok’s immersive, short-form videos give businesses a platform to participate and engage with a community known for its creativity, ingenuity, and joy. As our marketing solutions scale and evolve, we’re continuously building for the future and aiming to meet the growing needs of our partners. We’re excited to continue supporting our community by providing the tools and resources for SMB owners to navigate these challenging times.”

What could make TikTok’s foray into the local space is the extremely high-income levels of its users? The chart below shows that TikTok’s users are both young and well off, a seriously attractive combination. 

Bottom Line: Credits Won’t Tell the Tale

Here’s our bottom line point of view. The launch of new self-serve ad platforms from the likes of Hulu and TikTok offers local business owners a compelling range of options to get their messages in front of potential customers. We won’t know how well these platforms are accepted by small businesses for some time.

In the near term, the millions of dollars in credits will be helpful but not necessarily telling. Right now most small businesses are simply trying to hang on to their hats in the gale-force winds of COVID-19. A year from now, when those winds have (hopefully) died down, we’re likely to see millions of local businesses testing and trying new ad platforms to reach valuable audiences. For now, it’s probably best to sit back and see what happens. While watching another hysterical video on TikTok, of course. 

It’s important to note that TikTok isn’t a search platform like Google. Nor is it a social platform like Facebook. It competes probably most directly with Facebook’s Instagram property. And since COVID-19 reared its ugly head back in early 2020, TikTok has seen its audience in the 25-34 age group increase even more. 

Related Localogy Coverage

Hulu’s New Platform Targets SMBs with Massive Ad Credits

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