Is TikTok the new Real Estate Search Engine?
As the popularity of TikTok continues to grow, so does the amount of money that brands are willing to spend on advertising on the platform. In 2019, TikTok was estimated to have generated $3 billion in ad revenue globally. This figure is expected to rise to $10 billion by 2021. This dramatic increase in ad spend is reflective of the platform’s massive growth in users. In just two years, TikTok has gone from being an unknown entity to one of the most popular social media platforms in the world.
With over 1.5 billion active users, TikTok is now the sixth most-downloaded app of all time. It is also the most-downloaded app in 2020 so far. Given its massive user base and continued growth, it’s no surprise that brands are willing to spend more money on advertising on TikTok. TikTok offers advertisers a unique opportunity to reach a large and engaged audience.
Based on a study by eMarketer and Insider intelligence, Tiktok ad revenue now accounts for 2.4% of digital advertising spend in 2022. As ad spend in 2020 only consisted of 0.5%. This equates to $2 billion dollars in revenue, and 2021 this was $4 billion dollars in revenue. Now studies suggest that ad spending in 2022 will total $11 billion dollars.
TikTok has also been increasingly attractive to brands due to its algorithm, which is designed to show users content that they are likely to find interesting. This helps to ensure that brands’ ads are seen by people who are actually interested in them rather than people who simply scroll through their feeds and are not in the market for what the brand is selling. Due to its growing popularity and attractiveness to advertisers, TikTok is expected to continue to see a surge in ad spending in the coming years. As TikTok becomes more established as a platform, we expect to see more brands turn to TikTok to reach their target audiences.
A case study published by Meta suggests that Ecoworld, one of the largest publicly traded real estate developers in Malaysia, saw a 6.5X return on Facebook ad spend. This shows how Real estate developers, property managers, and brokerage firms use social media platforms like Facebook to target ads to a specific age demographic. 59% of Facebook users are between the ages of 25 and 54, which is the current demographic of home buyers and renters. But with time, as the demographic of Tiktok users become homeowners, ad spend will shift from Facebook to TikTok.
The platform is also constantly innovating and introducing new features that make it more attractive to advertisers. For example, TikTok recently introduced a new “brand safeness” tool that allows brands to target their ads more specifically. Furthermore, as of August 2022, Tiktok Released a new “Nearby” feature which allows content to be tailored towards your current location and geotags. This will make property search easier and more effective on TikTok which we believe will incentivize real estate companies to increase ad spend on TikTok.
As TikTok continues to grow in popularity and ad spend, it is clear that the platform is here to stay. As 60% of TikTok users are between the ages of 16–24. Younger demographic shows how real estate ad spending on TikTok will increase over the next half-decade. For brands, advertising on TikTok is an increasingly attractive option. Google also suggests that there are over 5 million search results for the words “Real Estate”, “TikTok”, and “Growth,” with the majority of the results being dated to early this year. They also suggest that there has been an upward trajectory of “Real Estate TikTok” web searches in the past three years.
Given the data trends and market demographic, we believe that real estate TikTok is inevitable. As real estate companies realize the importance of leveraging social media to generate qualified leads, real estate will be bought, sold, and rented all on Tiktok.
