What TikTok Marketing Strategies Can Teach Us About Business Decision-Making
Key Takeaways:
- Like NFTs, TikTok is the epitome of momentous trends that can either be viewed as the future of business… or as temporary fads.
- Worldwide mega trends are seldom utterly meaningless. The popularity of TikTok and NFTs may well be fueled by a “fad effect,” but they have nevertheless demonstrated their ability to provide real value. That is, for businesses that have the required capabilities and business drivers.
Let’s make something clear: this blog post was not written by social media strategists in order to help you manage your social marketing investment. You will not learn any TikTok-specific insights to boost your online viewership.
Instead, we’ll consider the rise of social commerce on TikTok as the epitome of these momentous trends that often leave seasoned business leaders wondering, “Is this the future of business, or just a temporary thing?” Alongside TikTok, we will also consider NFTs (Non-Fungible Tokens) and metaverse-related assets, or SPACs.
It goes without saying that trends like TikTok are different from more well-known, underlying trends that impact business spheres. For example, inflation, the rise of hybrid work models, and increased cybersecurity concerns can be analyzed and addressed using data-based models and logical thinking. In comparison, many business leaders struggle to grasp the race for TikTok and for NFTs. This is likely due to being construed as a fad rather than a long-term tendency.
Let’s try to investigate the phenomenon from a business point of view.
The Value Drivers Behind Trends
Worldwide mega trends are seldom utterly meaningless.
Take TikTok. The platform provides opportunity for product marketers to diversify their audiences, benefit from extremely high user engagement, and rejuvenate their brand image. They achieve this by partnering with emerging creative talent. And it pays off: “92% of users globally have taken an action after watching a TikTok”, according to the platform’s data.
With some ad spaces selling for as much as $2.6 million, experts project TikTok to reach a whopping $12 billion in advertising revenue this year. In other words, the social platform creates very tangible value for brands. And it’s not going away anytime soon.
Similarly, there are reasons why experts estimate the market for NFTs — unique digital assets that are traded online and are generally encoded using blockchain technologies — at $41 billion in 2021. In addition to creating new economic opportunities and new outlets for content creators, NFTs offer consumer brands a whole new playing field to showcase their products, grow their communities, boost customer interactions, and more.
It’s true that reliable data about the ROI of brand investment in NFTs is hard to come by. That said, a study estimated that 39% of those using NFTs report they offer the best ROI in their media mix.
Long story short, the popularity of TikTok and NFTs may well be fueled by a “fad effect,” but they have nevertheless demonstrated their ability to provide real value for investors and businesses. And the companies that have managed to establish their footing in these new market spaces are turning it into a competitive edge.
Promising, but Not for Everyone
The solid results reported by some businesses do not mean that embracing trends such as TikTok marketing is hassle-free and comes with guaranteed success. NFT projects, for example, are not that easy to manage. In fact, two thirds of NFT drops end up failing. And against the backdrop of a brutal slump in the cryptocurrency market, even highly anticipated NFT projects recently flopped.
In the case of SPACs — “blank check companies” created with the specific purpose of raising funds to finance an acquisition opportunity within a set timeframe — investors have flocked around investment projects touted by various celebrity sponsors. And many have lived to regret it.
So before engaging in a time- and resource-consuming project, first ensure you have the capabilities to do it right. In fact, when it comes to uncharted territory, it may be a good idea to use the external experts’ services. Even more importantly, you need to see to it that the investment makes sense for your business. Every initiative should be supported by clear goals and objectives.
In other words, you shouldn’t be on TikTok simply to be on TikTok. You should be on TikTok if an analysis of your target audiences, brand identity, and marketing goals justifies it.
It’s All About Agility
To summarize, the answer to the question, “Should my business be on TikTok?” requires building a business case. Just like you would do for any business opportunity.
We’ve established the potential mistake of rushing into new trendy platforms, technologies, and models without having the required capabilities or business drivers. However, it can be just as detrimental for a business that should be on TikTok (considering its industry, type of customer, company size and culture, etc.) to miss out on the opportunity.
The problem is that today’s markets move at the speed of light. The pace of change in technology offering and use cases, consumer digital maturity, supply chains, and markets drastically reduces the lifespan of business assumptions.
Essentially, an organization that had nothing to expect from TikTok or NFTs a few months ago might now find the prospects attractive — and vice versa. This also means that business leaders should keep a close watch on markets and technology development. They should also make sure they have the corporate mindset and capabilities that will empower their organization to move fast once they’ve decided that it’s time for their business to embrace TikTok or other emerging trends.
