One company that really surged from global lockdowns and the pandemic. Bytedance’s TikTok rose to crazy levels of popularity within the past few months, and the balance sheet shows.
Last year, TikTok brought in about $200 million to $300 million in revenue worldwide.
This year, TikTok aims to generate $500 million in revenue from the US alone, according to tech publication The Information. Granted, subscription growth and stickiness has been surging but brands are also slashing marketing costs as they cut back due to economic ripples from the pandemic.
TikTok plans to attract more ad dollars is expanding access to a self-service platform for ad buyers in the US and Europe. This makes it easier for businesses to tailor their campaigns and buy ads the way they can already do on Facebook and Instagram.
Last month, it was announced that Disney’s Head of Streaming, Kevin Mayer would take on the role of TikTok US’s CEO. Mayer’s international reach and his know-how in executing successful deals, daily operations and brand building will be valuable to TikTok’s western domination.
TikTok has been downloaded over 2 billion times globally since its launch, and it’s become integral to Bytedance’s success.
TikTok accrued 315 million installs in Q1 2020, setting a record for the most downloads any app has ever had in a single quarter.
Bytedance has a valuation of $75 billion, and is still a private company (for now). The company borrowed $2 billion last November, reducing its need to raise capital.
Looking ahead, ByteDance has reportedly set a 2020 revenue goal of about $28.2 billion, $11.2 billion more than what it generated in 2019.
Doubling down on advertising & diversifying growth
Growing TikTok has cost serious money though, so it’s time to double down on marketing dollars. The app had 50 million daily active users in the US as of a couple of months ago, up almost x5 from the previous year.
To put things in perspective, it’s still trailing other big tech platforms. Unsurprising though, as the other players got years of head start over TikTok.
For example, Snapchat made $1.7 billion in revenue in 2019. Twitter made $2.5 billion, and Instagram apparently made a staggering $20 billion.
TikTok now allows marketers to buy ad products such as sponsored hashtag challenges, which promote a hashtag across the app to encourage people to make videos related to a particular brand, like Chitpole for example.
In order to appeal to US brands, TikTok made an effort to carve out a domestic American team, separate operations from China and dedicate its own technology stack to fend off security concerns.
What else is TikTok doing to diversify from its young, under 25 demographic? In Europe, it’s moving into educational content. It’s pouring $15 million into the official launch of #LearnOnTikTok, a content unit that will curate educational videos on the platform across Europe.
Eventually, there will be hundreds of educators, real-world skills creators, and non-profit organizations creating content for the hashtag. This move by TikTok feels like it’s growing up.
The bottom line though, TikTok is making sure to carve themselves a seat at the big tech table. They’re here to stay.
