Brief:

• TikTok today introduced a global platform for marketers as part of its first appearance at the Interactive Advertising Bureau's (IAB) Digital Content NewFronts, according to details shared with Mobile Marketer. TikTok for Business is a hub that will host the ByteDance-owned social video app's advertising formats and services for marketers.
• At the same time, TikTok unveiled an augmented reality (AR) ad offering called "Branded Scan" that lets marketers create immersive branded experiences. TikTok announced new partnerships with Bare Tree Media, Subvrsive and Tommy that will help accelerate and scale its development of 2D and 3D technology for brands.      
• TikTok also continues to test Creator Marketplace, a platform that debuted last year in limited release. Creator Marketplace looks to foster deeper collaborations between brands and influencers who have built an established following on the app.

Insight:

TikTok introducing a dedicated hub for marketers is a natural next step for the platform that has exploded in popularity in recent years, but had fairly sparse offerings for brand partners. The TikTok for Business name and format reflect similar offerings from rival social media apps like Instagram, but could still help to streamline TikTok's marketing services and make them more accessible to newcomers.  

The portal's mantra, "Don't Make Ads, Make TikToks," embodies how TikTok tries to position its content differently than other social media sites. Rather than running traditional digital advertising campaigns, brands typically deploy the types of hashtag challenges or other videos that are picked up by the app's feed and have the potential to go viral in an organic fashion, as users are recommended content based on trends they're already interested in watching. 

TikTok's growing audience is likely to bring more brands onto its platform, and pitching ad buyers at the NewFronts marks a new level of maturity for the app. However, TikTok's popularity primarily among younger consumers and teens with limited spending power may not appeal to marketers of big-ticket products. Diversifying ad products could help win over TikTok skeptics.  

Branded Scan, for instance, has been in the works since at least early May, when Digiday broke news about the development of an AR ad format. It's not clear how much TikTok will charge for Branded Scan ads, and whether the pricing will be similar to AR lenses on photo-messaging app Snapchat. Snapchat used to charge $500,000 for an AR lens that appeared nationwide, making it too expensive for smaller marketers, but the price fell after the company added the format to its programmatic auctions, according to Digiday.

Branded Scan follows TikTok's release last year of an ad format called "branded effect" that lets marketers create ads with 2D effects that users can add to videos. The company has been building out its ad platform in several other ways, including a test of an ad format with a call-to-action button that links marketers to social influencers on the video app. Apparel brand Levi's in April touted a test of "Shop Now" buttons that let consumers buy products shown in TikTok videos as well, TechCrunch reported.

Aside from Branded Scan, TikTok's other ad formats have been available before, but are now centralized under TikTok for Business. Those formats include its "TopView" product that shows a brief video snippet as users open the app, along with brand takeovers, in-feed videos and hashtag challenges that urge people to participate in marketing campaigns by sharing their own content. TikTok provides tools for users to quickly make videos, add effects and choose a soundtrack. The addition of AR effects could help brands boost engagement with TikTok's users.

For TikTok, the new marketing services hub and first-ever appearance at the NewFronts come as parent company ByteDance seeks to establish stronger ties with advertisers, build on its momentum and monetize its user base. ByteDance's revenue surged 130% to $5.64 billion in Q1 2020 from a year earlier, and the company is targeting 2020 revenue of about $28 billion, Reuters reported, citing people familiar with the company. As part of its effort to grow advertising revenue and expand worldwide, TikTok last month hired Kevin Mayer, former head of Disney's recently launched video streaming service, as its new CEO. TikTok is also seeking to diversify its content away from dance and music videos with expansion into more live broadcasts and educational content.

The coronavirus pandemic has helped to drive a surge in social media usage that has benefited TikTok. The app in Q1 added more than 12 million unique U.S. visitors to its app, mobile website and desktop site, bringing its total to 52.2 million, per Comscore data cited by researcher eMarketer. In the U.S., average time spent on TikTok's app and websites rose 56% to about eight hours -er user in March from six months earlier, compared with about five hours on Instagram. That high level of engagement has led brands such as American Eagle Outfitters, Burger King, E.l.f. Cosmetics, NYX Professional Makeup, Mondelez's Oreo cookies and Warner Bros. to recently develop campaigns for TikTok.