TikTok ad spend hit $1 billion in the fourth quarter of 2023, according to MediaRadar data, as advertisers rush to the video-sharing network.
The advertising intelligence agency analyzed TikTok ad spend in 2023, which totaled $3.8 billion. The data indicated that ad spending increased each quarter, from $805 million in Q1 to $1.2 billion in Q4, a 43 percent rise.
According to MediaRadar, approximately 30,000 organizations promoted over 35,000 brands on TikTok in 2023. TikTok was able to generate an average ad expenditure of $954 million every quarter and $318 million per month. November had the biggest spending at $426 million.
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The study found that media and entertainment advertisers accounted for 30% of the total, spending more than $1 billion on TikTok in 2023. This was followed by retailers ($500 million) and technology ($314 million). Amazon, Apple, Comcast, DoorDash, and Disney were the top five advertisers on TikTok this year, spending a total of $284 million.
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“TikTok’s massive growth in recent years provides a key outlet to reach highly engaged, often young audiences as they scroll through their feeds,” said Todd Krizelman, MediaRadar’s CEO and co-founder.
The increase is consistent with a digital ad industry comeback in 2023, with US ad spend returning to growth in the latter half of the year. Meta, Alphabet, and Amazon benefited the most from this rebound, with their combined ad revenues increasing by Facebook over $17 billion year on year in Q4.
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However, given the three tech giants’ unrivaled market share, TikTok’s expansion should not be underestimated. Its Q4 ad sales followed closely after Snap’s quarterly revenues of $1.36 billion. Although the statistic indicates a 5% year-over-year rise, it is Snap’s sixth consecutive quarter of single-digit growth or sales reductions. TikTok’s revenues, on the other hand, have consistently increased by double digits year on year.
According to WARC’s analysis, advertisers are increasing their spending on TikTok at the expense of X, indicating that the ByteDance-owned firm will grow even more this year. However, the long-term viability of TikTok remains uncertain, as it has been banned in various countries, including India, one of the world’s fastest-growing major economies with a young, tech-savvy populace.
The European Commission is also investigating the corporation for suspected violations of the new Digital Services Act, which raises questions about its advertising transparency, addictive design, and protections against hazardous content.
Meanwhile, the Chinese company is battling with Universal Music Group (UMG), which has removed its music library from TikTok after license negotiations failed. “It will be interesting to see how the unresolved fallout with UMG affects advertising on the platform and if the music restriction drives away users who are no longer able to access their favorite artists,” according to MediaRadar’s Todd Krizelman.
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