In the eyes of mainstream American social media, they now have a common enemy, which is Tiktok, the overseas version of Douyin. "TikTok is a problem for all social media giants," said Laura Hoy, a stock analyst at British financial services company Hargreaves Lansdowne. "TikTok is doing the same thing in the same field. This is the problem with social media. People are fickle, and you never know how quickly their attention will change." TikTok is unstoppableIn August 2020, TikTok released detailed global and U.S. monthly active user data for the first time, demonstrating the company's rapid growth. TikTok revealed at the time that about 11 million Americans used its app in January 2018. But since then, its U.S. monthly active users have grown by nearly 800% to about 100 million. Data shows that around January 2019, TikTok's monthly active users in the United States more than doubled to about 27 million. By June 2020, after several months of isolation due to the COVID-19 pandemic, TikTok's total number of monthly active users in the United States soared to more than 91 million. In August 2020, Tiktok's monthly active users in the United States exceeded 100 million, and its daily users exceeded 50 million. At the same time, TikTok's global growth is unstoppable. TikTok said that as of January 2018, it had about 55 million monthly active users worldwide. By December 2018, this number had skyrocketed to more than 271 million, and by December 2019 it had increased to 507 million. In August 2020, TikTok's global downloads exceeded 2 billion times. In September 2021, Tiktok announced that its global monthly active users had reached 1 billion. Former friendsIn October 2019, when asked whether TikTok was a friend or an enemy, Evan Spiegel, CEO of Snap, the parent company of the ephemeral messaging app Snapchat, chose the former. “We definitely consider them a friend,” Spiegel told investors during Snap’s third-quarter 2019 earnings call. “They’re a developer partner. They become an advertising partner with Snap Kit (developer platform). I think the most important thing is that the value they provide to their community is very different than the value we provide to our own community.” Now, however, his view of TikTok may not be so kind. Snap's dismal second-quarter earnings report this week reaffirmed the slowdown in advertising spending. It also showed that TikTok continues to grab market share while hitting more established social media competitors. Of course, Snap and other large technology companies have also been affected by Apple's privacy policy changes, and economic uncertainty, supply chain disruptions and the war between Russia and Ukraine have made them even worse. Public Enemy NowBut major U.S. social media companies are increasingly blaming TikTok for their troubles. Facebook-parent Meta and Snap even acknowledged the threat of TikTok in recent earnings calls. Snap's second-quarter revenue was disappointing, causing its stock price to plummet 25%. The company said it would freeze hiring in response to slowing demand. Analysts are worried that Snap is being replaced by TikTok. Snap CFO Derek Anderson acknowledged the impact of TikTok on a conference call. "Competition, whether it's with TikTok or any other very large, mature company in the space, is intensifying," he said. Snap's user base is mainly concentrated in Generation Z (generally referring to those born after 1995), which makes it particularly vulnerable to TikTok, which has quickly become popular among the same age group. According to data released by research firm Forrester Research, TikTok is also "more sticky." Among online adults aged 18-25 in the United States, 42% believe that TikTok is addictive, while only 21% believe that Snapchat is addictive. Jasmine Enberg, principal analyst at research firm Insider Intelligence, noted that while Snap was once a communications app first and foremost, it has also begun to move into TikTok's short-form video space as its Spotlight content creation feature has grown. In addition to Snap, TikTok is also a major concern for Meta, which has adjusted several core products this year and recently put its TikTok competitor Reels at the forefront of Facebook and Instagram users to increase engagement with its short video streams. Facebook and Instagram are being abandonedAmerican users are abandoning Facebook and Instagram in favor of TikTok and Snap. According to data from app analytics platform Data.ai, in the first quarter of this year, the time spent on the platform by each TikTok user increased by 40% year-on-year, and increased by 140% compared to the first quarter of 2020. Both indicators exceeded Facebook and Instagram. “While they can copy and paste the features that have made TikTok hugely successful, they can’t copy and paste TikTok’s thriving community and creator community. That’s an area they need to continue to invest and double down on,” said Mike Proulx, vice president and research director at research firm Forrester. Meta highlighted the growth of its short-video feature Reels, saying it is the company's fastest-growing content format, accounting for more than 20% of the time users spend on Instagram. Zuckerberg Facebook has redesigned its app to better compete with TikTok. As a result, the adjustment has made Facebook no longer focus on connecting with friends and acquaintances. Now, it has launched an addictive scrolling experience similar to TikTok, which algorithmically provides users with videos, pictures and other posts that it thinks you will like. This means that users are more likely to see random pet videos or get recipes from cooking influencers rather than posts from friends the user follows. The adjustment has caused dissatisfaction among some users because they only want to follow posts from friends. For example, the Kardashian sisters expressed dissatisfaction with Instagram's emphasis on short videos and demanded a return to the past design. Investment bank Bernstein said in a research report that Google's video site YouTube benefited from people being stuck at home and watching videos in the early stages of the epidemic, but its performance in the past two quarters has been disappointing and it faces "a strong direct threat from TikTok and broader ad-supported video competition from companies such as Netflix and Disney." In terms of user usage time, TikTok has surpassed YouTube. Data from app analytics company App Annie shows that users spend an average of 23.6 hours per month on TikTok, compared to 23.2 hours on YouTube. YouTube has also launched its own short video feature "Shorts", and said that the average daily views of short videos exceed 30 billion, four times that of a year ago. But some ad buyers say neither YouTube’s shorts nor Meta’s Reels have attracted enough user interest to warrant significant advertising. The Nature of Competition: Advertising RevenueResearch firm Insider Intelligence ranks TikTok as the third-largest social platform in the U.S. after Facebook and Instagram. The firm predicts that TikTok's digital advertising revenue will triple this year to nearly $12 billion, with a market share of 1.9%, surpassing Twitter and Snapchat combined. TikTok's advertising revenue to grow to $12 billion this year TikTok's breakneck growth affects each platform differently. It's in more direct competition with social entertainment apps like YouTube than Snap's messaging products. But when it comes to advertising revenue, everyone is vying for the same piece of the pie. “Spiegel and his team are right to argue that Snapchat usage is unaffected by TikTok,” said Rich Greenfield, co-founder of venture capital firm LightShed Partners. “But the problem is that there is competition for ad budgets, and it’s probably more intense than he realizes. Now they’re dealing with the ad monster that is TikTok, which puts pressure on Meta, YouTube and everyone.” At a time when companies like Snap are innovating to keep up, a slowing economy may be limiting their ability to do so. Meanwhile, TikTok has been rapidly copying features from other companies. |
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