It's no secret that right now, TikTok is the fastest-growing social media platform in the world. With TikTok, people can express themselves creatively and have a good time by making short, entertaining films. TikTok may seem like a platform for the kids but with more than 1 billion monthly active users on TikTok, it provides entrepreneurs with a lot of marketing and ad potential.

Though TikTok seems to be the most recent internet phenomenon, it has all the characteristics of a platform that will be around for a long time. That is, providing it continues to offer features that excite and engage its users. It's already demonstrated its capacity to provide an income stream for highly engaged content creators, so we're optimistic it'll continue along this path.

In this post, we'll go through how to use TikTok to grow your e-commerce business. We'll go through the basics and what you should know. 

A Brief History of TikTok

The history of TikTok is as interesting as any video on the app. It was originally created to be a short-video sharing platform in China owned by a company called ByteDance and was marketed towards an older demographic. In fact, it was even called Douyin (which means “to raise the lantern”) until 2018 when the app merged with Musical.ly and was renamed TikTok.

What is TikTok

TikTok is one of the biggest social media platforms right now, with over 1 billion monthly users – 56% of which are based in Asia. The platform allows users to create short videos using pre-set filters and effects that can then be shared with friends or posted online. Videos can be lip-synced to music or can simply be an assortment of clips strung together. Users can also create longer 10-second video posts that play like GIFs.

How do you make money from TikTok?

Since TikTok is a free app, how do you make money on TikTok?

TikTok offers a variety of revenue streams, including brand sponsorships, merchandise sales, and the creation of in-feed ads. Multiple revenue sources give more stability, but the most important element in selecting how to make real money on TikTok is your audience.

The app's users are divided into three categories: creators, influencers, and broadcasters. Each group has a unique method of making money. Broadcasters are essentially making live videos for their viewers. Creators create material that their audience can watch again and over again. Influencers fall somewhere in the middle. As a result of their audience, each group approaches generating money in a different way.

Some of the most common ways users make money on TikTok:

1. Join the TikTok Creator Fund
2. Selling merch to fans
3. Going live and collecting virtual gifts
4. Partnering with influencers or other brands in the TikTok creator marketplace
5. Creating in-feed ads with the TikTok ads manager
6. Crowdfunding projects by collecting donations from fans
7. Collecting “tips” from your audience
8. Starting a Patreon and offering fan subscriptions

3 Tips to Grow Your Business with TikTok

1. TikTok can help establish a genuine relationship with your customers

Research shows that 64% of customers like companies that engage with them. Most customers today want genuine interactions and values like culture, ethics and proper communication are very important.

Brands that are run by “real” people often get the most attention on TikTok. This is because they’re relatable and have those same values. 

For example, during the COVID-19 crisis, brands that demonstrated empathy and practical ways to stay healthy garnered positive attention. Plus, with so many people staying at home over the pandemic, people were looking for and developed new hobbies to get by. In the previous two years, the majority of TikTok's content has been about surviving the lockdowns, discovering new interests, and sharing online purchases.

1. TikTok can help Increase user engagement

TikTok offers many features that help users engage with one another. Celebrities like Kendall Jenner often use the platform to connect with fans and showcase new videos or products. As a result, TikTok has become a popular platform for influencers looking to connect with customers and other influencers who can spread awareness about their products or services effectively.

If you're looking for new ways to engage your audience, TikTok is a great place to start. Hashtag challenges, for example, invite followers to produce new material and then post it on social media using a certain hashtag. The challenge raises brand awareness. Adding influencers can fuel the campaign and keep the momentum going.

Younger companies and brands typically use influencer marketing as its less costly and often more effective than traditional advertising. In fact, 63% of customers said they believe the opinions of influencers more than company marketing.

1. Scale faster by utilizing TikTok

One of the most appealing features of TikTok is that it eliminates the need to hire professional videographers or editors. You may just take out your phone and begin recording, because the more "genuine" a video is, the better.

Video footage featuring company tours, product unboxings, and manufacturing processes is among the most popular forms of branded content available on the platform.

As an alternative, micro-influencers are helpful to startups since they are well-versed in their local markets and have a high level of trustworthiness among the people who live there. There are a smaller number of these influencers, but they appeal to a more specific audience than mainstream influencers.

Another bonus is that TikTok advertising may be filtered by age, gender, and geography, allowing entrepreneurs a more direct channel to engage with the customers they want to target.

TikTok for eCommerce

TikTok is preparing to expand rapidly into eCommerce in the United States. A slew of enhancements to the app have been revealed by TikTok last 2021.

Affiliate Marketing

US-based advertisers have been informed of a new service that enables users to share product links with their followers while also earning rewards on any sales that result from the referrals. 

TikTok has already teamed up with Shopify, the renowned e-commerce platform. The arrangement allows Shopify's million-plus merchants better direct access to TikTok's audience which can drive more transactions.

Shopify merchants are now able to download and install the new TikTok channel app from their app store. They can also create advertising campaigns in the TikTok For Business Ads Manager. 

Partnering with Shopify and allowing people to interact with merchants is already a proven eCommerce approach with Facebook.

Ad Tools

TikTok Pixel, a tool that measures conversions from TikTok ad campaigns, provides merchants with all of the information they need to assess the performance of their TikTok campaign. It keeps  track of user activity like:

• Page browsing
• Adding items to cart
• Placing orders
• Payment completions

This is exciting for entrepreneurs as it can allow them to offer their products to millions of TikTok users even if they do not have a large following of their own.

Shopping Livestream

According to speculations, TikTok is planning to develop its own kind of TV shopping channels for smartphones. TikTok viewers will be able to purchase things featured by their favorite influencers in an endless stream of shopping entertainment.

Though it hasn't officially launched and details about it are still kept secret, it seems to be only a matter of time before virtual shopping will explode especially since Walmart tested a live shopping feature with TikTok at the end of last year.

Self-service Ads Platform

To make TikTok's e-commerce campaigns easier to operate, TikTok is refining its already-innovative Ads Manager. The TikTok advertisements platform comprises a handful of tools to build, administer, track, and launch advertising campaigns.

The self-service ad platform makes running an ad campaign easy enough that anyone can do it. It'll be as simple as filling out an online form with your target audience (demographics) and ad budget, then submitting your ad. You'll start seeing your ad in the video feeds of TikTok users once it's been authorized by the company's in-house marketing department.

Monetizing TikTok

TikTok has also recently released a number of new features to enable creators to grow their channels and brands on the platform. By allowing users to search for specific hashtags related to your video content, TikTok has positioned itself as a must-use marketing platform where brands can reach millions of potential users. This is particularly important for businesses looking to increase brand awareness by capitalizing on social media trends among younger demographics.

Getting started

To start earning on TikTok, you can do it two ways: 1) Build a following as a creator or business channel or 2) Start an ad campaign and promote your product/store/service on the platform.

Self-service advertising was added to TikTok in 2019 which is very similar to Facebook's advertising tool. This made it a lot easier to start an ad than before.

Most advertising on TikTok is done through the TikTok ad account manager, so the first thing you need to do is open a TikTok ads account. Use the name of your brand to start advertising it on TikTok, and start with a good, compelling video.

Build Your Following

Easy to say, but much more difficult to carry out. To get the attention of the TikTok community, you need to spend a lot of time and come up with good ideas. The good news is that you don't need to be a big star on TikTok to run a successful ad campaign.

In TikTok marketing, you can pay well-known TikTok users for their help in getting hashtags seen by up to a billion people.

Forbes released its first ranking of the highest-paid TikTok stars in August 2020:

1. Addison Rae Easterling, $5 million (84.3M followers)
2. Charli D’Amelio, $4 million, (124.3M followers)
3. Dixie D’Amelio, $2.9 million, (55M followers)
4. Loren Gray, $2.6 million, (54M followers)
5. Josh Richards, $1.5 million, (25.5M followers)
6. Michael Le, $1.2 million, (50.1M followers)
7. Spencer X, $1.2 million, (54.7M followers)

TikTok Ads

With a free app, you might think that TikTok relies heavily on ads for revenue. But TikTok's advertising strategy works because they don't bombard their consumers with too many ads while still allowing them to use their app for free. Thanks to non-intrusive ads and an abundance of interesting content, it has maintained its ubiquity. Ads on TikTok come in 4 options:

1. Topview Ads
2. Brand takeover
3. In-feed video
4. Hashtag challenge
5. Branded Lenses

A. Topview Ads

TopView is a new video-based ad format that shows the brand when the app opens, so it can reach more people. It works just like the brand takeover but instead, you’re able to use the In-Feed videos as your ad material. It is a full-screen video ad that plays within the in-feed and can be up to 60 seconds long, offering advertisers a real opportunity to tell a story about their business, product, or service and reach out to a larger audience on TikTok.

The best part of the TikTok TopView ads is that it will show your brand on TikTok when the app opens, so for users who don’t spend a lot of time on TikTok, will see your brand first. It also works well because users often close the app and open it again sometime during the day causing them to see your ad again.

In terms of ads, this is the prime real estate and it can be quite costly just like the brand takeover.

B. Brand Takeover

These are the most effective and disruptive ad offerings. Brand takeovers are full-screen advertisements that show when a user launches the TikTok app. It can be an image or GIF that lasts 3-5 seconds. This ad can then be linked to the brand's landing page or a hashtag challenge. The full-screen ad grabs the user's attention right away, and because it's brief, the length is ideal for maintaining their interest while offering maximum exposure and reach.

Because these ad slots are limited and only accessible for certain categories, only one brand may take over a given category each day. The restriction encourages competition, which raises costs, thus it is essentially only sustainable for huge brands and corporations.

C. In-feed video

On TikTok, users can browse content and see what others are posting. This is done by scrolling on their feed just like on Instagram. In-feed video ads are highly effective because they look just like the other content on the platform — there’s no special design or formatting to make them stand out. They’re also fully native, meaning they don’t disrupt the user experience, making them less likely to be skipped than other ad formats.

It can be up to 60 seconds long and can autoplay with sound. It targets the advertisers’ target audience and shows up like a normal TikTok video which users can interact with by liking, commenting, and sharing. The CTA section can be used to direct people to your landing page or hashtag challenge.

Here are a few examples:

[insert video thumbnail with preview- https://www.youtube.com/watch?v=aJFPQyFuEik]

D. Hashtag Challenge

The hashtag challenge is a great way to boost awareness and your presence on TikTok. It’s an easy way to make use of the already-huge following that TikTok influencers have. TikTok claims that the average engagement rate for this kind of ad is around 8.5%.

Hashtag challenges are usually easy and easy enough for most people to do. With the right challenge, a brand can go viral without having to spend a lot of money on a lot of ads.

The first video is often recorded by a top influencer with a large following, showing them completing a challenge and posting it with the brand’s hashtag. They then ask their followers to take on the challenge and post their own videos under the same hashtag.

One amazing example is Chipotle’s #Boorito Challenge. Last year, Chipotle's annual “Boorito” Halloween promotion offering discounted meals to customers dressed in spooky costume. TikTok, like other businesses, has been increasingly important in Chipotle's advertising efforts. The challenge required people to record videos of their Halloween costume makeovers using a custom sound clip provided by Chipotle.

The top five posts using the #Boorito and #Contest tags would win free burritos for a year. The #Boorito hashtag racked over 3.6 billion views thanks to influencers who helped promote viral videos for the company.

E. Branded AR/Effects

Branded Lenses are another way for TikTok users to be creative with their content. By tapping into the unique features of the app, you'll enable them to have fun with your brand.

This is a unique ad format that works well on TikTok, particularly for Gen Z and Millennial audiences. It's a way to establish yourself as hip and young, and it can go viral quickly.

Companies can get involved in the fun by creating their own branded lenses. For example, they could add a rainbow lens that changes hair color or a cat ear effect that creates ears out of people's hands. These lenses are live filters that users can apply directly to their videos when they record them.

The best thing about these lenses is the ability to interact with them. Brands can create live filters and allow users to add their own video effects in real-time. This adds another level of engagement, one that no other social media platform can match.

It works best when combined with a hashtag campaign. That way, you get all the benefits of branded lenses while also gaining insights into what your audience deems valuable. Also, be sure to use the right hashtags during your lens campaign so that audiences see your content in search results.

Here’s an example from Loreal:

[embed video or TikTok: https://www.tiktok.com/@lorealparis/video/6938720360942587142?is_copy_url=1&is_from_webapp=v1&refer=embed&referer_url=https%3A%2F%2Fpoplar.studio%2Fblog%2Ftiktok-ar-examples%2F&referer_video_id=6938824282168364293]

For Loreal’s Colorista Permanent Gel hair color campaign, users could interact with the effect to see their hair color instantly change to a flattering rose gold offered by the Colorista line, and create a video modeling the new color. The brand also used a Hashtag Challenge associated with the filter, and creators using the L’Oréal Paris effect could tag their videos with the #GoBoldColorista hashtag. The campaign has received 2.8 billion views.

CONCLUSION

Although TikTok ads are not for every business, it is certainly worth considering as a supplement or alternative to costly media campaigns. For some businesses, TikTok may be the solution to a highly targeted audience with limited resources. Be creative and experiment with different types of TikTok ad campaigns. Post engaging content that is tied to your business and remember that video can make all the difference in your game plan. A little effort and commitment on your part will help you determine whether or not TikTok marketing works for you.