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The holiday frenzy has already had its soft start for many brands and retailers, and it will shift into high gear in just a few days. And brands have been spending more on TikTok leading up to the holiday season this year, teeing up the platform to play an important role in their holiday marketing efforts.
This is according to Digiday+ Research surveys of more than 400 brand and retailer pros that took place throughout the year in 2021, 2022 and 2023.
To start, Digiday’s survey found that TikTok is becoming more valuable to brands and retailers, specifically when it comes to revenues and branding. While, overall, there hasn’t been a big change in the percentage of brand and retailer pros who said TikTok is at least somewhat valuable to driving their revenues over the last year (81% of respondents said the platform is at least somewhat valuable to their revenues this year, compared with 77% who said the same last year), the story is different when we break out the brands and retailers who said TikTok is extremely valuable to driving revenues.
The percentage of retailer and brand pros who said TikTok is extremely valuable to driving their revenues (as opposed to somewhat valuable or valuable) was already trending up slightly as of last year — 8% of respondents to Digiday’s survey said the platform was extremely valuable to their revenues in 2022, compared with 5% in 2021. However, this year, that percentage saw a very significant spike. Nearly a third of brands and retailers (32%) said this year that TikTok is extremely valuable to driving their revenues — a lot more than last year’s 8%.
And consistently over the last few years, almost all brands have agreed that TikTok is at least somewhat valuable for branding. This year, 96% of brand and retailer pros told Digiday the platform is at least somewhat valuable in this respect, compared with the 92% who said the same last year and the 95% who said so the year before.
But importantly, the percentage of brands and retailers who have said TikTok is extremely valuable for branding has been trending upward. This year almost half of respondents (48%) said TikTok is extremely valuable to their brand, up from 39% in 2022 and just short of one-quarter (24%) in 2021.
TikTok’s growth in value to brands and retailers has led to an increase in investment in marketing on the platform — even since just the beginning of this year. Throughout 2022 and even into the first quarter of 2023, about half of brands said they didn’t put any marketing spend toward TikTok. But in Q3 of this year, 78% of brand pros told Digiday that at least a very small portion of their marketing budgets go toward TikTok. That’s a big jump from the 54% who said the same in Q1.
Interestingly, Digiday’s Q3 survey was fielded at the end of August — less than two weeks before the launch of TikTok Shop. As the platform looks to become the place where users actually purchase the products they see there, it’s likely marketers have upped their TikTok investments as they test whether TikTok Shop will be a successful tactic. We’ll have to wait for future surveys to see whether TikTok maintains these gains.
As part of their marketing investments in TikTok, Digiday’s survey found that brands are purchasing more advertising on the platform this year. It’s important to note, though, that TikTok still has a distance to go to reach the ad-buying status of its more established rivals like Meta’s Facebook and Instagram. But it’s possible that it’s on its way.
More than a third of brands and retailers (35%) said they purchased advertising on TikTok in the past month as of halfway through this year, compared with less than a quarter (24%) at the same point last year. That’s a significant gain — but, for context, 70% of brand and retailers pros said this year that they purchased ads on Facebook, and 72% said the same of Instagram.
According to Digiday’s survey findings, it’s possible that, rather than buying advertising on TikTok, brands and retailers are putting more resources toward the organic content they share on the platform leading up to the holidays. In other words, brands are spending more on creating content specifically for TikTok.
This year, 39% of brand and retailer pros told Digiday that they invest a lot in creating original content for TikTok. Last year, less than a quarter (23%) said the same. Admittedly, this is a bit of a rebound from 2021, when a third of brands and retailers (33%) said they were spending a lot on original TikTok content. But it could also indicate that brands are testing the waters of their organic reach in conjunction with the sales potential of TikTok Shop.
What all of this leads to is how brands and retailers will be approaching TikTok as the all-important holiday season officially kicks off this weekend. And, according to Digiday’s survey, brands’ and retailers’ ramp-up in their TikTok investments will materialize in their holiday marketing strategies this year (more on that in Digiday+ Research’s newly released holiday marketing and commerce report).
Specifically, Digiday’s survey found that 60% of brand and retailer pros said this year that TikTok will grow more important to their marketing plans during the holidays, up slightly from the 55% who said the same last year. Meanwhile, only 4% said the platform will grow less important to their holiday marketing plans this year. (Thirty-seven percent said TikTok’s marketing importance won’t change during the holidays this year.)
We’ll stay tuned in the new year to see if brands find that their TikTok investments pay off during the holiday season, and whether the platform can increase its marketing clout even further in 2024.