Expert opinions, FORECASTS

Why TikTok will soon lose leadership

TikTok, the Chinese-owned short-form video app, began to break all popularity records among social platforms almost immediately after it was launched. Just consider a few figures — at the beginning of this year, TikTok was the second most downloaded app in the world; the platform’s audience is expected to surpass 1 billion users any day. Initially, brands were skeptical about the social media platform; now many are vigorously vying for the audience on TikTok. How long will the trend last and will it pay to promote your business through TikTok?

Addictive simplicity

In 2014, Chinese entrepreneur Alex Zhu launched Musical.ly, a short-form app originally intended for short-form educational content, where users could create and share 5-minute science-pop videos. The startup was not too popular, so the owners made a fateful decision to make the platform more entertaining by enabling users to create and watch funny videos. After a short time, the platform got a new name, TikTok, when Musical.ly merged with Douyin, also a short-form video app where users could add effects and music to their videos. In 2017, it expanded outside of China to select international markets.

In just a few years of its existence, TikTok has firmly taken the leading position. It now has its own stars that are setting new trends. And most importantly, TikTok has been monetized, and major brands joined the platform. The move was aimed at attracting a younger audience: the overwhelming number of its current users are people between the ages of 14 and 24.

In many ways, the popularity of TikTok was influenced by the pandemic. People all over the world found themselves in isolation and flooded by negative news. Internet users needed positive emotions, simpler things and relaxation; they wanted light and easy content in the literal sense of the word. TikTok gave them exactly what they wanted — the social network provided a sort of chewing gum for the brain.

Two-edged benefit

On the one hand, TikTok is a popular platform with a huge number of users, where you can advertise almost any goods and services. The platform offers varied functionality for brand promotion — launch your own channel or a hashtag challenge, create branded masks, effects or tracks, or place native ads with content creators. It is also possible to set up targeted advertising through your personal account or Yandex.

However, effective promotion on TikTok requires significant investments — one needs to constantly generate new content, come up with creative ideas, keep track of trends, and allocate a large budget for working with influencers and advertising. In any case, the amount of effort will always be greater than potential income — the bulk of the TikTok audience is unable to pay; they are schoolchildren and students. Advertising there mainly works to increase brand awareness and popularity and not all companies need just that.

Overall, business should promote its TikTok account only if it addresses its target audience, the advertised product or service is not expensive and it is possible to allocate a solid budget. If all the three conditions are met, one should not postpone entering the platform, for it will soon lose its popularity.

Why is TikTok facing decline?

TikTok will not be able to keep leading positions for a number of reasons. First, its main audience are representatives of just one generation. In order to monetize a social network and keep it popular, it needs to offer content for users from various age groups. Financially stable audience still does not take TikTok seriously, which also negatively affects its monetization.

The second reason is that TikTok’s major advantage at the early stage — its simplicity — now is a letdown. It only has one kind of content, there is no room for updates and improvements. The top-notch social network must be flexible, regularly updated and offer various kinds of content. Users get bored with an eventless feed: the example of Clubhouse is a case in point.

Therefore, the popularity of TikTok in the next five years will probably decline. The social network will only be able to retain its position if it manages to attract and keep a large number of financially capable users from various age groups. However, this people are not time wasters.

The niche of TikTok will not remain empty: it will be taken by its direct rivals, YouTube and Instagram. They will be among the most popular platforms at least until 2027. The optimal marketing strategy would be to pursue these networks now, not waiting until the end of the TikTok era.

By Margarita Bylinina, marketer, head of the Digital Marketing Academy project, author of books on Instagram promotion

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