Interview — TikTok perseveres to re-engineer adtech in 2020

• Tiktok is having both its best and worst year
• Tech Wire Asia speaks with Tiktok on its Tiktok for Business ads platform, and where advertising tech is heading this year

What a whirlwind year 2020 has been for social media upstart TikTok. Not only did usage of the short video content platform start soaring during the quarantine months, but the app became embroiled in the ongoing tensions between the US (where it has over 50 million active users daily) and its native China.

The app also got banned in its second-biggest market India, around the same time it was introducing the first TikTok ads platform, TikTok for Business.

Losing access to the Indian market no doubt chafes, but TikTok was just one of nearly 60 Chinese mobile apps that fell victim to a border dispute between the two Asian superpowers. That can’t be pretty for TikTok’s fledgling advertising ambitions, but losing the American market would be downright disastrous.

TikTok is presently challenging the US government over its attempted ban of TikTok which is set to go into effect later this month. As part of the lawsuit, TikTok revealed its remarkable growth trajectory: the app more than doubled its US user base last year to 27 million, before tripling its users to 91 million by June 2020.

No market consumes as much advertising and is home to as many influential brands as the US, so TikTok is fighting to stay relevant in that market, with parent company ByteDance even considering selling its flagship platform to a US owner.

Globally, the company experienced similar growth spurts, ballooning from 55 million users in January 2018 to an awe-inspiring 507 million by December 2019. Last month, TikTok surpassed 2 billion downloads and reported nearly 700 million monthly active users. It is easy to see why the launch of TikTok for Business ad platform seemed right, to capitalize on all those eyeballs.

Getting the hang of the Tiktok ads platform

Marketing managers who are familiar with Facebook and Instagram’s ads platforms will quickly get the hang of TikTok Ads Manager. But instead of display and banner ads as part of their inventory, TikTok ads look just like regular Tiktok videos.

“Due in part to social media, video has also quickly risen through the ranks of digital marketing over the past few years – nearly 9 in 10 companies use video as a marketing tool today,” Arjun Sarwal,  TikTok’s Head of Southeast Asia Regional Business (Performance), told Tech Wire Asia. “In particular, short-form mobile video is on the rise, with 8 to 15 seconds being audiences’ golden attention span. This is because short-form videos are easier to share and grab people’s attention best on mobile devices.”

Smartphones have made the internet much more accessible to millions in the Asia Pacific (APAC) region and is one of the primary reasons why newer adtech like TikTok ads are mobile-first. “According to a TikTok Trends research study, 57% of worldwide video plays come from mobile devices, and smartphone users hold their phone vertically about 94% of the time,” affirmed TikTok’s Sarwal.

“Vertical formats also remove any distractions on the mobile screen and keep audiences focused on what matters – the brand’s ad. Hence, many adtech platforms have begun optimizing for vertical video ad formats, especially in Asia’s mobile-first economy.”

Tiktok parent ByteDance is as much as a technology company as it is an advertising juggernaut, with 86% of the company’s total revenue generated from ads. Machine learning is at the forefront of today’s advertising; proving to be indispensable in helping advertisers to scale ad planning, performance, and personalized creative.

89% of marketers saw higher conversions using algorithms for tested ad packages compared to manual optimizations, highlighting the need for machine learning in today’s marketplace. “TikTok employs a content recommendation system, powered by machine learning, to deliver personalized yet diversified content to users,” said Sarwal.

“Our intelligent content discovery process is able to push content to each user that reflects preferences unique to them. This ensures that users are constantly surprised and helps brands gain many opportunities to reach a wider, global audience.”

Augmented reality, or AR, is also proving to be essential to modern adtech platforms, especially as AR-ready smartphones and other devices become more accessible around the world. “By overlaying information or introducing games within a scene, AR offers users more interactivity and engagement, thus improving their experience with a particular brand.”

“Here at TikTok, we strive to provide advertisers with a rich and immersive storytelling experience through our unique Brand Scan offering, the latest AR Branded Effect that allows users to have an augmented reality experience within every brand,” elaborated Sarwal.

But Sarwal thinks the technology is there to complement what consumers already bring to the table, not the other way around. “Nonetheless, regardless of the tech available today, marketers must first and foremost understand people’s behavior, such as how they use their devices and platforms, and what they’re interested in, before they can create compelling and effective ads.”

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