Tiktok has millions of users monthly across the world. If you do not know how to how does TikTok makes money and are curious to know how an app makes money that provides free access to everyone, then keep reading.  This interactive social media app allows users to share videos with their followers across the world and be popular. Businesses are investing money to make quality content on TikTok just to draw in more viewers into the sales funnel, while individuals are influencing other by posting all sort of videos ranging from hacks, cooking videos, comical videos to even acting and showcasing skills. So how does TikTok make money? Keep reading to find out.

How does TikTok make money

TikTok Advertisements

TikTok business was launched in the year 2020 which provides a huge avenue to TikTok revenue.  Like every other social media platform such as Youtube. Tiktok too provides the feature of paid advertisements for businesses to promote their brands and businesses. Brands are using Tiktok’s feature to promote their products and services for money.  The TikTok advertisement features include several factors such as brand takeovers, in-feed videos, brand hashtag challenges, and even branded effects. We have discussed all these features in detail below.

In-feed videos

are short-timed videos that appear on a TikTok user’s feed when they scroll theirs for your page. There are quite similar to the feature that is provided by Instagram called Instagram stories.

Brand takeover ads appear on a user’s profile the moment they open the app. These advertisements are provided by Tiktok for different brands that have paid for brand takeover ads. These ads have the potential to generate more leads as people get to know about the products and services offered by that brand through brand takeover ads.

Top-view ads,

on the other hand, appear only after a user has spent some time on the app, and usually, a top-view ad lasts for about 60 seconds on top.

When people wonder how does TikTok makes money, they usually do not take the term brand hashtag challenges into consideration. Here brands get their own hashtags after they TikTok for the same and so that the hashtag shows up on the platform of TikTok through the user’s discovery page.

Branded effects are that clubbed feature where brands pay TikTok to have their custom-made stickers and other features to introduce the uniqueness of their brand on the platform of TikTok.

How does TikTok make money

In-app purchases

Very similar to other social media apps, TikTok too has in-app purchases. Tiktok allows users to purchase virtual coins that range from 100 to 10,000 number for 99 cents to $99.99 as the price plan.  Users on TikTok above the age of 18 are allowed to purchase these virtual apps on the platform of Tiktok. These virtual coins are used to appreciate other TikTokers for posting content by buying virtual gifts on the platform.

Even after all this, one can still wonder how does Tiktok makes money. Tiktok has yet not officially released any statement as to how its strategy to monetize.  But it has been studied that TikTok makes revenue through in-app purchases and paid advertisements among others.

Since businesses are now investing in social media platforms, TikTok is gaining a lot of its revenue from these investments. Businesses are getting what they need, more reach, and a potential target audience globally. While TikTok is earning money from providing reach to these businesses through paid advertisements and featured videos.

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