What TikTok Marketing Strategies Can Teach Us About Business Decision-Making
- Like NFTs, TikTok is the epitome of these momentous trends that can either be viewed as the future of business… or as temporary fads.
- Worldwide mega trends are seldom utterly meaningless. The popularity of TikTok and NFTs may well be fuelled by a “fad effect”, but they have nevertheless demonstrated their ability to provide real value — at least for businesses that have the required capabilities and business drivers.
Let’s make something clear: this blog post was NOT written by social media strategists in order to help you manage your social marketing investment. You will NOT learn any TikTok-specific insights to boost your online viewership.
Instead, we’ll consider the rise of social commerce on TikTok as the epitome of these momentous trends that often leave seasoned business leaders wondering: “Is this the future of business, or just a temporary thing?” Other examples include NFTs (Non-Fungible Tokens) and metaverse-related assets, or SPACs (Special Purpose Acquisition Companies — a financial investment mechanism which saw its popularity skyrocket over the past months).
While other key underlying trends that impact business spheres — such as inflation, the rise of hybrid work models, increased cybersecurity concerns, etc — can be analyzed and addressed using data-based models and logical thinking, the race for TikTok and for NFTs is harder to grasp for many business leaders, as it can be construed as a fad rather than a long-term tendency.
Let’s try to investigate the phenomenon from a business point of view.
The Value Drivers Behind Trends
Worldwide mega trends are seldom utterly meaningless.
Take TikTok. The platform is an opportunity for product marketers to diversify their audiences, to benefit from extremely high user engagement, and to rejuvenate their brand image by partnering with emerging creative talent. And this pays off: “92% of users globally have taken an action after watching a TikTok”, according to the platform’s data.
With some ad spaces selling for as much as $2.6 million, TikTok is projected to reach a whopping $12 billion in advertising revenue this year. In other words, the social platform creates very tangible value for brands and is not going away anytime soon.
Similarly, there are reasons why the market for NFTs — unique digital assets that are traded online and are generally encoded using blockchain technologies — was estimated at $41 billion in 2021. In addition to creating new economic opportunities and new outlets for content creators, non-fungible tokens are offering consumer brands a whole new playing field to showcase their products, grow their communities, boost customer interactions, etc.
Although reliable data about the ROI of brand investment in NFTs is hard to come by, a study estimated that 39% of those using NFTs report they offer the best ROI in their media mix.
Long story short, the popularity of TikTok and NFTs may well be fuelled by a “fad effect”, but they have nevertheless demonstrated their ability to provide real value for investors and businesses. And the companies that have managed to establish their footing in these new market spaces are turning it into a competitive edge.
Promising, but Not for Everyone
The solid results reported by some businesses do not mean that embracing trends such as TikTok marketing is hassle-free and comes with guaranteed success. NFT projects, for example, are not that easy to manage: in fact, two thirds of NFT drops end up failing. And, against the backdrop of a brutal slump in the cryptocurrency market, even highly anticipated NFT projects recently flopped.
In the case of SPACs — “blank check companies” that are created with the specific purpose of raising funds to finance an acquisition opportunity within a set timeframe — investors have flocked around investment projects touted by various celebrity sponsors, and many have lived to regret it.
So, before engaging in a time- and resource-consuming project, you need to make sure that you have the capabilities to do it right. When it comes to a foray into uncharted territories such as crypto markets or new social platforms, it may be a good idea to avail yourself of the services of external experts. Even more importantly, you need to see to it that the investment makes sense for your business. Every initiative should be supported by clear goals and objectives.
In other words, you shouldn’t be on TikTok simply to be on TikTok. You should be on TikTok if an analysis of your target audiences, brand identity and marketing goals justifies it.
It’s All About Agility
So, the answer to the question “Should my business be on TikTok?” basically requires building a business case — just like you would do for any business opportunity.
We’ve established that rushing into new trendy platforms, technologies, and models without having the required capabilities or business drivers can be a mistake. However, it can be just as detrimental for a business that should be on TikTok (considering its industry, type of customer, company size and culture, etc) to miss out on the opportunity.
The problem is that today’s markets move at the speed of light. The pace of change in technology offering and use cases, in consumer digital maturity, in supply chains and markets is drastically reducing the lifespan of business assumptions.
This basically means that an organization that had nothing to expect from TikTok or NFTs a few months ago might now find the prospects attractive — and vice versa. This also means that business leaders should keep a close watch on markets and technology development. They should also make sure they have the corporate mindset and capabilities that will empower their organization to move fast once they’ve decided that it’s time for their business to embrace TikTok or other emerging trends.