Chipotle, Marc Anthony see viral growth via TikTok

Brief:

Chipotle Mexican Grill partnered with social influencer David Dobrik to run a "lid-flipping" challenge that went viral on video-sharing app TikTok. The campaign, which urged customers to post videos of themselves flipping the lids that Chipotle uses to package food, generated 110,00 video submissions and 104 million video starts in its first six days, CNBC reported.
Meanwhile, beauty brand Marc Anthony True Professional saw a 60% jump in sales as TikTok users started to share viral videos of themselves using its products, which primarily are sold in discount chains like Walmart and Target. TikTok users, mostly young women, made humorous "before and after" videos of themselves using its shampoo as if they were starring in a commercial, per CNBC.
TikTok is preparing to parlay its massive popularity among Generation Z audiences and ability to drive product sales and brand exposure into ad sales with its first appearance at next week's Cannes International Festival of Creativity, per CNBC.

Insight:

As Chipotle and Marc Anthony have seen, TikTok's promotional power comes from a key video-sharing feature that motivates its users to copy each other’s dance moves, participate in challenges or put their own spin on a meme. While Marc Anthony's sales growth was unplanned, Chipotle crafted its campaign purposefully to make use of TikTok's viral video power. TikTok is well suited for brands that want to reach Gen Z, who watch videos of friends and influencers and use its software tools to make their own.

TikTok hasn't developed a considerable advertising business, at least according to available estimates showing Google, Facebook and Amazon as the top the platforms in the U.S. digital ad market. The app monetizes its user-generated videos from other sources, like sales of virtual currency. However, TikTok boosted sales of its digital coins by about 243% to $5.5 million in February from a year earlier, Sensor Tower estimated. People use the in-app currency to reward their favorite video creators, who can exchange the coins for digital gifts. By making a big splash next week at Cannes, TikTok hopes to raise its advertising profile and attract more big brands.

TikTok, owned by Chinese tech giant ByteDance, is one of the few social media apps with a following that rivals those of Facebook and Google. TikTok was the most downloaded app in Apple’s App Store for the fifth straight quarter, per app analytics firm Sensor Tower. The app was downloaded 33 million times in Q1, ahead of Google's YouTube and Facebook's Instagram, WhatsApp and Messenger. TikTok also had the No. 3 spot in Google Play, behind WhatsApp and Messenger, but ahead of Facebook and Instagram.

However, advertisers still aren't sure about brand safety on the TikTok platform, as the app has landed in headlines for violating childrens' privacy and showing "objectionable" content. TikTok now restricts downloads for kids under 13 as part of a settlement with the U.S. Federal Trade Commission. TikTok also received backlash in India, where Apple and Google in April removed the app from their app stores there amid pornography fears, Quartz India reported. The ban was lifted after two weeks, but cost TikTok 15 million users in the country, per a separate estimate by Sensor Tower.