Deciphering TikTok's business model | How does TikTok make money?

The Internet has shrunk geography, brought people closer together, and turned the world into a global village. With over 5.19 billion internet users worldwide, social media platforms command the time and attention of many people. 4.26 billion individuals.

TikTok ranks among the top social media platforms because it allows individuals to discover, create, share unique content, express themselves freely, and set global trends while building their brand and making money. It is attracting attention.

But what is TikTok, who are its users, what are its service channels, and how does it generate revenue? Let's decode TikTok's business model.

What is TikTok?

TikTok is a short-form video hosting platform Users can create and upload dance and lip-syncing videos, and participate in countless viral trends and challenges.

Chinese tech giant ByteDance launched A.me in 2016, an app that allows users to create, discover and share short videos. It was later renamed Douyin. In 2017, ByteDance expanded Douyin outside of China and changed the app's name to TikTok.

ByteDance also acquired a US-based social media app.Flipagram and Musical.ly—Integrated with TikTok in 2017.

TikTok is currently available in over 150 countries and 75 languages ​​and has gained immense popularity among the general public, business owners, activists, entertainers, and celebrities. Over 150 million active users Even in the US alone.

TikTok is a popular infotainment platform around the world that has helped several influencers build a loyal follower base, earn a living, and realize their dreams. But what is TikTok's customer segmentation?

TikTok customer segmentation

Currently, this entertainment platform More than 1 billion monthly active users online World wide. TikTok is a popular platform that aims to inspire creativity and joy in its users.

Mainly TikTok We serve three types of customers:

• Individual: Individuals up to the age of 34 and Gen Z primarily use TikTok to express their creativity and produce homemade videos. You also use it to consume engaging content, take part in challenges, and share funny videos with your social groups.
• celebrities and influencers: Celebrities like Taylor Swift, Gordon Ramsay, Will Smith, Selena Gomez, Ed Sheeran, and Ryan Reynolds are users, which is part of the reason TikTok's popularity has soared. They use the platform to engage with their followers, gain new followers, entertain, and make announcements.

  Influencers like Khaby Lame use this platform to enhance their reach, keep their followers entertained, gain more followers, and make a living through advertising and partner collaborations with brands.

• business: Businesses use TikTok to engage with their target audience, increase brand awareness, partner with authentic creators, and endorse products through user-generated content (UGC).

TikTok is one of the biggest social media platformBut why do users unequivocally trust TikTok to build and grow their brand? Let's find out.

TikTok value proposition

Here are some features that distinguish TikTok from its competitors:

1. Record and upload videos

The most basic feature of TikTok that attracted users in the first place is recording and uploading videos. Using the app, a user can record and upload new or existing videos ranging from 15 seconds to 10 minutes.

2. Video editing and filters

TikTok provides its users with many video editing tools so that they can be creative in any way they want. Users can trim or flip the video they want, change the playback speed, rotate it, change the background, etc.

The platform also has a huge library of filters and effects to improve the quality of your videos. Users can apply beauty and AR filters, stickers, and animations to make their videos stand out.

3. Sound effects and narration

Users can add sound effects to videos, and add songs and effects to make video content more contextual. You can also record and add voice-overs to pre-recorded videos to get your point across.

4. Live video streaming

TikTok allows users to stream live video and allows for real-time interaction between creators and followers.

5. Duet video

TikTok's duet feature allows you to play two videos at the same time, allowing users to sing, dance, and perform other activities together.

6. Stitch

This feature allows users to stitch Video with other users. However, it is a little different from a duet video in that the spliced ​​video plays after the original. This popular feature allows users to react to videos, follow instructions, and add comments.

7.Video reply

This feature allows users to curate videos and respond to comments. Videos display comments to help users clarify their doubts or follow requests from their followers.

8. TikTok for Business

TikTok advertising manager Businesses can run and manage paid campaigns on the platform within minutes. This affordable solution helps businesses increase sales and measure campaign performance.

Who are TikTok's key partners?

TikTok is a social media giant; Collaborate with strategic partners To ensure continued success. TikTok's partners include:

• Celebrities and influencers: Tiktok has contributed to its growth and development by being comprised of a network of celebrities and influencers who help popularize the platform among their followers.
• Commerce partners: commerce partners etc. Shopify, product up, and square, We help develop marketing techniques to help vendors set up shop on TikTok.
• Marketing person: These help us design, execute and measure advertising campaigns.
• Campaign management partner: Partners like Bidalgo, adMixt, Sprinklr, and WinClap help advertisers leverage technology to optimize their ad spend on TikTok.
• TikTok Business Solutions Measurement Partners: Partners like Neilsen and Adjust offer services to help companies monitor the effectiveness of their TikTok business solutions.
• Creative partner: Such partners, such as Canva and Cooler, provide audiovisual and technical skills to businesses to help curate advertising at scale.
• Special effects and sound partners: Specializing in TikTok's AR tools and sound effects, these partners can help businesses take advantage of these services.
• Safety partner: TikTok partners with online safety experts such as the Content Advisory Board, non-governmental organizations, and other associations to promote a safe platform.

What are TikTok's main resources?

Key resources on TikTok include:

• Intellectual Property Compiling User and Business Data.
• AI-based algorithms and IT infrastructure have guided TikTok's growth.
• Beneficial partnerships with companies Anyone who wants to use TikTok to promote or sell products.
• Content curators, digital influencers, and celebrities who use and popularize TikTok.

What is a TikTok channel?

You can easily download the TikTok mobile app below apple store, amazon app store, google play, microsoft, QR code. You can also access it via: Website.

What services does TikTok provide to its customers?

As a platform, TikTok promotes self-service. The Help Center consists of several articles, including creating an account, resetting your password, account and privacy, monetizing TikTok, and using TikTok. Users can find solutions to their problems from these articles.

TikTok safety center Consists of guides to help users counter hate, understand how their data is used for advertising, how to fight fraud, and more.

the creator portal has a wide range of articles to help solve problems for creators.

What is TikTok's cost structure?

TikTok's 2022 expenses include management, marketing, data center, and infrastructure costs.

How does TikTok generate revenue?

TikTok's revenue streams can be categorized into four sections.

advertisement

TikTok derives most of its revenue from the ads that appear on the platform. We offer a variety of advertisements.

• Infeed ads They appear in the News Feed section, where users can like, comment, and share them with their followers.
• top view ads An autoplaying ad that takes up the entire screen and is accompanied by audio.
• brand takeover advertising is the app's[For You]or[Discover]This is a full screen ad that pops up in a section.
• spark ads Let advertisers post and promote new content and organic content curated by other creators.
• playable ads Create full-screen playable experiences and allow users to interact with ads throughout these games.
• carousel ads and collection ads is also a popular option.

Branded hashtags and effects also help brands enhance and amplify their customer reach.

TikTok's increased video length has increased its CPM (cost per mile), and the TikTok Pulse initiative has benefited creators (with over 100,000 followers) by allowing them to split ad revenue with the platform. At the same time, advertisers can display ads in the top 4% of the platform's content.

shop fee

Users can purchase items shown in in-feed videos, live streams, and the Product Showcase tab on seller profiles directly from TikTok's Shop section.

TikTok charges sellers a percentage-based fee for each sale made through the platform.

live subscription

TikTok introduction live subscription On May 23, 2022, we will offer various monetization opportunities to creators. The cost of this subscription ranges from $4.99 to $24.99 per month.

LIVE gifts are another source of income on TikTok, where creators receive virtual gifts from their followers and are required to split the proceeds of the gift value with the platform.

royalty

TikTok sound on We help up-and-coming artists distribute their music worldwide, maintain 100% ownership, and promote it. The artist retains his 100% of all royalties for the first year and thereafter he may retain 90%.

TikTok is a popular entertainment site, but it's quickly becoming a super app that lets users watch videos, play games, shop online, and more.this business type We support creators, artists, marketers, and business owners.

References and further information