TikTok is putting short-form videos in the spotlight with video advertising expected to balloon to US$53.7 billion across the Asia Pacifc by 2023, according to forecasts by Forrester.
The video-sharing app, owned by Chinese company ByteDance, is currently building its content creator community in Australia.
The latest forecasts for Asia Pacific by market research group Forrester shows the popularity of TikTok is spreading with more than 700 million monthly active users globally.
In 2018, social video ad spending was US$6.7 billion in Asia-Pacific. This is expected to grow to US$24.6 billion by 2023. A significant portion of this will go to the Chinese market where TikTok is based.
At the same time, social video ad spend will increase its share of online video advertising from 32% to 46%.
The report also estimates that TikTok could be making anywhere from $US2.6 million ($AU3.7 million) to $US9 million ($AU12.9 million) in Australia.
Forrester says the success of TikTok comes from its ability to adapt to local market. It also allows users to share videos on other platforms such as Instagram and WeChat with a TikTok watermark which drives its awareness and popularity.
“Platforms like Instagram and Facebook encounter strong competition by TikTok in Asia,” the report says.
“In just a year, TikTok has attracted 200 million users in India, compared to 300 million existing users on Facebook.”
The app is currently available in 150 markets, in 75 languages, and has been ramping up its presence in Australia.
Other short-form video apps such as Vine had been shut despite their popularity due to their failure to find a revenue stream. However Forrester says TikTok has become the first to monetise the format.
“TikTok managed to monetize its offering within one year of its launch through a variety of revenue models like in-app purchase of coins and virtual gifts, but advertising accounts for most of its revenue,” the report says. “Brands are increasingly collaborating with TikTok to reach younger consumers in Asia.”
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