Why P&G Continues to Use TikTok - Speed and Reach
Procter & Gamble (P&G) is pursuing TikTok because it continues to find valuable opportunities on the platform. In April 2020, P&G launched a campaign with Charli D'Amelio on TikTik to encourage the public to observe social distancing called #DistanceDance.
By any measure, the #DistanceDance campaign has been a significant success. The campaign has generated billions of views. Also, the campaign has prompted other people to create #DistanceDance videos on YouTube and other platforms.
Achieving billions of views is a major branding win for P&G. Critics might argue that the #DistanceDance campaign is not going to do anything to grow P&G's business. After all, the campaign focuses on public health measures of distancing to fight the spread of COVID-19. Further, P&G announced that it would donate to Feeding America and Matthew25 after the video achieved its first few million views. P&G has already donated more than $15 million in cash and products to charities in 2020.
From a short-term point of view, the critics have a point. In the long term, P&G and Gray, the advertising agency that led the campaign, have gained valuable experience in TikTok. Based on the #DistanceDance campaign's success and the company's donations, P&G will be positioned to continue advertising on TikTok.
Other TikTok 2020 Advertisers and Growth Numbers
As the pandemic changes consumer behavior, more people are turning to TikTok for connection and new forms of entertainment. According to CNBC, the service has more than 100 million US active users as of August 2020 - more than 25% of the total US population. That's a dramatic jump compared to September 2018 when the service had 14 million users in March 2019.
P&G isn't the only major consumer brand still on TikTok.
Other companies are continuing to find value in TikTok, especially Chipotle Mexican Grill. The fast-food restaurant chain has gone a step beyond P&G's campaign on TikTok.
Chipotle started a family challenge called #ChipotleSponsorUs on TikTok. Winners of the contest are eligible to receive free burritos for 12 months. Ending on September 14, 2020, the campaign generated interest across social media.
In contrast to P&G's campaign, which featured a single influencer, the Chipotle takes a different approach. By emphasizing families or small friend groups, Chipotle is encouraging group activity on the platform.
The restaurant company's contest style campaign shows that marketing campaigns on TikTok can use proven marketing ideas like contests. The company's push to advertise on TikTok may help to reverse the company's flagging results. In Q2 2020, Chipotle grew its digital sales by more than 200%. Despite that growth, comparable restaurant sales declined by nearly 10%. If Chipotle manages to encourage more groups of friends and family to order food due to the TikTok campaign, further digital growth may offset the loss of offline sales.
TikTok Advertising Costs Vary Considerably in Cost
The cost to advertise on TikTok depends on multiple factors. On a superficial level, brands can purchase advertising directly on the platform. Running traditional ads on the platform requires a minimum budget of $50. That said, larger brands are prepared to spend much larger amounts.
Paying for direct TikTok advertising isn't the only option. Some brands are also striking deals directly with individuals with a large following. Some content creators charge brands on a fixed fee basis while others charge based on views. Given the potential for a viral video on TikTok, a fixed fee campaign can translate to very attractive pricing.
How TikTok Is Challenging YouTube's Business
With one billion hours of daily video views, Google's YouTube remains one of the world's most popular video websites. That popularity has led to increased advertising costs for brands. According to Influencer Marketing Hub, "YouTube ads have an average cost-per-view of $0.010 – $0.030… the average cost of reaching 100,000 viewers is around $2,000."
In contrast, TalentX Entertainment, a marketing agency that works with more than thirty influencers, charges brands $0.01 to $0.02 for each sponsored-video view on TikTok. That lower pricing may reflect the fact that TikTok's platform is smaller than YouTube. For brands looking to stretch their budgets further, TikTok is an exciting option.
TikTok Hashtag Challenges Ads: Expect to Pay Six Figures
TikTok's social media challenges have become quite popular. Brands seeking to leverage that opportunity are reportedly spending more than $150,000 for a seven-day challenge. As a result, challenge style campaigns are going to be out of reach for smaller companies.
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.