How Does TikTok Make Money?

Asking yourself how does TikTok make money? Then you should definitely read this revealing article.

TikTok is a social media platform where short videos are created, edited, and shared. On this platform, users can create entertaining videos.

Keep reading as this article reveals a lot about TikTok and exactly how it makes money.

 

What is TikTok?

For the uninformed, Tiktok is an app that allows users to create, watch and share short videos using their smartphones.

The length of the videos could be duration from fifteen seconds to three minutes

The videos shared on this platform are exciting, entertaining, spontaneous, and engaging.

You can post just about any kind of short video on this platform to engage viewers.

Whether you are a pet enthusiast, a sports fanatic, a dance or feet model, a fun traveler, and so on, you should sign up to TikTok.

Users of the platform are guaranteed to access the videos that would make their day.

TikTok comes with a lot of features that endear the platform to lots of users.

TikTok was launched in 2016 and it is owned by a company known as ByteDance.

 

How TikTok Makes Money

TikTok makes money in different ways. These include:

 

1. In-App Purchases

Tiktok makes money from the in-app purchases that users make.

Users can buy virtual coins that start from 100 to 10,000. Their prices range from 99 cents to $99.99.

These coins can be bought to access apps, play games, or subscribe to some services displayed in the app.

People can buy in-app currency as long as they are 18 years.

The more in-app purchases that are made, the more revenue that TikTok gets.

You should know that TikTok’s in-app purchase is similar to what obtains with other social media in-app purchases.

 

2. Tiktok Ads

Another way that TikTok makes money is through ads revenue.

This platform launched the TikTok for Business in 2020.

This is an avenue for businesses to promote their products through paid advertisement.

Both small and large brands can leverage TikTok for business ads to get wider exposure.

There are different ways of making money from TikTok ads.

Nevertheless, here are some business pricing models that TikTok adopts for its ads revenue.

Cost Per Click (CPC) – This an ad pricing model whereby merchants or advertise on TikTok pays a specific amount whenever a user clicks on their advert.

With this type of advert, the user is not expected to purchase or subscribe to the newsletter.

Cost Per View (CPV) – This is a price model that TikTok adopts as well.

In this model, brands will pay TikTok for the number of views made by users on their ads.

Put in another way, TikTok charges the advertiser for 1000 impressions on their advertisements.

Cost Per View(CPV) is also referred to as Cost Per mile.

Cost Per Action – This price model is used by Tiktok also.

In this model, the advertiser pays to TikTok whenever there is an action performed through the ad.

For instance, the advertiser will pay TikTok when the user takes action like downloading an app, installing an app, subscribing to a newsletter, playing a game, filling a survey, or submitting a form, etc.

 

 

Types Of Tiktok Ads

 

In-Feed Video Ads – These are short videos that appear in between users’ feeds.

They are viewed when users scroll through the “For You” page.

They look similar to those that appear in the Instagram Stories.

Brand Takeover Ads – A brand takeover ad appears immediately after a user opens TikTok.

Most brands use this type of ad to deliver an instant message to their target audience.

The ads give the first impression to the target audience.

Top-View Ads – These are ads that appear when an individual is already using TikTok. These ads last for about 60 seconds.

Branded Hashtag Challenges – Brands can pay TikTok to let their tags appear on users’ discovery pages.

In this hashtag challenge, brand awareness is created and boosted when users participate in the challenge for fun.

Branded Effects – Tiktok can provide brands with branded effects that can be used with their ads.

These effects are paid for and could go live for up to 10 days.

This is so that users can interact with the brand.

Typical examples of these effects include custom stickers, lenses, and augmented-reality filters.

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3. Paid Subscription Plans

TikTok can make money through subscription plans for its services.

The platform is aiming to launch a paid music subscription plan.

Once users subscribe to a plan, TikTok makes money.

The music plan is similar to what obtains in Spotify and Apple Musc where users can create and share videos anytime and anywhere.

With paid subscription plans, TikTok can increase its reach to a diverse audience across the globe.

 

4. Fundraising

TikTok also makes money through fundraising.

Donors send money to fund and improve this platform.

As of 2020, it is believed that TikTok is still in the early stages of development.

Many investors are still donating money to improve its services.

Research has shown that more than 3 billion dollars have been received from fundraising.

 

How You Can Make Money With Tiktok

If you are a user or creator with TikTok, there are ways you can make money with it.

The following are tips you will find useful if you are thinking of making more money with TikTok.

• After creating your TikTok account, your main focus should be creating engaging content. This is important because users will easily stick with you if they find your content engaging, entertaining, and exciting.

• Your content should align with what is trending. You need to capture the mood of the people at every specified time. If you understood the mood of the people, then your content would easily be embraced and you will make more money.

• Link your TikTok profile to your social media platforms so you can reach a wider audience. Specifically, link your content with Instagram and YouTube. Some options and features allow you to add your profile to TikTok.

• Always add related hashtags to your post to boost the visibility of your content.

Also See: How Does WhatsApp Messaging App Make Money?

 

Key Features of TikTok

The  Google Play Store highlights the key features of TikTok as:

Watch Endless Amount Of Videos Customized Specifically For You – Tiktok is a platform where users can access personalized video feed based on what they watch, like, and share.

The platform offers users real, interesting, and fun videos that will make your day.

Explore Videos – TikTok allows users to watch all types of videos, from Comedy, Gaming, DIY, Food, Sports, Memes, and Pets, to Oddly Satisfying, ASMR, and everything in between.

Pause Recording Multiple Times In One Video – This app allows users to pause and resume their video with just a tap. Shoot as many times as you need.

So, you can be in control of what you watch and when you want to watch.

Be Entertained And Inspired By A Global Community Of Creators – TikTok has features that allow millions of creators to showcase their incredible skills and everyday life.

Creators are inspired to create and share the most amazing videos.

Add Your Favorite Music Or Sound To Your Videos For Free – With TikTok, users can easily edit their videos with millions of free music clips and sounds.

TikTok curates music and sound playlists for users with the hottest tracks in every genre, including Hip Hop, Edm, Pop, Rock, Rap, and Country, and the most viral original sounds.

Express Yourself With Creative Effects – TikTok allows users to unlock tons of filters, effects, and AR objects so that their videos rock.

Edit Your Videos – TikTok provides integrated editing tools that allow users to easily trim, cut, merge and duplicate video clips without leaving the app.

Also See: How Venmo Money Transfer App Makes Money?

 

Conclusion

The article revealed a lot about TikTok, especially how it makes money and how you can use it to make money for yourself.

This platform makes money through in-app purchases, ads, paid subscription plans, and fundraising.