Do Business Accounts Make Money on TikTok?
When it comes to making money on social media, TikTok is one of the hottest platforms for businesses right now. Back in June 2021, TikTok officially hit over 1 billion monthly active users, cementing it as one of the most popular social networks in the world.
What is TikTok?
TikTok is a short-form video sharing and social networking platform owned by the Chinese company ByteDance. It allows users to create, share, and discover user-generated videos that are usually between 15 seconds to 3 minutes long. TikTok combines entertainment with creative tools, allowing users to add music, filters, and effects to their videos.
Although TikTok officially launched in September 2016, it skyrocketed in popularity in 2018 when ByteDance acquired Musical.ly and merged it with TikTok. This allowed TikTok to tap into Musical.ly’s existing user base. As of 2022, TikTok has over 1 billion monthly active users worldwide and has been downloaded over 3.3 billion times on app stores.
A key factor behind TikTok’s rapid growth is its algorithmic feed which analyzes each user’s interests and preferences to serve them personalized video recommendations. This creates an addictive, endless scroll experience that keeps users engaged. The app has become a platform for viral challenges, trends, and meme sounds that get widely adopted and replicated among users.
Tiktok’s Popularity
TikTok has experienced massive growth in users over the past few years. According to Backlinko, TikTok now has over 1 billion monthly active users [1]. This is up from 689 million global active users in July 2020 [2]. TikTok’s userbase now accounts for approximately 23% of all internet users globally.
The growth has been particularly strong among Gen Z users. Over 60% of TikTok’s global audience is between the ages of 10 and 29 according to Backlinko [1]. The app’s short form video format and powerful algorithm seem to resonate strongly with younger demographics.
TikTok’s largest userbase comes from China, followed by the United States. However, the app has seen rapid adoption in markets like India, Brazil, and Russia as well. Its growth has allowed it to quickly become one of the top social media platforms globally.
Monetization options for businesses
There are several ways businesses can make money directly on TikTok:
Advertising
TikTok offers advertising options like video ads, brand takeovers, in-feed videos, and branded effects that businesses can leverage to promote their products. According to one report, https://blog.hootsuite.com/how-to-make-money-on-tiktok-4-easy-strategies/, major brands like Chipotle, Levi’s, and Ralph Lauren have successfully used TikTok advertising to increase brand awareness and drive sales.
Influencer marketing
Partnering with popular TikTok creators allows businesses to tap into their audience. According to one article, https://www.bloomberg.com/news/newsletters/2022-06-28/how-does-tiktok-make-money-app-relies-on-a-few-main-ingredients, companies often pay TikTok influencers to showcase their brand through sponsored content.
Affiliate links
TikTok creators can include affiliate links in their profile bios and videos, earning a commission when followers purchase through those links. Many businesses offer TikTok affiliate programs as a way to drive sales.
Ecommerce
TikTok has ecommerce capabilities that allow retailers to add “Shop Now” buttons to drive product sales directly within the app. According to one source, livestreamed shopping events on TikTok have generated major sales for brands.
Advertising
Businesses can advertise directly on TikTok through their self-serve ad platform to reach TikTok’s audience of over 1 billion monthly active users https://influencermarketinghub.com/how-much-do-tiktok-ads-cost/. TikTok offers several different ad formats including in-feed video ads, brand takeovers, hashtag challenges, and more.
TikTok provides robust analytics and targeting options to advertisers. You can target users based on demographics, interests, behaviors, and more. Their platform allows you to track clicks, impressions, reach, video views, and conversions.
The minimum spend for TikTok ads is $500 per campaign. Their ads are sold on a cost-per-thousand impressions (CPM) basis, starting at around $10 per 1000 views https://www.varos.com/blog/tiktok-ads-cpm-cost. Overall, TikTok ads can be an effective way for businesses to reach a large, engaged audience on the platform.
Influencer marketing
Partnering with influencers is a popular way for businesses to promote their products and services on TikTok. Influencers are creators who have built a large, engaged following on the platform. Businesses will partner with influencers by paying them to create sponsored posts featuring their products.
According to Impact.com, typical influencer rates on TikTok are:1
- Micro-influencers (10,000 – 50,000 followers): $100 – $500 per post
- Medium influencers (50,000 – 500,000 followers): $500 – $5,000 per post
- Macro-influencers (500,000 – 5 million followers): $5,000 – $10,000 per post
- Celebrity influencers (over 5 million followers): $10,000+ per post
Rates vary based on the influencer’s follower count, engagement rates, and content production quality. Businesses should thoroughly vet potential influencer partners to ensure their audience and content aligns with the brand’s goals.
Affiliate Links
One way businesses can monetize their TikTok audience is through affiliate links. TikTok allows users to add links in their bio, creating an opportunity to drive traffic and sales. For example, an influencer can include affiliate links to products they recommend in their bio. When followers click on those links and make a purchase, the influencer earns a commission.
According to a case study from Debutify, influencer @hypeauditor drove over $80,000 in sales using affiliate links in her TikTok bio. By consistently promoting relevant affiliate offers to her 775,000 followers, she was able to generate significant revenue. This demonstrates the sales potential for businesses that leverage TikTok’s affiliate link feature.
Ecommerce
TikTok has introduced new features to facilitate ecommerce and selling products directly through the app. According to an Insider Intelligence report, TikTok Shop became available across the US in September 2022. The report forecasts that TikTok will have 33.3 million US social buyers in 2023 (source).
TikTok Shop allows businesses to showcase their products and enable users to make purchases without leaving the app. Users can access Shop through personalized recommendations, LIVE streams, and creator videos. According to Root Digital, data shows that 5.7% of TikTok users made purchases on the app in 2020, and this figure is expected to reach 27.3% in 2023 and 39.9% by 2026 (source).
Another Statista report indicates that the share of TikTok users making purchases on the platform will reach 37% by 2023 (source). This highlights the growing opportunity for businesses to leverage TikTok’s ecommerce features to drive direct sales.
Case Studies
Brands have seen great success running campaigns on TikTok. According to TikTok’s own case studies, the app has delivered strong results and return on investment (ROI) for brands across many industries.
For example, Chipotle saw a 21% lift in unaided awareness and a 4-6x ROI from its #ChipotleLidFlip challenge that encouraged users to flip Chipotle lids. Fashion brand Guess increased site traffic by 33% and lower funnel conversions by 40% using TikTok’s collection ads. And Maybelline saw a 45% increase in ad recall with its Branded Hashtag Challenge for the launch of its TattooStudio eyeliner.
TikTok’s immersive, entertaining ad formats lend themselves well to branded campaigns. Brands that lean into creating fun, engaging challenges and effects for users tend to see the most viral success. Overall, case studies show that TikTok can deliver strong branding results and ROI for advertisers. But brands need to think creatively to stand out and get users excited to participate and share.
Conclusion
In summary, TikTok offers various monetization opportunities for businesses looking to turn their accounts into money-making ventures. While the platform is still evolving its monetization features, the current options of advertising, influencer marketing, affiliate links, and ecommerce allow companies to generate revenue directly from their TikTok presence. The key is finding the right approach that aligns with your brand and audience.
As TikTok continues to grow, new money-making features will likely emerge. But already, the platform has proven itself a worthwhile investment for brands seeking expanded reach, engagement, and sales. With proper strategy and creativity, businesses can absolutely turn their TikTok accounts into profitable channels. The users and capabilities are there; it’s up to brands to seize these monetization chances on one of the world’s fastest growing social media platforms.
