TikTok grows rapidly as U.S. companies strengthen competitive measures
International Business News – Competition among companies around shooting and sharing short video services is intensifying. That’s because of a surge in users of TikTok, which originated in China, and the growing use of it by companies for advertising. Meta in the United States and Google in the United States, which operates YouTube, have strengthened their response measures, and short videos are becoming the new main battlefield of the Internet
“The opportunity was when I posted a video on TikTok last November of eating Korean-style corn dogs with my dog,” said Ashley Lee (28), who lives in Los Angeles, USA. The video was about 20 seconds long, and the number of views grew rapidly, and her follower count exceeded 1 million within 8 days.
Ashley started photographing food about five years ago, posting it on Instagram, the image-sharing app run by Meta, and what changed her life was TikTok. After going viral last November, she quit her real estate job to focus on video production. The increase in commissions asking her to recommend products to fans, “revenues are higher than before”.
The backdrop is the rapid growth of TikTok.
In 2016, China ByteDance started related services, and in 2017, it acquired a peer company in the United States to fully expand overseas markets. Despite headwinds such as attempts by former U.S. President Donald Trump to ban exploits, the global monthly user base continues to increase, surpassing 1 billion in September 2021. Especially the number of young users is large.
U.S. Insider Intelligence predicts that TikTok’s U.S. ad revenue in 2022 will surge 2.8 times that of the previous year, reaching $5.96 billion. The trend of marketing through influencers with large followings is also expanding.
On the other hand, Instagram and others have been affected. “TikTok is a huge competitor, maintaining rapid growth,” Meta’s CEO (CEO) Mark Zuckerberg showed a sense of crisis. From the perspective of the company’s operating income from January to March 2022, due to the impact of intensified competition, the year-on-year growth rate fell to the lowest since listing (7%). YouTube’s operating income also fell short of market expectations.
Meta launched “Reels” to counter TikTok, pushing users to take advantage of Instagram and others to shoot and share short videos of up to 90 seconds. Zuckerberg said in April that “more than 20 percent of Instagram usage time comes from Reels.” A TikTok-like feature that displays recommended videos across the entire screen was introduced experimentally in June.
Google is also stepping up its “short video” business on YouTube, which can shoot and share videos up to 60 seconds long. Announced on June 15, more than 1.5 billion users log in to YouTube and watch short videos every month. Neil Mohan, chief product officer of YouTube, said, “It’s just the beginning, but I believe short videos will become YouTube’s main function.”
Google announced at a briefing on its advertising business in May that it has fully started serving ads through short videos. The mechanism is to insert short advertisements between videos to drive users to purchase goods and applications. Currently, the $100 million fund created in 2021 is used to pay video producers for contributions. If the advertising business is on track, the source of funds for paying UP masters will increase.