he early days of TikTok were defined by catchy dance videos and cute puppy content. Nowadays, the social media platform influences global trends and consumer appetites, transforming the structure of modern-day advertising for companies big and small.

TikTok, which was launched by Beijing-based tech giant ByteDance in 2016, is quickly becoming a leading advertising platform, challenging the likes of Instagram, Facebook, and YouTube. In January 2022, creative agency We Are Social reported that the platform achieved an ad reach of 885 million users aged 18 and over, 60 million higher than in October 2021.

Its rapid marketing rise is largely attributed to two things: authenticity and shifting marketing models.

“TikTok is the way,” said Brent Coker, director of brand partnership at influencer agency Wear Cape. “Social media helps customers feel something. It’s almost the opposite of old-school, traditional marketing, which we called ‘push marketing’, where we would push our message on people. TikTok is more like ‘pull marketing’ where we’re providing entertainment value or informational value, and people are drawn to it through engagement.”

The platform is dominated by Generation Z and Millennials, with those aged 18 to 24 making up almost 43 per cent of the platform’s total audience aged 18 and above, according to We Are Social.

This demographic seeks entertaining and relatable content. According to the Global Web Index’s 2022 Millennials: A marketer’s manual report, 32 per cent of Millennials are spending less time on social media, but it doesn’t mean they’re losing interest in influencers. Rather, they’re curating their online time by engaging with accounts that are “more authentic”, with 53 per cent of Millennials saying they want brands to be reliable and 42 per cent saying they want brands to be authentic.

Where users once sought out brands that sponsored professional models to promote their products in a manicured way – generally through formal photo shoots on Instagram – Coker said TikTok’s core demographic are now bent on the honesty policy. They expect content that is “rough around the edges” from comedians, actors, or even everyday people offering a genuine assessment in a way that cuts through the glut of content and encourages engagement though likes, shares, comments or even a visit to the company’s landing page.

“We have more clients asking for TikTok than ever before,” said Coker. “The average engagement rate on Instagram is about 3 per cent. On TikTok, we’re looking at people with 18 to 20 per cent regular engagement.”

Australian Maddy MacRae is an example of a TikToker who has entered into paid partnerships with brands and created videos around their products. After going viral in February 2022 from a video about being a slice of white bread, fans and brands alike flocked to MacRae, who now has a following of 1.4 million people, and is known for her relatable videos about sex, mental health and the female body.

Some of the recent brands that MacRae has worked with are Modibodi, the Melanoma Institute Australia, V Energy Drink and L’Oreal, but it isn’t about working with every company that lands in her inbox, said MacRae. The brand and product needs to align with her values and her following.

“It needs to be something that I would use, and then it needs to be something that my audience would also like, and it also has to align with the style of content I make,” MacRae said.

“If I can’t make it funny and engaging, I’m going to find it hard to advertise that product, and it’s not going to fit on my page.”

Since her partnerships are curated to reflect the funny and authentic videos she makes, MacRae said she doesn’t really get any criticism for advertising products for brands.

“I think 99.9 per cent of my feedback for all partnerships is positive. People enjoy the content.”

University of Melbourne honorary professorial fellow John Sinclair said TikTok’s marketing success was further evidence of the shift from the mass-media age to the social-media age, where “native advertising” – in which the distinction between entertainment and advertising is blurred – dominates.

“Social media like TikTok enable advertisers to target prospective consumers because the platforms collect data on users’ behaviour, and this data lets advertisers reach prospects selectively, even individually,” said Sinclair. “Also, TikTok is ‘sticky’, keeping users engaged for longer to continue to be fed advertising.”

Subway Australia, which has entered into paid partnerships with TikTok stars such as Millie Ford and Christian Hull since launching on the platform earlier this year, said TikTok added a level of authenticity that wasn’t necessarily found in conventional advertising.

“TikTok partnerships, and social media partnerships more generally, have become another word-of-mouth tool that can have a similar level of credibility as if you were to get a recommendation from a relative or friend,” a Subway spokesperson said.

“This is of course only successful when like-minded content creators are engaged that then create content in line with their own personal brand and values creating a more authentic outcome.”

Subway said embracing TikTok wasn’t about trying to stay relevant by jumping on the social media bandwagon, it was more about making “brand messaging more relevant and niche to groups of like-minded audiences – not always possible through traditional advertising platforms such as billboards”.

To measure whether campaigns and partnerships are successful, Subway said they track data such as views, likes, comments and reach, and that sentiment and reaction were important in modifying content to make it better next time.

According to TikTok data, 67 per cent of surveyed users agreed the app inspired them to shop even when they weren’t looking to do so in October 2020, and 74 per cent said it inspired them to find out more about a brand online.

The Global Web Index’s “Connecting the dots: Discover the trends that’ll dominate 2023” global report similarly highlights the influence that TikTok has on young people’s purchasing habits, showing that 41 per cent of Generation Z and Millennials make an impulse purchase online every two to three weeks, a figure that rises to 48 per cent among daily TikTok users.

However, the report also indicates that in 2023 it’s going to become harder for companies and social media platforms to capture the attention of their consumers. Internet and screen time, which skyrocketed during lockdowns, has now returned to pre-pandemic figures, which “is a potential sign that people have reached a kind of internet saturation point”.

And, despite TikTok’s promising trajectory, advertising on the platform could seem like an expensive uphill battle, particularly if a brand is not willing to adapt its core image to suit the app’s upbeat and natural tone.

Cassie Hayward, associate professor in psychology at the University of Melbourne, says one of the best ways for a brand to develop trust and rapport with potential consumers is by sponsoring user-generated content that features the product or service.

“That relies on you letting go of the reins and seeing where the creators take it – that can be hard for a brand that is used to curating and micromanaging every aspect of their image,” Hayward said. “It is also a fast-moving world on TikTok … In traditional advertising, it can be months for an idea to go from conception to production, but on TikTok you have to be lightning fast.”

For some, social media can prove fickle, says Coker. An ad may trigger a surge in traffic one week and none the next. TikTok ads are a long game – if a company is unable to invest in maintaining a relevant campaign that carefully slots itself into the algorithm of the correct demographic, it becomes unlikely it will see a return in profit.

“I think some brands will try and fail on TikTok because they simply copy-paste their ads onto the platform and that will not lead to the desired engagement and results,” said Hayward.

The platform’s speed could also accelerate costs, given ad campaigns need to be renewed to keep up with ever-increasing competition. A TikTok spokesperson said while there was no “one size fits all” approach to costs, basic ads cost as little as $5 a day, while more advanced advertising campaigns would incur a greater price.

Hayward said companies such as cosmetics retailer Mecca can thrive on such a youth-oriented app; however, insurance companies or public health advertisers targeting an older audience or adopting a more serious tone may not fare as well.

“It’s mainly about being where their audience is,” said Hayward. “It’s very easy to come across as trying way too hard to be cool – you’ll get the cringey eye-roll reaction as users scroll past … The platform itself advises brands ‘don’t make ads, make TikToks’, encouraging brands to drop their traditional notions of advertising and embrace the creativity of the platform. But this can be very hard to get right.”

All sponsored content on TikTok – whether created directly by a company or a sponsored content creator – must comply with Australian advertising codes, including the prohibition of false or misleading claims, said a TikTok spokesperson. Any branded content must be obviously signposted as such, either through the caption or video dialogue.

But since most ads on TikTok are user-generated, Hayward said it can become harder to tell when one is being sold something, thus creating a potential ethical dilemma. And since one doesn’t need to be following an account to see its content on their “For You” feed, users have little control over how often they encounter branded content.

“More so than the influencers on Instagram, many of the TikTok creators just come across as nice people, perhaps even a friend, often with an interesting niche – vintage fashion, running, wardrobe organising, vegan recipes, life hacks – establishing this sense of community is smart marketing, but I think that’s when the line between entertainment and advertisement can get blurry,” said Hayward.