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| TikTok Ad Revenue Exceeds Twitter and Snapchat Worldwide |
Everybody's
got to be dancing at TikTok right now given these new projections over their
ad revenue that suggests they have become an advertising juggernaut so much for
those concerns over data collection and privacy issues are no longer a concern.
Talk about the numbers with Deborah Ajo Williamson principal analyst at insider intelligence Deborah said this app that most people just associate with these trendy viral dances has become so much more what are the projections for ad revenue and how do they compare to Twitter and Snapchat. She said so this is our inaugural forecast for TikTok’s ad revenue both worldwide and in the United States. we are estimating that this year TikTok will make 11.6 billion dollars Worldwide to put that in a context that is more than Snapchat and Twitter combined.
This means is incredible you think TikTok wasn't even around like four years ago it was formed by the combination of a small app called musically. That nobody remembers with some other assets that TikTok's parent company bike dance Owns and suddenly now here we are four years later looking at a company with 11.6 billion in ad revenue this year.
That's to me incredible it is to put it in a little bit more perspective it's nowhere near what we're expecting for meta the parent of Facebook and Instagram which is leagues ahead still and remains to be that way. More and more I am seeing TikTok coming on strong as an advertising vehicle that advertisers around the world are starting to clamor to be on just like users you're not kidding.
These numbers are eye-popping I almost fell out of my chair when I saw them what makes TikTok such a friendly environment you know there are a couple of things so the user base right now. Estimating that about one in five social network users worldwide is right now is using TikTok but more than that it's really about the amount of time these users spend in the United States. Just among adult TikTok users so not including those teams among the adult TikTok users estimating that they spend 40 minutes a day watching TikTok videos. That's absolutely the testament to how TikTok is set up its algorithm shows you videos of all types that you think that they think you're going to be interested in and in a scrolling feed that's pretty much endless.
It just keeps you going and the advertising ends up being interspersed in that. I think another factor that's driving this growth is that TikTok has a lock on the youth market. I just saw a major survey from investment company Piper Sandler last week where teens now say that TikTok is their favorite social media app ahead of Snapchat and Instagram. In our numbers, I estimate that about two-thirds of all teens in the United States and about three-quarters of young adults 18 to 24 are monthly users of Tick Tock. A huge audience spends a lot of time on the app and is engaged watching videos for what seems to be hours if not minutes if not hours on end.
Read More: Elon Musk Wants to Buy Twitter
During a day it seems one of the effective attributes of TikTok is that some of these ads are original content that people aren't clicking out of they are watching voluntarily and even sharing. I mean one of the unique things that TikTok did is to involve creators or influencers in the advertising. A creator might partner with a brand they might create a video supporting that brand and then that creator will turn to their followers which often number in the millions and say okay now you guys create a video using these similar assets.
This similar hashtag you put your spin on it and these kinds of things have spread virally across Tick Tock. I have seen this over and over again and this tight partnership between creator's brands and then the followers of creators is really what's helping TikTok advertising it's been a large driver in the name image and likeness rules. In the NCAA a lot of players make significant money so I mentioned in the intro those concerns about data collection and privacy.
This is a Chinese-owned app what happened to those a year ago there was a big movement to push people off of that app and to get children off. It entirely I don't think those concerns have gone away, to be honest, I think they certainly have diminished in terms of public awareness. I do think that there are still studies that have come out about the effects of TikTok on people's health just like on other social media apps.
TikTok is not immune to some of those concerns I also see pretty regular investigations. How the data is used is it going to China TikTok says no but that's hard to prove so I wouldn't say that advertisers or users for that matter should disregard the privacy concerns or the concerns about data usage. But at this time TikTok's momentum is really strong and I think that both advertisers and users are just willing to overlook that right now.
I don't have a lot of time here what's happening over at Twitter in terms of their growth in their ad revenue. I did not expect changes regardless of whether or not Elon Musk's Twitter takeover eventually succeeded. Whether he just hangs on to that 9% you know hard, to sum up, what's going on on Twitter in a short period but let me see if I can do that for you before all of this started with Elon Musk.
I forecast that Twitter will have another really good year for revenue with revenue growth of advertising revenue growth of about 25% per year on year getting to be about 5.6 billion that's after 41 growths last year. So right now I am looking at a very strong performance for Twitter what's hard to predict right now is the effect of Musk is whether he going to push for subscriptions. He is going to as he tweeted over the weekend and then deleted a push for an ad-free twitter these are some concerns that we have. We are going to be paying a lot of attention to it because anything that someone like Musk does to change. How Twitter is experienced by its users does have a ripple effect on advertisers and that's something we have to pay attention to yeah whether he is on the board or not he is going to push for change and may push Donald Trump back onto the format.
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