Brands Find TikTok a “sunny place” for advertising

Ever since young Americans began their migration from commercial television to streaming services and social media, advertisers have been searching for the digital equivalent of home shopping channels, a place online where users can engage with ads instead of just clicking past them.

Now they think they’re closer to finding this holy grail of marketing, and it does not look like QVC.

Welcome to the Christmas shopping season at TikTok, where retailers are present like never before, their authentic-looking ads falling between dances, confessions, comedy routines and makeovers.

Young men and women show off shimmering American Eagle tops while pulsating music is played in videos designed to look like they were filmed in the 1990s. A woman in a unicorn picks up a specific brand of cookies on Target to the tunes “Jingle Bell Rock”. A home cook mixes and bakes cinnamon apple cakes from Walmart in 30 seconds, and shows a blue bag from the retailer.

This type of advertising presence would have been unimaginable for retailers last year, when President Donald J. Trump threatened to ban TikTok because of the Chinese parent company, and marketers continued to struggle to figure out how best to reach the platform’s users. But President Biden revoked the executive order in June, and TikTok crossed one billion monthly users in September. As a result, a regular stream of products, from leggings to carpet cleaners, has gone viral on the platform this year, often accompanied by the hashtag #TikTokMadeMeBuyIt, which has been viewed more than seven billion times.

TikTok has worked to make the platform more lucrative for marketers and the creators they work with. And TikTok’s popularity with Generation Z and millennials, lured by its addictive algorithm and its setup as an entertainment destination versus a social network, has made the appeal undeniable for retailers.

“The growth we’ve seen is insane,” said Krishna Subramanian, founder of influencer marketing firm Captiv8, which has about a dozen employees focused on TikTok. “Brands have gone from just testing out TikTok to making it a budget line or creating dedicated campaigns for TikTok specifically.”

Since August, at least 18 public retail brands in clothing, footwear, make-up and accessories have referred to their efforts at TikTok in talks with analysts and investors. The competitors have also noticed it. Instagram, for example, has developed a TikTok-like feature called Reels and has worked to entice creators.

In reports shared with advertisers and obtained by The New York Times, TikTok said that Gen Z users, defined as 18- to 24-year-olds, saw on average more than 233 TikToks a day and spent 14 percent more time on the app than millennials or Gen Xers on a daily basis. TikTok also told an agency that 48 percent of thousand-year-old mothers were on the platform, and that women aged 25 to 34 spent an average of 60 minutes on the TikTok app a day.

TikTok declined to comment for this article, and the numbers it provided to advertisers could not be independently verified.

“TikTok is definitely about a mindset more than anything else,” said Christine White, senior director of media and content strategy at Ulta Beauty, which has increased its TikTok spending. “People go there for many different reasons – they are looking to connect, they are looking to laugh, they are looking for good stories, and they are inadvertently looking to act, whether they know it consciously or not.”

The retailer has used TikTok creators to introduce the addition of Ulta Beauty sections to Target stores and posed a challenge by asking regular TikTok users to showcase their favorite skin care products. Ulta Beauty has also seen sales jump after viral videos involving certain products it has, such as Clinique’s Black Honey lipstick.

“We see a lot of that impulse trading,” White said.

Retailers are increasingly using popular TikTok creators to model or demonstrate their products and encourage store visits. They try out live shopping events, where people can interact with hosts and shop through videos in real time, and other new tools in the app. Brands have also reused the #TikTokMadeMeBuyIt concept with sponsored giveaways branded #TikTokMadeMeGiftIt.

Marketers are now talking about their spending on TikTok, which is owned by the Chinese company ByteDance, the way they discuss more established advertising platforms such as Instagram, Snapchat and Pinterest.

“Last holiday, the thing that really ruined things was Trump trying to mess with TikTok,” said Mae Karwowski, CEO of Obviously, an influencer company that has worked on TikTok campaigns with retailers like Ulta and Zappos. “We had a lot of brands that said they were going to do a lot on TikTok, and then they got really worried. This year, over 60 percent of our campaigns have a TikTok component.”

One of those who benefits from it is Maddison Peel, a 22-year-old in Hebron, Ky., Who posts cooking videos to her account with more than 300,000 followers. She gained a large following this year after a clip she made with a fried chicken and a Cardi B song took off.

Since then, she has worked with brands and retailers such as Heinz, Kroger and Walmart, earning $ 5,000 to $ 10,000 a month. The payments made it possible for her to quit her job at McDonald’s, where she had earned “not even $ 1,000 every other week,” she said.

Retailers will often send her gift cards to buy the products used in her cooking videos. Most of the videos were filmed at home. If she’s filming in a store, she’s trying to go later in the day and take a friend because she said, “I feel a little hard to bring a tripod.”

The longest videos she makes for brands are 45 to 60 seconds long.

“No millennials or Gen Z watch that much TV, so they do not see these ads,” she said, “but when they scroll on TikTok, they see them.”

Ms. White from Ulta is among the advertising experts who said that the efficiency of TikTok’s algorithm set it apart from other popular platforms, and pointed to the fact that it was still at a stage where anyone could go viral – like Ms. Peel and her fried chicken. TikTok asks users to select a few interests when they first join the platform, and then uses video viewing times, likes and comments, and tags on videos such as captions, sounds and hashtags, to tailor the recommendations.

The app’s algorithm then serves a steady stream of short videos showing life hacks, dances, cute animals or comedy routines. More content is available on a Discover page, and users can follow their favorite creators. Marketers can pay to increase their sponsored content.

“You do not get lost and spend hours on Instagram browsing people you do not even know, but on TikTok it definitely happens,” said Mr. Subramanian from Captiv8.

Abbie Herbert, a 25-year-old TikTok creator in Pittsburgh, joined the platform at the start of the pandemic and quickly gathered 10.6 million followers. She has worked with retailers including Pottery Barn, Alo Yoga, Amazon Prime and Walmart, and has entered into more than 100 brand agreements this year.

To begin with, her audience consisted of silly sketches and reaction videos mostly of teenagers. But after she got pregnant and started writing about it, it “opened up a new demographic” of people in their 20s and 30s. In a recent advertisement for Fabletics, she modeled playful clothes after her baby daughter, joked with her drool, and then showed off her own outfit with a touch of self-irony.

“It’s a lot of work to do TikTok,” said Mrs. Herbert, a former model. “Making a brand agreement on Instagram is still a huge amount of work, but TikTok is a completely different ball game because you make an advertisement and try to make it true for the followers and the audience.”

American Eagle, with its teenage audience, was earlier than many brands to TikTok. It has teamed up with great creators like Addison Rae and the stars of the Netflix show “Outer Banks” and experienced its own viral moment with the Aerie brand after an unsponsored review of the leggings spread.

“We are constantly finding that the individual TikTok creators are wearing, selling American Eagle,” said Craig Brommers, marketing manager at American Eagle Outfitters.

With mental health the biggest concern for many young people, he said, TikTok has emerged as a “sunny place” compared to other social platforms.

“TikTok is their happy place to express their true selves, and I think what is known for Instagram these days is that it is too curated and too perfect,” said Brommers.

He added that Facebook and Instagram still ran a significant amount of business for the retailer, but that it was a unique type of expression on TikTok and Snapchat that “was not about likes”.

Anna Layza, 31, from Melbourne, Fla., Has more than one million followers on TikTok, and recently posted an ad that involved wearing a unicorn and picking up a box of cookies on Target. But she said she had mostly posted on Reels these days, which recently started paying her for views of many videos.

“TikTok does not pay you to post unless you have a brand that wants to be in the video,” Layza said. “But Instagram actually pays you and gives you a bonus when you reach a certain amount of views.”

Katrina Estrella, a spokeswoman for Meta, which owns Instagram, confirmed in an email that the company was testing “a number of bonus programs” in the United States as part of a $ 1 billion investment in creators.

Still, retailers are eagerly experimenting with TikTok, especially as they see the app attract older users. Brands want to be ready in case they go viral.

“There are just a few things that are going to catch on or they are not,” Ms. Karwowski from Obviously. “But the TikTok algorithm will really amplify things in a way that can suddenly shift the culture.”

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