Even a juggernaut like TikTok is finding its progress hampered by an industry-wide slowdown in digital advertising investment.
Last month, the Financial Times reported that TikTok has “slashed” its worldwide revenue targets for 2022 by “at least $2bn”, as it struggles to keep up with “ambitious” internal goals. The platform had “previously projected revenues between $12bn and $14.5bn this year”, the FT wrote.
The figures reported in the FT article largely tally with WARC Media’s forecast for the coming 12 months. The platform, owned by ByteDance, is expected to achieve global ad revenue of $9.3bn in 2022, up a very healthy 143.4% year-on-year. However, that growth will slow to +41.5% next year, with 2023 ad revenue totalling $13.2bn.
While TikTok’s performance may be stymied by the forces impacting all media owners, it is important to point out it is still forecast to grow significantly faster than all other major digital platforms in 2023, including Instagram (+6.7%), YouTube (+5.6%) and Facebook (-8.6%).
Douyin, also owned by ByteDance and operating primarily in China, is forecast to earn $49.4bn in 2022 (+34.2% year-on-year), rising to $55.5bn in 2023 (+12.4%).
This is underlined by WARC’s recent worldwide survey of over 1,700 marketing executives, published in The Marketer’s Toolkit 2023 report. It found that 76% of brands are expecting to increase investment in TikTok advertising next year. This may be down slightly from 84% last year, but remains a ringing endorsement from the marketing community.
YouTube had the second-highest percentage of respondents saying they expect to increase investment in 2023 (57%), followed by Google (53%), Twitch (50%) and LinkedIn (46%).
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In contrast, nearly a third (30%) of respondents plan to decrease investment in Facebook, with only 23% planning to boost spend with the platform – the first occasion WARC has seen net-negative investment intention towards Facebook in six years. (Credit: WARC)
