TikTok's latest layoffs prove that even popular entertainment apps are not safe in this seemingly uncertain social climate.
The platform's latest job cuts, the first of 2024, affect around 60 staff, most of them in the app's sales and advertising teams, and are seen as the result of cost-cutting measures. That's not necessarily a bad thing for a platform often thought of as bloated. But it suggests holes in the integrity of the business.
Meta CEO Mark Zuckerberg coined the phrase 2023 as the “year of efficiency,” and TikTok appears to have embraced a similar narrative.
The company reportedly underwent a reorganization in late 2022 and early 2023 to defuse federal criticism from the U.S. Congress over how the company handles user data. Another reorganization followed in May 2023, as the entertainment app invested in e-commerce efforts to enter Western markets.After that, the company made another organizational change. Last summer, former COO V Papas stepped down and hundreds of staff were reassigned to three focus areas: creators, content strategy/policy, and publishers.
But with internal turmoil comes external turmoil.
TikTok's constant changes have some marketers a little confused.there is creative Confusion about how to stay visible on the platform now that it is crowded with ads. As a creator, it can be difficult to know where you stand. It goes without saying that TikTok can compromise the user experience in favor of shops.
Digiday reveals five challenges TikTok will face in 2024.
Improving the efficiency of advertising operations
TikTok's latest “annual shake-up” affected staff in Austin, Los Angeles, New York and internationally. Despite this, parent company ByteDance still has more than 900 job openings available for the app in various departments, including creator operations, search, and data science teams.
Nevertheless, the layoffs signal an effort to address marketers' long-standing concerns about TikTok's ad sales team. Up until now, they had mixed feelings.
Ad executives, however, praised TikTok, citing the fact that they are proactively contacted by app representatives on at least a weekly basis about new opportunities for advertising dollars.
On the other hand, some advertising executives have high turnover rates. But as Colin Kleveno, Tinuity's senior vice president of partnerships, previously told Digiday, customer demand for TikTok is so strong that these losses didn't have a significant impact on spending. After all, salespeople don't necessarily have to overdo it when deals are flowing in.
“It's still relatively new, but [ad] Some of our platform and sales reps have only been with us for a few years, so we may need to make some tweaks when it comes to how we can work better with agencies.” Kleveno said.
App usage is reduced
Once hailed as the app above all apps, TikTok seems to be struggling to gain traction from its peers.
According to data from Sensor Tower, apps' monthly active users (MAUs) grew an average of 12% year-over-year in 2022, but this rate dropped to just 3% in 2023.
This may come as no surprise. When a platform is in its early stages, growth is often rapid. However, as the platform matures, as was the case with Meta, growth will occur, but at a slower pace.
Perhaps this is why the app introduced a user reward system last month to encourage new signups.
From December 20th to January 31st, users aged 18 and over can refer a friend who doesn't use the app to sign up and earn £6 ($7.60) worth of points which can be redeemed for an Amazon gift card ( per friend). What's more, your friend will also earn her £6 worth of points if she checks in on the app every day.
Incentives like this can be a great way to drive people to TikTok. However, with so many users already using the app, it may be difficult to find enough users who haven't already signed up for the scheme to change things.
Additionally, this comes at a time when YouTube Shorts and Meta Reels are gaining more attention, especially since they are less effort-intensive compared to creating TikTok. So while more ad dollars are being spent on short-form video formats, they're not necessarily being spent on TikTok.
Declining algorithms
TikTok’s algorithm is the main reason for its success. Engage your users and choose more content to see as they scroll through your For You page. But as the saying goes, nothing lasts forever. Unfortunately, the same is true for platform algorithms.
Users are becoming increasingly dissatisfied with their feeds because they have to search more to get that dopamine hit from watching funny TikToks. If not, you'll be bombarded with shop ads on the left, right, and center. As one user posted on Masu.[as] Were almost all videos funny before? What happened? “
The issue has also been noted by advertising industry executives, including Amy Gilbert, vice president of social innovation at The Social Element, who previously discussed the issue with Digiday. “As the platform evolves, I think the challenge is how do we evolve the platform?” [TikTok] keep that part [the algorithm] It's not just about making it different, it's also about finding new ways to bring in those other elements. [such as Shop, music, etc.] in. “
TikTok shop
TikTok Shop, perhaps the biggest launch in the U.S. in 2023, has been, and continues to be, bombarded with mixed messages. It's commendable how quickly the company was able to bring the US Shop product to market (after just a few months of testing). He certainly seems to have succeeded in impulse buying, especially for Gen Z. But by and large it is also stained by ducks. Potential buyers hesitate. Needless to say, consumers are not directed to a brand's own site to checkout, so marketers must waive rights to their first-party data.
Generally speaking, users are currently less interested in Shop than they are in TikTok. The main reason for this is the excessive amount of ads that take up too much of users' feeds. This is certainly something marketers emphasized on Digiday last year. Perhaps this is one of the reasons for slow usage. Either way, it looks like TikTok needs to get the balance right in going all-in on social commerce without destroying the user experience.
creator friction
TikTok's relationship with creators remains transactional. A marriage of convenience, so to speak. Every new product for creators is undermined by TikTok's slow response to creators' needs. The much-hyped creativity program? It's still unclear how many creators are participating and how much of the $1 billion Creator Fund has actually been distributed. And those long videos? They are not what the creators want. These are about TikTok's constant quest to keep users glued to the app and subsequently increase revenue.
One TikTok employee, who spoke candidly on condition of anonymity, said most TikTok executives and much of ByteDance's leadership in China view creators as fungible. “Even if we remove the top 5% of creators from TikTok, the platform will still exist and there will be no significant impact on the business,” they said.
Because TikTok is all about creator content, not content creators. This is a subtle change from the likes of Meta and YouTube, which have always focused on the reach and popularity of influencers and creators. In other words, if a brand collaborates with a top influencer on a meta platform, for example, you can pretty much predict that the content will perform well because that person has reach and popularity. But on TikTok, these vanity metrics don't apply. Even if a creator has 4 million followers, her TikTok may stagnate, but a creator with 200 followers can go viral overnight.
That's not to say TikTok doesn't make any efforts with creators, rather the opposite. The platform frequently holds workshops and events and invites selected creators to participate, but it is unclear which creators have an actual relationship with the platform and why.
For example, Stephen Hart (@realstephenhart), who has amassed approximately 486,400 followers and 35.6 million likes, currently has so many users and the platform is growing so much. , said it's difficult to say whether he feels valued by TikTok. “I feel like it's probably hard for TikTok to focus on individual creators because there are so many moving parts and pieces. Honestly, I'm just grateful that this platform exists.”
