How tiktok makes money
TikTok, a social media app owned by ByteDance, generates revenue through several methods:
- Advertising: TikTok offers in-app advertising, including:
- In-feed ads: Short video ads that appear between user-generated content.
- Branded effects: Customizable filters and effects that brands can use to promote their products or services.
- TopView ads: Full-screen ads that appear when users open the app.
- Branded hashtag challenges: Encouraging users to create content using a specific hashtag.
- E-commerce integrations: TikTok has partnered with e-commerce platforms like Shopify and JD.com to enable users to purchase products directly from the app.
- Affiliate marketing: TikTok earns a commission for each sale made through affiliate links shared by creators in their videos.
- Music streaming: TikTok has a music streaming service, Resso, which offers ad-free music streaming and exclusive content. A portion of the revenue generated from Resso goes to the music industry.
- Data analytics: TikTok collects data on user behavior, which can be sold to third-party companies for marketing and advertising purposes.
- Gaming: TikTok has a gaming platform, called TikTok Games, which allows users to play games and earn rewards. The app generates revenue from in-game purchases and advertising.
- Branded content: TikTok allows brands to create sponsored content, such as videos and live streams, which can be monetized through ad revenue sharing.
- TikTok Creator Fund: TikTok has a fund dedicated to supporting creators, which provides them with a share of the ad revenue generated by their content.
- TikTok Live: TikTok's live streaming feature allows creators to earn money through virtual gifts, which can be purchased by viewers and redeemed for real money.
- Partnerships and licensing: TikTok partners with other companies to offer exclusive content, such as TV shows and movies, and earns revenue from licensing fees.
In 2020, TikTok's revenue was estimated to be around $10 billion, with a growth rate of over 200% year-over-year. The app's revenue is expected to continue growing as it expands its user base and introduces new monetization features.