It didn’t take long for TikTok to transform from a fledgling social media platform with questionable legal presence in the U.S. into one of the most popular apps around.
TikTok was the most downloaded app of its kind last year, with more than 82 million downloads, and it continues to gain traction from consumers and advertisers every day.
As the social media app matures, it has quickly become a platform used to drive fashion trends among the Gen Z audience.
Retail advertisers are expected to spend a huge amount of money on TikTok via influencers or ad placements. How are they currently spending on digital advertising as a whole and other formats?
TikTok is perhaps the most powerful influencer marketing tool for retail
We’ve known that influencer marketing is powerful—but it has risen to a whole new level with TikTok. A quick video of a creator dancing can cause a massive sellout of the latest clothing piece.
When Hannah Schlenker danced to Drummer Boy, wearing unique leggings from Aerie, the video sparked over ten thousand comments. It was a lucky day for Aerie: the pants quickly sold out and caused the company email inbox to fill up with over 130,000 waitlist requests.
MorningBrew spoke to American Eagle CMO Craig Brommers who commented, “What TikTok creators wear, American Eagle sells.”
Teens go to TikTok to see what fashion is trending under hashtags, like #fashionhauls and #OOTD (outfit of the day).
“TikTok has the ability to make something go viral much quicker than anything we see on Instagram,” said Jessica Ramirez, retail research analyst, CNBC. “For retailers, that is a huge advantage.”
TikTok knows its power. Even though its model is not as mature as Facebook’s yet, it’s charging up to $2 million a day for top advertising spots later this year. And a hashtag challenge that lasts three days can cost a brand $500,000, not including the production and creator fees.
Those advertising numbers may be a big barrier for smaller brands, but TikTok is partnering with local organizations and small businesses to train them on successful influencer marketing practices.
“Businesses of all sizes are using the magic of the TikTok community to reach new audiences and expand their business — whether it’s a startup or an iconic local business,” said Becca Sawyer, TikTok’s Global Head of SMB. “Our goal is to give every business owner in America the same opportunities as the biggest brands and to help them turn their dreams into a reality.”
According to eMarketer/Insider Intelligence, U.S. spending on influencer marketing across social media will come close to $4 billion this year. This is an increase of 34% from last year.
As retail brands gear up for this increased spending, let’s take a look at current advertising trends.
Overall, we’ve seen the retail sector slightly reduce their spending so far this year compared to last. 3.2k apparel brands have spent $529.7mm on advertising across print, television and digital formats so far. This is a decrease of 6% in spend from 2020, when 2.5k brands spent $565.3mm.
When we look closer at the different formats, we can identify certain patterns.
Trend #1: Print is Down
All of the lost spending from retail has come from print. Print spending has fallen from $340.5mm in 2020 to $249.4mm in 2021.
But print isn’t obsolete among some brands.
Top fashion houses continue to heavily invest in print advertising. Print spend from Louis Vuitton, Dior, Gucci, Chanel, Prada and Hermes totaled $95.9mm, 38% of all apparel print spending in 2021 so far.
But that doesn’t mean they aren’t shifting some of their budgets.
Luxury brands, such as Louis Vuitton, Fendi and Gucci, joined TikTok last year. Though most of these brands have been slow to gain followers, some are leading the way in hashtag challenges and influencer marketing.
Moncler put together a powerful hashtag challenge in December featuring top influencers, including Charli D’Amelio. Moncler said the challenge brought in over 2 billion views only four days after launching. Perhaps it won’t be long before top fashion designers start shifting more spending over to the platform.
Trend #2: Digital is Up
Spending in the digital format is on the rise among most brands. Spending has increased 38% to $229mm this year.
Companies who’ve only advertised in digital and who have a stronger social media presence include:
Their digital spend totals $17.05mm.
Our main takeaway here is that though the retail category reduced their overall spending, most of the drop came from print. The digital space, however, is seeing an increase in advertisers and spending. As more consumers flock to TikTok and its competitors, growth is only expected to continue.
To learn more about the data behind this article and what MediaRadar has to offer, visit https://mediaradar.com/.
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