Video sharing app TikTok is seeing massive growth in ad revenue. In fact, estimates suggest that ad revenue for the Chinese company will triple by the end of 2022. Early estimates show that the revenue will hit an unprecedented $11 billion. This will be higher than the combined ad revenues of both Snapchat and Twitter. In 2022, these companies are expected to generate around $5.5 and $4.8 billion in ad revenues respectively.
Over the years, TikTok has become one of the most popular social media apps in the world. It is owned by Chinese company ByteDance and as of today, the video-sharing app has managed to amass nearly 1 billion users all over the world.
Some reports suggest that the amount of time people spend on TikTok is way higher than on other social media platforms. If these trends hold, the app will likely see more and more growth, reaching a point where it will be challenging bigger companies like Facebook and YouTube for ad supremacy.
Besides, nearly $6 billion of the $11 billion the video-sharing app will make this year in ads will come from the US. TikTok has faced major challenges in its efforts to establish its presence in the United States. Former US President Donald Trump even tried to ban it at some point in time.
But the ban failed after Biden came in. It is now clear that TikTok is looking forward to the future and the US market will be crucial for its growth. The US has long held suspicion over TikTok and its spread all over the US.
There have been fears that the data collected on US users could be shared with the Chinese government seeing that in fact, TikTok is a Chinese company. But TikTok has made it clear this will not happen. However, despite the growing ad numbers, the threat of regulatory action by the US government still remains.
While the Biden administration waivered the ban put in place by Trump, there are concerns that the app could be used to spread Chinese misinformation. But so far there is no evidence of that. Besides, it's not just the US that distrusts TikTok.
Even back in China where it is based, Beijing is not TikTok’s biggest fan. But the Chinese government has taken a broader hardline stand on tech companies in the country with the hope of scrutinizing how they use customer data. While TikTok has not been directly targeted by the Chinese government, based on the previous precedent, it’s only a matter of time before this happens.
What remains true is the fact that right now TikTok is one of the fastest-growing social media apps. It is also clear that massive user growth is now translating into a rapid increase in ad revenue. As more and more users get into TikTok, it is entirely possible that the app could grow and become as big as Facebook and even YouTube over the coming years. Besides, there is still potential for TikTok to expand its reach in other countries outside the US.