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TikTok’s huge small-biz profit power: 4 in 5 say TikTok ads show ROI—within 6 months, for most

by | Jan 12, 2023 | Public Relations

As TikTok continues its ascent to the social media throne, brands and businesses need to take note of the platform’s huge potential as a bottom-line booster. Small businesses particularly have reported strong return on investment: new research from software reviews and selection platform Capterra reveals that 78 percent of small businesses that run ads on TikTok have already realized a positive ROI—and the majority say those returns are happening within just six months.

TikTok marketing yields undeniable power, especially with Gen Z, and more and more consumers are turning to TikTok search over Google to find their next local boutique or restaurant, according to the firm’s newly released TikTok Marketing Survey. With Google and Meta’s advertising dominance fading, TikTok is becoming more advantageous for small and midsize businesses. In fact, one in ten surveyed businesses have gone viral on TikTok organically, indicating a level playing field that’s not dominated by large name brands.

TikTok’s huge small-biz profit power: 4 in 5 say TikTok ads show ROI—within 6 months, for most

One advantage TikTok offers is that it helps mitigate choice paralysis by giving users immersive, vertical videos that take them inside a business instantly, rather than sifting through text-heavy review sites like Google or Yelp. Given its success rate, 52 percent of TikTok marketers surveyed plan to spend more money on the platform in 2023. And only 18 percent of businesses not currently using it say they have concerns over its data practices.

“In response to Gen Z’s preference for TikTok as a search engine over Google Maps, Google plans to launch augmented search functions to rival TikTok reviews’ immersive, authentic qualities,” said Molly Burke, senior retail analyst at Capterra, in a news release. “Users like TikTok because its seemingly endless content feels authentic and unfussy—videos made by real people, for real people. Creating ads that capture the candid nature of organic TikTok content helps businesses blend in and profit.”

TikTok’s huge small-biz profit power: 4 in 5 say TikTok ads show ROI—within 6 months, for most

More than three-quarters of businesses that use TikTok post organic content, while less than two-thirds run ads on the platform (some only use TikTok to discover trends or keep an eye on their competitors). Among businesses that post both organic and sponsored content, 72 percent say organic TikTok content is extremely valuable to their company’s overall marketing performance, while 55 percent say the same for ads.

“While other platforms’ content suggestion algorithms can feel like an oligarchy dominated by legacy brands and Hollywood celebrities, TikTok’s ‘For You’ page has been characterized as a meritocracy where small businesses can reap rewards from both paid and organic content,” said Burke.

TikTok’s huge small-biz profit power: 4 in 5 say TikTok ads show ROI—within 6 months, for most

The research overwhelmingly recommends TikTok for small businesses when used correctly. Read the full report here.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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