TikTok on TV: How Much did the Platform Spend on Advertising and What Was the Result?
2020’s pandemic took a swipe at everyone. The broadcasting industry got arguably one of the hardest blows. Show production went on hiatus and with brands needing to make cuts to budgets to make up for lost revenue, their marketing budgets were the first to go, taking a toll on ad-generated revenue for networks.
Ad-spending in the year-to-year growth plummeted from 8.6% in 2019 to a mere 4.4% in 2020 according to GroupM, a WPP-owned media division. In the UK alone ad spending experienced its biggest drop in over a decade with only 18.2% going toward television advertisement. The country’s biggest commercial broadcaster, ITV, reported that the lack of ad revenue due to key viewing programs such as sports and Love Island drove advertising down by 11%, resulting in a 16% overall decline in revenue.
Looking at these numbers, one would think that the advertising industry was falling into shambles. Ironically enough, social media platforms with video capabilities such as Facebook and TikTok would have one believe very different facts about the pandemic’s effects on ad-spending. It’s no secret or surprise that these platforms are in direct competition for viewers against broadcasting (and against each other). But if winning in these competitions is the key, is advertising through the TV not proving the worth of television advertising efficacy not seem counterintuitive in those efforts?
‘A to Z’ Campaign
TikTok rounded out 2020 in which they launched ‘The A-Z of TikTok’ campaign, defying then President Trump’s ultimatum, with an addition of a quarter of the British population to its platform’s subscribers, in high fashion. Narrated by Stephen Fry, a UK household name, the campaign introduced the short-span video platform’s more clean-edge side by running across most UK commercial broadcast networks. The goal was aimed at grabbing the attention of the 25 - 44 year-old demographics, specifically those not yet among the platform’s userbase. The campaign’s goal was to offer an in-depth view on a slew of platform-related topics with the hopes of engaging enough viewers not already on the platform to give TikTok a shot.
The nature of the ‘A-Z’ campaign was aimed at introducing an alphabet’s worth of interesting benefits of the platform’s use. For instance, ‘A’ represented homemade aeronautics, ‘C’ angled at clay pottery, ‘M’ was all about eating meringues, and so on. Delivered through TV advertisements TikTok was not only reaching a bigger audience than they would through print or radio (clearly, seeing as it is a video-based platform), but for a platform that typically aims at reaching a younger audience was able to reach a slightly older population, and certainly a far more vast one, through the means of TV ads. Seems like this advertising avenue was a no-brainer.
The TikTok campaign reinforced the idea that there is nothing that rivals the sheer exposure of one’s visual brand like marketing it through television. While other video-capable platforms like Instagram, Facebook, and YouTube can quickly grow an audience in sizable chunks, it’s really only through television that a brand can achieve a richer, fuller exposure. At some point the predominantly aimed for Gen Z audience will reach a tipping point, so TikTok recognizes that they need to stretch the efforts to expand their ads to older generations as well.
Television advertising was a valuable tool for learning that the campaign, mostly aimed at improving TikTok’s standing with ages of people 25 and over, about whether the product or platform advertised needs any particular aspects of the brand. For instance, TikTok’s TV advertising campaign helped to identify that educational content would go a long way in improving the platform’s perception.
Good Competitors, Better Partners?
Another advantage of television advertising is the fact that viewers watching TV are likely concurrently on their mobile devices. When one is reading a newspaper, and they see something interesting, they are unlikely to pick up their smartphone and begin looking things up, but television can present an interesting ad that will trigger a user to pick up a phone and start downloading the app while still watching television.
So how much ad revenue was in play here after all? Well, in Q1, TikTok spent over 3 million pounds in the 6 months between October 2020 and March 2021, a sharp increase from just 300,000 in December, and only about 1.2 million in January. The investment in television advertisements clearly paid off. As noted by industry experts, television is, after all, one of the original forms of social media.
TikTok did not originate this idea. In fact, Facebook already tried this strategy of advertising in the US (in 2012) and in the UK (in 2015), and while the exact figures of ad-spending are not clear, the platform’s media account was estimated to have spent $650 million in 2020 on advertising, with $405 million of that amount being for “offline spending”, a sum comprised almost largely of TV ads. If the strategy worked for Facebook, there is no reason to think it would not work for TikTok and other platforms.
The other aspect of television advertising is that media businesses leverage each other’s ads to get viewers over to their stations. For instance, a particular channel could invest in an advertisement on another, getting the interested audience members to come over to their network instead. For instance, in the UK, Sky is nearly always in the top-ranked advertising tier, being outspent in 2020 only by Unilever and the British government which spent 30 million pounds in ad expenditures.
The one thing TikTok does not need to worry about with television advertising though is TV stealing away its audience, nor should television networks fear losing their audience to TikTok.
Keeping True to the Channel
So here is the irony of it all and a point that the ambitious platforms like TikTok and Facebook hope that people overlook: TV advertising is still a powerful tool for effective marketing. If it wasn’t, it would be odd that they have recently invested in it as heavily as they have. The pandemic has certainly been a factor in bumping the numbers of TV audiences, having them increase by 5.7% (according to recent Barb data), as well as through the first few months of 2021. As lockdown restrictions eased and the weather improved, March’s numbers tapered off, but such a boost will not easily dissipate, especially with ABC1 adults, additional TV hours are likely to retain the increased viewing.
Another factor involved in the level of trust that people have in advertising online versus that on television. It’s natural to understand that as television has been with us for multiple generations, there is a lot more inherent trust in advertisement derived from it. People understand that big money is paid for ads that air on TV, and conclude that only legitimate brands would afford to advertise through that medium. The trust factor of online advertisement is pretty shaky, however. In that sense, TV has a leg up online in terms of advertising.
Television’s reach, superior trust factor, and the increased show of audiences being able to better recall content is undeniable. However, pairing television advertisements with online AV platforms such as Facebook and YouTube yields an unprecedented audience reach in terms of sheer numbers. For that reason, many brands still maintain television marketing as their primary marketing channel in their advertising budgets, and it will remain securely as such as long as its trust factor upholds and it can continue to influence brands positively.
Strategic partnerships between television and online AV mediums, rather than being at competitive odds with one another, yield continuous value for brands that take advantage of it. TikTok’s exposure through their partnership with Channel 4, for instance, will continue the effort of reaching an audience who may not yet be on the platform, especially if they are outside the Gen Z age bracket.
In summation, the investments made by network broadcasters and streaming platforms over the last few years have created an increased desire for brands to advertise on commercial television. Broadcasters are most certainly aware of the vital nature and yields of such a competition. After all, online is the wave of the future, so keeping television advertisements relevant is more important to the broadcast industry than it has ever been.