Jobaaj Stories
- Tiktok could cross the $10 billion mark in 6 years. It took Facebook a decade to do the same. In fact, no other ad platform ever clocked that much revenue growth in 6 years
- It is projected, that just in 3 years, Tiktok might as well surpass Youtube in Ad revenue.
3 Billion+
That's the number of times the app, TikTok has been installed on devices across the world!
This Chinese-originated app has performed explosive growth in the advertising industry and is expected to clock in advertising revenue of $12 billion by the end of this year.
India was once a major market for this short-format video app, but even after getting banned in India and losing its Indian audience of over 200 million, it's still going strong.
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What's even more amazing for TikTok is that the app's parent company Bytedance is currently the highest valued unicorn in the world with a valuation of around $140 billion. (estimated from a funding round in 2020)
For your information, TikTok goes by the name Douyin in China and boasts around 700 million active users in China alone.
Adding all of that, TikTok in itself has an active user base of over 1 billion.
But, here's a question!
How is Tiktok winning the game?
I mean Facebook has been in the industry for more than a decade and even that wasn't able to register growth this quick.
In fact, Snapchat and Twitter have been in the game for far longer than Tiktok.
And guess what?
They both have an advertising revenue of around $4-5 billion, which is almost half of Tiktok's predicted ad revenue this year.
So, what's at play here?
TikTok's short video format model
In one way or another, TikTok's short video format, or what Instagrammers will recognize as 'Reel' format has been one of the biggest revolutions in the social media industry.
This highly interactive, and ADDICTIVE content format engulfed the youth.
Not only was it very quickly liked and adopted, but it explosively lengthened the screen time that users dedicated to the app.
The major aspect of the short video format which attracted the Indian audience(especially from the rural regions) was the simplicity of its interface.
The app provided a fairly simple interface to watch and create short videos on the platform.
Ultimately, only after 3 years of its launch, it had garnered a subscriber base of 200 million users in India. (that was before the government banned the app)
The short video format was so ingenious that Meta(then Facebook) adopted the same TikTok video format, and then in 2020, introduced the world to Instagram's most popular feature so far, Reels!
In fact, after TikTok's subsequent ban in India, Instagram's reel feature became highly popular with the Indian audience, as a substitute for TikTok.
Could TikTok surpass Meta(Facebook)?
Meta has a market capitalization of about $450 billion.
It is literally the largest player in the ad industry AND occupies the majority of market share in the Social Media space.
In 2021, Meta clocked in ad revenue of almost $117 billion (about 98% of its total revenue, the rest being from its augmented reality arm).
In comparison, TikTok's ad revenue for the year 2021 was around $4 billion. (which is still quite impressive considering that it registered a 142% YoY growth in revenue.)
Evidently, TikTok still has a long way to go.
And with Meta's continuous efforts to get back its market share, it does seem unlikely that TikTok could ever surpass this American-tech conglomerate.
But that's for the future to see!
Thanks for Reading!
This news piece is brought to you in association with jobaaj.com
