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TikTok's Growing Advertising Base

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Bloomberg Jan 3 03:44 · 3946 Views

Rachel Tipograph, foudner and CEO of MikMak, says she sees a shift in advertising and shoppers to other social media leaders if a TikTok ban were to occur. She joins Tim Stenovec and Katie Greifeld on "Bloomberg Technology" to discuss.

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Transcript

  • 00:00 You have some incredible data on Micmac platform about where the advertising money
  • 00:04 is leaving to go to Tiktok.
  • 00:07 Let's start there for context.
  • 00:08 Yeah, who's losing money as a result of Tiktok's growing popularity?
  • 00:12 Absolutely.
  • 00:12 My company, Micmac, works with over 2000 of the biggest brands in the world.
  • 00:16 And what we've seen this year is a 200% year over year growth in Tiktok.
  • 00:21 At the same time, we've seen a 65% decline in Alphabet.
  • 00:26 Alphabet for us is paid search, it's YouTube, it's DV 360.
  • 00:30 Everyone else is menial compared to this.
  • 00:33 So if a tic Tac ban were to occur, you can believe that Alphabet is going to see big regains in brand advertising traffic.
  • 00:41 It's interesting.
  • 00:42 I mean, I'm speaking from personal experience When I talk about TikTok Shop, I actually used it for holiday shopping, which
  • 00:48 I wasn't expecting to do.
  • 00:49 You think about TikTok potentially being banned?
  • 00:52 That would theoretically, as Tim mentioned, be a benefit for YouTube Shorts for
  • 00:57 of course, Meta's reels as well.
  • 00:59 But when it comes to the actual e-commerce bit, do they have the same infrastructure and ease of use as you have on a TikTok shop?
  • 01:07 It's interesting about TikTok.
  • 01:08 TikTok has the power of television with the backbone of direct response advertising,
  • 01:12 so you can build brands and drive conversion all at once.
  • 01:15 That being said, when it comes to bottom of the funnel, I want to drive sales, advertising.
  • 01:20 The two best places to do it today still are Alphabet, meaning paid search,
  • 01:26 and Meta.
  • 01:27 And so if this were to happen, I still believe you're going to see a massive shift back to Alphabet, a little bit back to Meta.
  • 01:34 But in terms of TikTok, it has become the fourth biggest marketplace in the
  • 01:38 US.
  • 01:39 So who's going to gain from marketplace sales?
  • 01:41 It's going to be Amazon.
  • 01:42 It's going to be Walmart.
  • 01:44 It's going to be eBay.
  • 01:45 It's going to be TAMU.
  • 01:46 So there's going to be a lot of companies to gain in this disruptive shift.
  • 01:50 If a TikTok ban were to occur, Rachel,
  • 01:53 who?
  • 01:53 Who do you think?
  • 01:54 Or what should the companies that are clients of yours be doing to prepare for a possible ban?
  • 01:59 How should they be changing the way they're looking at things?
  • 02:01 I believe, first of all, that a ban is going to be delayed.
  • 02:04 I think that this is a hot opportunity for the Supreme Court and Trump.
  • 02:08 That's my hot take as Rachel.
  • 02:10 But in terms of my customers,
  • 02:12 I'm working with the biggest brands in the world.
  • 02:14 They're used to this.
  • 02:15 When Elon Musk took ownership of Twitter now X, we saw X traffic go to zero.
  • 02:21 What did they do?
  • 02:21 They just reallocated spend overnight.
  • 02:24 It's not the big brands to be worried about.
  • 02:26 It's the small, medium businesses that are heavily dependent on TikTok and the creators.
  • 02:31 Some people rely 100% on TikTok for their income.
  • 02:35 The big brands will be resilient.
  • 02:37 The small businesses are the ones who are going to experience tough times.
  • 02:41 Rachel, we only have about 30 seconds, but you mentioned some of the beneficiaries here, of course, the Amazons, the alphabets of the world.
  • 02:47 What about
  • 02:48 Etsy?
  • 02:48 What about eBay?
  • 02:49 Some of these
  • 02:50 marketplaces that have been kind of left behind?
  • 02:53 Yeah, there's going to be a shift back to seeing sales in places like eBay and Etsy and TAMU.
  • 02:58 But Walmart and Amazon are huge players now.
  • 03:01 In 3P marketplaces,
  • 03:03 all of these players will see gains.