TikTok has been gaining steam for well over a year now, and it’s showing no signs of slowing down any time soon. The Bytedance-owned social media app — known for popularizing quirky memes, lip-synching trends, and user challenges — is beginning to weigh new monetization strategies for the platform.

graphic of tiktok logo surrounded by dollar symbols

According to recent reports from Digiday, TikTok has been currently testing ads across the U.S. and Europe, with a number of stateside users having already reported seeing a skippable, five-second spot for GrubHub. This spot appeared not as a video pre-roll, but rather occurred prior to the overall app launch. Despite the fact that TikTok is still fairly young in terms of its presence in the North American market — and relatively early in its lifespan for ad integration — Digiday noted that while the app was still under its previous moniker Musical.ly, it had already begun shopping ads in the summer before being rebranded into TikTok back in August of 2018.

Digiday also reports that TikTok also has its sights set on the European market. The publication obtained a pitch deck outlining four initial ad products set to be sold in the European market: brand takeover ads, in-feed native video ads (which are fullscreen and skippable, lasting between nine and 15 seconds), hashtag challenge ads, and branded lenses (as popularized by Snapchat all the way back in 2015). According to details outlined in the deck, TikTok also plans to offer marketers measurement tools with the assistance of third-party partners like AppsFlyer, Nielsen, and DoubleClick.

In addition, the pitch deck also broke down TikTok’s demographics in the U.K. (stating they had 3.7 million monthly active users), France (about 4 million), Germany (4.1 million), Spain (2.7 million), and Italy (2.4 million). However, it remains to be seen exactly how much TikTok ads are going to cost — though Digiday reports that the company is quoting $10 CPMs — and exactly how much of these revenues TikTok plans to share with creators.

Creating an ecosystem of effective monetization is key to the viability of any video platform. For example, YouTube incentivizes creators to produce content via ad revenue, whereas apps like Instagram organically lends itself to sponsored posts.

This necessity for effective monetization is inescapable, as evidenced by the downfall of apps like Vine — which, in many ways, is seen as the predecessor of TikTok, but ultimately met its demise as a result of its inability to create monetization prospects for its creators. It remains to be seen how TikTok will be able to successfully integrate advertising, but the future looks bright. The rapid rise in popularity that TikTok has undergone is a clear indication of its staying power, and both marketers and TikTok itself are clearly taking notice.

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