The Economy of TikTok: Lessons From the Bidding War
Content is King
We’ve all heard the phrase, it’s used enough: Content is king. Like a song played too many times on the radio (shoutout to WAP). But while the phrase is turned too often, it’s still true. And no more important than right now, a time when we’re consuming more, going out less, and a Silicon Valley giant won the bidding war over one of the most downloaded content apps, TikTok.
OK Boomer
OK boomer, what is TikTok? The fast and short of it is an app dedicated to creative short-form video creation and consumption based on trends and music. Oh, and it’s addicting. Blink and suddenly you’re three hours into the TikTok-verse, treading water in ‘Deep TikTok’ where beans are a thing and users pretend to be department stores.
TikTok’s real, off the cuff content is the result of being inundated with years of Instagram perfection and squirreled away because of COVID, creating a desire for real connection and personal content. So, it’s no wonder TikTok just surpassed 2 billion downloads. That’s billion with a B.
*record scratch* 
Stop the Music
Stop the music. TikTok is owned by Chinese internet company ByteDance. This raises national security concerns: The Trump administration and other officials believe the app could be used to spy on and collect data from the 100 million active users in America. A trojan horse, if you will.
Though TikTok has denied any misuse of data and distanced themselves from China, an executive order was handed down giving TikTok less than 2 months to find a buyer. I won’t get into the larger precedent this sets in terms of open markets but here we are: the most downloaded global non-gaming app is backed into a corner and for sale. Cue a bidding war.
Foreign Tech in an American Container
Now, you might’ve expected some familiar faces like Facebook, notorious for acquiring social media apps like Instagram and WhatsApp or Google, making big moves buying YouTube. But the winner is less obvious: Oracle. A company that has never entered the traditional social media space before. So why TikTok? While there is the benefit of riding the wave of success, the move is more strategic than simply download stats.
Oracle is immersed in data, offering a full stack of enterprise solutions. But while data is queen, Oracle is looking for the royal court - the king and queen. Content and data - rulers of the digital 21st century. The feels-new-but-really-age-old power couple.
“Oracle is immersed in data, offering a full stack of enterprise solutions. But while data is queen, Oracle is looking for the royal court - the king and queen.”
When you think of Oracle, or any of the original bidders, there isn’t a strong emotional connection or relatability for the average Joe. By extending their services as a content platform, Oracle is inserting themselves into daily culture, shaping and curating society. Not only are they aiming to transition from b2b but they aim to become a core addiction within the b2b, b2c, and c2c markets. No longer are they only a service of goods or tech. Buying TikTok buys their place into culture. They become culture.
Then there is the opportunity to mine and monetize that culture. Users and brands create content as an expression of self, lending to a more human-focused data source, where a vast wealth of information is available (ask Facebook!). So yeah, content platforms are important and powerful. The bidding war makes sense.
How Google and Youtube are Monetizing Culture
Google made this same bet in 2006 when they purchased YouTube for $1.65 billion. Flash forward and Youtube’s revenue totaled $15.1 billion in 2019. The economy of content and culture platforms has proven to be successful in the past with no sign of slowing down in the future. (source: CNBC)
“Brands, pay attention. Take a page from the book of the giants.”
Brands, pay attention. Take a page from the book of the giants. Content will continue to grow in both quantity and importance. Culture will continue to be shaped by 15 second clips and 240-character counts. Rather than simply amplify the brand’s latest promotion, create content that is meaningful, engaging, and relevant. Don’t think of it as b2c but human2human.
Use social listening to better understand your audience
Think about how your brand can leverage content platforms in a way that mirrors the strategy of owning TikTok: using content as a source of data. Mining content trends through social listening is just one way of tapping into and leveraging the sea of content available. Use social listening to better understand your audience in real time: their cares, their passions, their worries. Listen. And then react.
SparkNotes of this TED talk: lean into the future of content by creating relevance for your brand in the everyday and tap into content trend data and insights available through these platforms. The giants are betting on a future of social content. So should you.
Share your thoughts: #cultureeconomy