How TikTok broke social media
Is tiktok’s time up? As the social-media app’s chief executive, Shou Zi Chew, prepares for a grilling before Congress on March 23rd, TikTok’s 100m-plus users in America fret that their government is preparing to ban the Chinese-owned platform on security fears. Their anguish contrasts with utter glee in Silicon Valley, where home-grown social-media firms would love to be rid of their popular rival. With every grumble from Capitol Hill, the share prices of Meta, Snap, Pinterest and others edge higher.
TikTok’s fate hangs in the balance. But what is already clear is that the app has changed social media for good—and in a way that will make life much harder for incumbent social apps. In less than six years TikTok has weaned the world off old-fashioned social-networking and got it addicted to algorithmically selected short-form video. Users love it. The trouble for social apps is that the new model makes less money than the old one, and may always do so.
Auctions for video ads are less competitive than those for static ones, because many advertisers have yet to create ads in video format. Big advertisers prize video ads (and report record engagement on TikTok, where products have gone viral with the hashtag #TikTokmademebuyit). But the long tail of small businesses from which social networks have made their billions find video spots tricky to produce. Just over 40% of Meta’s 10m or so advertisers use Reels ads, the company says. Getting the remaining 60% to create video commercials may be made easier by artificial intelligence. One senior executive imagines a near future in which a small retailer can create a bespoke video ad using only voice commands. Until that moment arrives, half the long tail is lopped off.
