Tik Tok’s monetization and commercialization trends!

For commercial products, monetization is an unavoidable issue. Based on the summary of Douyin’s current commercialization behaviors, this article will make bold guesses about Douyin’s possible future commercialization path.

Monetization methods

First, let’s summarize Tik Tok’s current visible monetization methods.

Feed Stream Ads

Advertising is Toutiao’s strong point. In addition to matching users algorithmically, Douyin’s feed ads also have some interesting small attempts that I would like to briefly discuss.

(1) Determine the length of the ad button through A/B testing. I wonder if you have noticed that the length of the conversion button in the Douyin advertisement has undergone several changes - from the initial size to the full-column length, and finally to the current style. The idea behind this should be the same A/B test as the content screening mechanism, that is, to find the button length with the highest click-through rate through testing.

(2) Arouse users’ curiosity by randomly changing the color of buttons. The same is true for advertising buttons. When you first enter the advertisement, each button is transparent, and will change to a different color after a few seconds. For example, the button in the first advertisement will turn blue, and the button in the second advertisement will turn orange. This takes advantage of the user's curiosity about the color of the button, while providing fun for the product and extending the viewing time of the advertisement.

E-commerce traffic diversion

Merchants can use short videos to directly direct users to their product sales pages.

Although Toutiao launched its own e-commerce platform "Zhidian" some time ago, most of the e-commerce traffic visible to the naked eye is still directed to Tmall and Taobao. On the one hand, it may be because the user profile of Douyin is quite different from that of Zhidian. On the other hand, it may be because Zhidian is still in the trial stage and is not suitable for large-scale traffic diversion.

Customized brand advertising

Utilize challenge activities and materials to help big brands customize advertisements and profit from them, such as customized advertisements for #challenge - OPPO Challenge "So You Are Like This", customized advertisements for stickers - Pizza Hut stickers, etc.

Live streaming revenue

It is speculated that it is just a general function follow-up, which directly monetizes by leveraging existing users whose attributes and purposes are similar to those of live broadcast users. There is not much difference between it and other live streaming platforms, so I will not go into details.

DOU+ Quick Push

DUO+ Speed ​​Push is an advertising format recently launched by Douyin. It can be delivered to a specific video and can be operated on mobile devices.

Delivery methods include:

1. Basic targeted delivery, targeting people of limited gender, age, and region;
2. Specify accounts with similar followers and distribute ads to the fans of the specified accounts;
3. Place it in nearby business districts and conduct regional placement within a specified diameter range.

The above are the commercialization methods of Tik Tok that are currently visible to the naked eye. Next, let’s speculate on where Tik Tok will focus its monetization efforts in the future.

Monetization focus

Personally, I believe that Douyin’s future monetization focus will still be “advertising” and “traffic diversion”.

advertise

It is reported that Douyin’s advertising revenue may exceed 10 billion yuan in the next year[1]. It is hard to imagine that such a big piece of cake cannot become the focus of Douyin in the future.

In addition, the advertising skills honed by Toutiao are also a good support for Douyin's advertising journey. For example, based on the delivery of Toutiao, Douyin continued the idea of ​​testing experiments and provided "intelligent delivery". Under this delivery method, Douyin will first use a portion of the delivery funds to conduct a small-scale test, and then conduct large-scale delivery after finding the group with the best delivery effect, so as to achieve the best promotion effect (Note: please refer to the first option of DOU+ Speed ​​Push, the way to call out DOU+ is: just click the "Forward" button on any video).

Finally, TikTok ads do not seem to be that offensive to users, providing TikTok with the possibility of making money without hurting users. Among them, "less disgust" may be attributed to the following:

(1) The advertising style fits the product attributes

Tik Tok is an entertainment product, so the advertisements in Tik Tok are almost all entertainment-style.

1. On the one hand, according to a report provided by App Growing[2], the proportion of “game” ads on Douyin is very high, and the entertainment nature of games themselves fits very well with Douyin’s product tone. Therefore, the effect of placing games on Douyin may even be better than that of the information-based Toutiao.
2. On the other hand, the production of non-game advertising content on Douyin is also trying to fit in with the entertainment attributes, and some are funny, creative, and even weird. For example, Sophie’s creative advertisement also received rave reviews at the time [3].

(2) Mark the word "advertisement" to reduce the cost of skipping

All ads in TikTok are marked with the word “Advertisement” and the cost to skip is very low. Just like seeing a video you are not interested in, you can just swipe up to skip it.

(3) The push frequency can be artificially reduced

After clicking "Not Interested" on the ad multiple times, the push frequency dropped significantly. I did an experiment with a friend. I served as the control group and did not click on the ads to show "not interested". My friends served as the experimental group and frequently clicked on the ads to show "not interested". After 7 days, ads would appear after I scrolled through less than ten pieces of content, while my friends would scroll through dozens or even hundreds of pieces of content without seeing any ads.

In summary, "advertising", a means of monetization with high income, strong capabilities and no harm to users, should be the focus of Douyin in the future.

But at the same time, Douyin's ads seem to have room for improvement. Here are two small suggestions for matching ads with users:

1) Improve the ability to analyze “video advertising content”

Although advertisers can currently choose ads and user types when placing ads, this may not be the best matching method. After all, "people" may not understand users better than "machines" in matching algorithms. If the "video content" can be understood by machines, optimized using methods similar to those used for graphic ads, and reliable suggestions can be provided to advertising video producers, the advertising effect will surely be even better.

2) Create and further enrich user "commercial tags"

User commercialization tags may be different from user interest tags. For example, people who like cute pets do not necessarily have the need to buy pets or pet supplies. Perhaps similar tags already exist on TikTok, but based on the current user experience, there seems to be a lot of room for improvement.

If the above two points are improved, combined with Douyin's existing screening and distribution capabilities, I believe Douyin's advertising will have breakthroughs in experience and revenue.

diversion

E-commerce traffic is also part of Douyin’s revenue source. According to a report provided by App Growing[2], Tmall and Taobao currently account for a large portion of traffic.

But Douyin’s ambition does not seem to stop there. Does the classification module under the “Same City” section look familiar? Food, attractions, fun...wait, huh? Isn’t this what Dianping is doing? Therefore, it is speculated that Douyin’s focus of “traffic diversion” in the future will not only be limited to e-commerce, but will continue to expand to life services.

So how feasible is this thing? It seems not low:

(1) Videos are more expressive

Compared with the text and picture format of Dianping, the video format of Douyin is more conducive to arousing emotional resonance among users and stimulating consumption. Think about it, every time you drool over the delicious food on TikTok at night, have you ever silently noted down the name of the store in the comments and gone there to try it?

(2) Excellent community check-in culture

Do you still remember the "check-in internet celebrity stores" that can be seen everywhere in video titles and comments? Bowl-smashing wine, ice cream, and sky realm. In the fun, delicious, and beautiful atmosphere rendered in the videos, many users traveled to various parts of the country to consume and posted "check-in" videos, while some users who had no conditions to travel far could only silently like them. However, after Douyin launched the function of recommending "Internet celebrity stores" near users, has it further encouraged this atmosphere and made the distribution of life services possible?

(3) Good external environment

I don’t know if you have noticed this, but after a long trip, I have started searching for other life service rating software besides Dianping. As the marketing atmosphere spreads, Dianping's credibility seems to be gradually declining. Does such an external environment create an opportunity for Douyin?

In summary, backed by its own large active user base, Douyin's ability to distribute life services by directly directing traffic to merchants is likely to constitute another monetization point.

However, Douyin still has a long way to go to distribute life services and directly connect with various businesses. Here are some suggestions:

1. If you want to play the "credibility" card well, you will inevitably need to do some "heavy work" of manpower excavation in the early stages, including the discovery of high-quality merchants, manual field exploration and review, etc. Perhaps recruiting "featured" merchants is a good idea. On the one hand, it avoids competing with Dianping in the "mass merchants" dimension; on the other hand, its characteristics are more in line with the tastes of Douyin users.
2. The corresponding functions will be steadily followed up, which may not necessarily be "ratings". Equally persuasive functions such as check-in, popularity, and even "video collections" can help users screen high-quality businesses.
3. Control the rhythm of monetization and move forward steadily in balancing credibility and commercialization.

The above is only my personal opinion. The relevant reference articles mentioned in the article are as follows. Thank you for your valuable time.

Author: lilyblood

Source: Public account: lilyblood