TikTok is steadily growing as a marketing channel for brands in the U.S.

Despite past discussions of the U.S. potentially banning TikTok, users have flocked to the video-focused app. The social media platform is on track to reach 1.2 billion active users in 2021, according to mobile data and analytics company App Annie’s State of Mobile 2021 Report. And retailers are noticing.

Many merchants are using TikTok to organically connect with consumers. Plus, in mid-2020, TikTok created its ad platform, “TikTok for Business,” which allows retailers to better target shoppers.

The ad platform allows retailers to pay for several types of ads, including:

  • TopView: A video ad that plays in a user’s in-feed post after launching the TikTok app.
  • In-feed ads: These last up to 60 seconds and are video ads appearing in a feed between user-created videos.
  • Branded Effects: Custom-made shareable effects users can place in their posts such as stickers, filters or other special effects.
  • Brand Takeover: Full-screen ads that automatically play the second a user opens the TikTok app. They can be targeted and include links to product pages.
  • Branded Hashtag Challenges: Trending hashtags that TikTok users share on their own videos. Branded Hashtag Challenges can be either organic or paid challenges by paying to have the challenge appear on TikTok’s Discover banner.

Mass merchant Walmart Inc. is one retailer that says it recently generated positive results from a livestreaming, in-app shopping campaign on TikTok. However, other retailers like beauty merchant Lush are trying to tap into TikTok’s billions of users organically without spending ad dollars.

But while TikTok has been a successful social channel for some retailers, others, like the small business Black Ink Coffee, have had to abandon the platform after poor results.

“We got a lot of views, but no sales,” says Parker Russell, CEO and founder of Black Ink Coffee. “I mean zero—not one coffee bean was sold.”

However, now might be the time for merchants to experiment with this nascent platform, while ad costs on the channel are low compared with other social media platforms, says Brian Meert, CEO of digital advertising agency AdvertiseMint.

“Remember that [TikTok’s] ad platform is still very new, and we’ve seen a few instances where ads were targeted towards an audience in the United States, but the majority of the traffic came from another country,” Meert says.

What’s more, the amount of time consumers spend in the app is a convincing reason for retailers to at least try out the relatively inexpensive marketing channel. TikTok outpaced all other top social media apps in hours spent per U.S. user in 2020 at an average of 21.5 hours per month, according to App Annie. Comparatively, consumers spent 17.7 hours per month on Facebook, the second most-used social app, according to the study.

Walmart tests new features on TikTok to get closer to shoppers

Walmart and ecommerce software company Oracle Corp. won the bid to become majority shareholders of the newly created TikTok Global. The deal would have allowed TikTok to bypass former-president Donald Trump‘s August 2020 executive order banning U.S. operations of the social media channel. Trump issued the ban because of security issues concerning TikTok’s parent company, Chinese-owned Bytedance, having access to U.S. TikTok users’ data.

However, that deal has since been indefinitely shelved by the Biden administration, according to the Wall Street Journal. Walmart and Oracle could still broker a deal with TikTok, but that would come down to the Justice Department’s decision on whether or not it would defend Trump’s initial executive order.

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