TikTok is the biggest advertiser on Snapchat, study says

Brief:

Viral video app TikTok last year was the biggest advertiser on Snapchat, the image-messaging app that's popular with teens and young adults in the U.S. TikTok dedicated 80% of its U.S. ad spending to Snapchat, advertising analytics company MediaRadar said in a report shared with Mobile Marketer.
TikTok made up 4.4% of Snapchat's ad revenue last year, ahead of companies such as Coca-Cola (3.3%), Comcast (3%), Disney (2.4%), Mars (2.3%), AT&T (2.1%), State Farm (1.9%), Pepsi (1.6%), Hershey (1.4%) and Amazon (1.4%), the research found.
TikTok, which last year quadrupled its ad spending from 2018, was also a significant advertiser on websites that target Gen Z audiences such as Tastemade, BuzzFeed and The Dodo, Todd Krizelman, co-founder and CEO of MediaRadar, wrote in the report.

Insight:

TikTok's ad spending on Snapchat makes sense for an app that's seeking to court the same younger audience in the U.S., where 84% of teens own smartphones, according to data from Common Sense Media. Snapchat's parent company Snap claims that the app reaches 90% of people ages 13 to 24, and 75% of 13- to 34-year-olds in the U.S.

Critically, Snap might also not view TikTok as a key rival for the attention of that audience. TikTok is "an advertising partner for us and I think most importantly the value they provide their community is very different than the value we provide ours," Snap CEO Evan Spiegel said during an earnings call last fall.

MediaRadar's report supports other research indicating TikTok's significant presence on Snapchat. TikTok has been the top brand to run app install ads on Snapchat every month since at least September, according to Sensor Tower data cited by Adweek. TikTok had been the top app install advertiser on Facebook as of February 2019, but fell to 40th place a year later as it shifted ads to Instagram and Snapchat, Adweek reported.

TikTok this year will boost its U.S. user base by 22% to 45.4 million as its growth rate slows from the 98% jump of 2019, eMarketer forecast last month. The researcher estimated that TikTok will reach 60.3 million U.S. consumers, or about 27% of social network users, by 2024.

However, TikTok faces growing competition that might hinder its growth in the next few years. Firework, a startup whose social media app lets mobile users share vertical and horizontal videos, along with category stalwarts like Facebook and Instagram, are responding to TikTok's threat by adding similar video-sharing features to their apps. That challenge will likely compel TikTok to maintain or boost its ad spending to support continued growth.