We talk a lot about monetisation on TikTok and how creators can earn money through the platform – but how does TikTok as a business make money?
In this article, we’re focusing on the popularity of TikTok as a global social sensation, and how the platform makes its money.
Money Through Advertising
Many users don’t realise it, but brands and creators have to pay out big money for their adverts to appear on the app when you’re browsing.
TikTok charges brands and creators based on the number of clicks that their ad campaigns receives, and also sells different advertising slots and campaigns to big brands based on the way that users engage with the app.
For example, brands can pay to host a hashtag challenge, or can pay big money for an exclusive takeover of the app for a full day. These types of campaigns cost upwards of $100,000 and deliver a solid income to TikTok as well as invaluable marketing opportunities to the brands.
In short, TikTok is an integral platform for brands that want to connect directly with their target audience – with different brands notably using the app for different outcomes. While some look to sell and market directly, others use TikTok as a way to increase exposure and visibility of their brand.
The hashtag challenge as hosted by TikTok creates talk around specific brands and their campaigns. Meanwhile, a brand takeover puts a brand centre stage for an entire day, making it the first ad that users see when they open the app.
Brands can also tap into branded lenses and filters which are added to the visual editing options for users, or they can simply pay to promote an advertising post with a cost per view and a cost per click.
Suffice to say, the variety of advertising options available to brands means that TikTok earns money from creators and businesses consistently and at multiple different levels.
Money Through Creator Gifts
If you’ve ever hopped on a live stream, then you will know that TikTok creators can receive gifts from followers.
Well, these gifts cost real money – with followers paying money to buy TikTok coins which can then be converted into gifts for their favourite profiles and streamers. But when these gifts are cashed out, TikTok takes a portion of the earning from the creator.
This is another stream of income for TikTok as a business, as the platform takes half the total amount earned by each creator in commission.
How TikTok Continues to Increase Demand and Income
You need only look at the platform that TikTok has built to see how it continues to drive demand and increase its own income in commission and other advertising branches.
Because TikTok offers such a safe and secure experience to users and creators, buoyed by the multitude of constantly evolving features and tools which make in-app growth easier and more sustainable than ever, being on TikTok is a no brainer for these businesses.
TikTok’s own bottom line is enhanced and supported by the fact that businesses of all shapes and sizes, across all industries, are keen to be seen on the app. The expansion of TikTok means that being on the app will connect a brand or business with countless potential customers and consumers – and that makes the often hefty ad spend worth the investment.
So, TikTok has its own income streams through commission and advertising – but it’s the success and quality of the app and platform that makes its own growth sustainable in the long run.
