How Might TikTok Embrace Location-Based Marketing?

• TikTok is a preferred app of Gen Z and Millennials, driving discovery and, increasingly, purchase behavior.
• TikTok offers easy set-up, advertising and commerce tools for marketers, including DMA-based geotargeting.
• TikTok has great opportunities for location marketers, but figure out what works first – or risk potential shame.

It’s crazy to think about, but just two years ago, the U.S. government was on the verge of trying to ban TikTok – something that would have stunted the app’s global growth considerably. That was then. This is now: TikTok is the most popular site in the world and the app shows no sign of slowing down, with 121 million users in the United States, the most of any country. Many businesses have capitalized on that growth by using TikTok to build awareness, relationships, and sales. So how might TikTok help businesses in the future, especially locally?

Yep: TikTok Is Big

TikTok is attractive to businesses for many reasons. Its size alone is one of them, growing to more than a billion active users since its launch on iOS and Android outside China in 2017. TikTok is also a preferred app of the coveted Gen Z and Millennial populations, which together account for half the U.S. population. TikTok gives businesses an entrée to a population that is actively looking for things to buy on the app.

The hashtag #TikTokMadeMeBuyIt had 8.1 billion views as of this writing, with TikTokers celebrating and sharing all the purchases they’ve made thanks to the products they’ve discovered following other TikTokers. In fact, retailers have been known to follow TikTok closely to uncover purchasing trends that influence the products they stock on their own shelves.

The Response to TikTok’s Popularity

Fortunately for businesses, TikTok is helping them gain a foothold in a number of important ways:

• Easy set-up. TikTok encourages businesses to create accounts through an easy set-up process. From there, businesses – including retailers, restaurants, and many other location-based enterprises – can do the same things that individual users can do including, most importantly, creation of engaging video content that evokes curiosity, engages people, and humanizes the brand. TikTok helps businesses by making available tools such as text overlays, stickers, and fly-ins that businesses can use just as people do. Indeed, some of the most popular things posted by businesses are often strange, quirky, and memeish like this TikTok from Target.

@target

✨ humbled ✨

♬ original sound - target

• Advertising tools. TikTok offers advertising features that make it possible for a business to create content that emulates the look and feel of organic posts (which is key for success on TikTok – blatant ads do not perform well). Those features range from in-feed ads to branded hashtag challenge ads. In 2021, TikTok introduced Designated Market Area (DMA) geotargeting. DMA geotargeting uses standardized geographic areas so that businesses can content with their customers in geotargeted areas.
• Commerce tools. TikTok has begun collaborating with brands to embrace social commerce. Most notably, in 2021, TikTok partnered with Shopify to make it possible for TikTok users to shop directly in the TikTok app. Shopify merchants participating in a pilot program can add a shopping tab to their profiles, then build a "mini-storefront" including prices, photos, and an “add to favorites” button.

Many businesses have jumped on the TikTok bandwagon to create engagement nationally and locally. For example:

• One of my favorites, Logan’s Candies of Ontario, California, has accumulated 5.7 million followers by posting addictive videos that give you an inside look at life at this small candy store – including demonstrations of how a giant candy cane is made or fun clips of employees dancing to old-school Run-DMC. They also do a fantastic job of posting seasonal content such as the Halloween themed clip below. The beauty of these videos: they seem like ordinary content anyone could make. They’re authentic. They humanize a local business.

@loganscandies orange creamsicle in a snap 🎃🖤🔥 #Halloweentreats ♬ Adams Family Theme Song - Halloween DJ's

• Chipotle joined TikTok with a business account in 2018 after noticing TikTokers liked to talk about the national chain of restaurants. The company started to build a fan base with organic content, such as comedy sketches, menu hacks, and reposts of user content. Then TikTok amplified is presence with TikTok’s branded hashtag challenge ads. One challenge, #LidFlipChallenge, was inspired by a Chipotle employee who had a passion for assembling burrito bowls. As of this writing, Chipotle has accumulated 1.7 million followers and 34.9 million likes.

@chipotle Voice over take 10 🤦 @abigailand_ #chipotle #recipe #fyp ♬ original sound - Chipotle

• Walmart is an early adopter of TikTok’s social commerce tools. In 2020, Walmart launched its first livestreamed shopping event with TikTok, which featured influencers talking up Walmart’s products for the holiday shopping season. Although Walmart did not release sales results, the company conducted a follow-up shoppable livestream and has since embraced shoppable livestreaming on Twitter. Walmart said its first event on TikTok delivered 7x more views than had been anticipated and helped Walmart grow its TikTok follower base by 25 percent. Walmart is also a great example of how customers can provide a massive boost in visibility via social media channels. Recently they have been redesigning stores to make them more interactive and modern. The TikTok below was taken by a customer visiting one of those stores and has over 20 million views

@sydneyratcliff_8 #walmart #fyp #boujee #materialgirl #nwa ♬ Love Grows (Where My Rosemary Goes) - Edison Lighthouse

The speed with which TikTok has launched new features suggests that 2022 will be a busy year for the world’s most popular site. Location-based marketing represents a huge opportunity, and the creation of DMA-based geotargeting suggests that TikTok is aware of this. TikTok could collaborate with brands in many ways here. Just a few of examples:

• Combining geotargeting with branded hashtag challenge ads to build engagement at the store level with local communities. These challenges could contain offers to draw foot traffic to stores.
  
• Continue to expand their #TikTokresumes program that allows businesses to find employees in this competitive job market.

@makena.yee Here are the reasons why YOU should hire me! Don’t be shy, let’s get in touch. #tiktokresumes #tiktokpartner ♬ original sound - MAKENA

• Geotargeted in-feed, brand takeover, or TopView ads, all of which are more traditional (for TikTok) short-form video clips typically designed to raise awareness for a brand. Combined with a call to action, these ads could also promote offers and sales.
  
• Shoppable livestream events as Walmart is doing. These would require more time and effort to pull off. Launching one of these events locally would make more sense for a large retailer with a critical mass of potential customers in large urban areas. Picture, say, a Target launching a new location in a densely populated neighborhood.
  
• Collaborations with local influencers. Beyond the national A-listers exists a universe of micro-influencers – people who may lack national awareness but are well known regionally (here are some in Chicago). They can help a business gain cachet with local audiences who share their particular lifestyle interests. TikTok recently created a relationship with software firm CreatorIQ to help brands find the right influencers on TikTok. It’s easy to see how TikTok could provide such a service at the local level.

Do Your Homework First

If your brand is not currently on TikTok, you should actually stay off TikTok until you have done some homework. Don’t "dive right in" without knowing what works and what does not. Brands that create cheesy ads will get called out to live an eternity in shame. But once you get a sense for how successful brands operate on TikTok – namely by creating authentic-looking content that engages – then add TikTok to your location-based marketing arsenal.

Adam Dorfman is the Director of Product Growth at Reputation. Follow him on Twitter at @phixed