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TikTok’s Latest Ad Targeting Provisions Reflect Increasing Revenue Pressure on the App



TikTok Expands Test of Downvotes for Video Replies, Adds New Prompts to Highlight its Safety Tools

This has certainly raised some eyebrows among social media and privacy analysts.

Today, TikTok has started showing users in Europe, the UK and Switzerland new, in-app notifications informing them of changes to its data collection policies.

As you can see in these examples, shared by social media expert Matt Navarra, TikTok is changing the way it uses people’s data within its ad targeting systems.

More specifically, TikTok explains that:

If you are 18 or over and in the EEA, the UK, or Switzerland, TikTok is making a legal change to how it will use your on-TikTok activity to personalize your ads. Under applicable data protection law, companies like TikTok must have a legal basis for processing your information. Historically, TikTok asked you for your “consent” to use your on-TikTok activity and off-TikTok activity to serve you personalized ads. From 13 July 2022 TikTok will rely on its “legitimate interests” as its legal basis to use on-TikTok activity to personalize the ads of users who are 18 or over.”

Note the inverted commas around ‘consent’. Seems like a red flag in itself.

Essentially, TikTok’s saying that if you have not consented to personalized ads in the past, which TikTok has to allow as part of the EU’s data privacy provisions, you’ll soon get a form of personalized ads anyway, based on your in-app activity. TikTok appears to be looking to use a technicality to maximize the performance of its ads, even among users who have opted out of personalized targeting.

Which is not surprising, I guess, but it does point to the increasing pressure within TikTok to start making real money from the app – which could result in more ads being shown to users over time.

While Twitter remains in ownership limbo, and Meta is diverting more and more of its resources into its metaverse push, it seems, on the face of it, like TikTok is currently the only platform on a clear upward trajectory, with usage counts rising, more ad dollars coming in, and new programs designed to capitalize on the rise of eCommerce and the Creator Economy.

TikTok, at least right now, is the clear winner in the social media sphere are present, right?

Well, maybe not as much as you’d think.

In recent months, TikTok owner ByteDance has faced a range of new challenges, including, most notably, a change in the regulations relating to data and algorithm usage in China.

As per The South China Morning Post:

As with many Chinese tech companies, ByteDance’s prospects for profit growth in the domestic market remain clouded by tightened regulations. The central government has become more intrusive in regulating short video content. A new law governing the use of recommendation algorithms went into effect in March.

CCP regulators, increasingly frustrated at their inability to reign in content within these apps, have sought to exert more control, which has extended to all of ByteDance’s key income sources.

That increased regulatory scrutiny has already wiped $100 billion from the value of ByteDance, forcing the company to consider sell-offs, staff cuts and more as it works to right the ship.

That pressure has also extended to TikTok, which, aside from these new data usage changes, has also been looking to enforce more China-centric style policies in terms of what’s expected of employees, and the content that it allows in the app.

ByteDance executive Joshua Ma, who had been working with TikTok’s UK eCommerce team, was recently forced to stand down after trying to impose tough working conditions on staff, in order to hasten its expansion.

As reported by The Financial Times:

“The launch of TikTok’s livestream shopping feature in the UK triggered a staff exodus from the London ecommerce team. Some staff complained of an aggressive company culture, with unrealistic targets and expectations that run counter to British working practices. Staff said they were expected to frequently work more than 12 hours a day, starting early to accommodate calls with China and ending late as livestreams were more successful in the evening, with overtime celebrated in internal communications. Some members of the ecommerce team were removed from client accounts after going on annual leave.”

Ma has also stated that he ‘doesn’t believe’ in maternity leave, which was also reported by The Financial Times, and which, incidentally, led to another issue on the content side, with TikTok then reportedly considering a move to censor keywords such as ‘Financial Times’, ‘Joshua Ma’, ‘maternity’, and ‘toxic’ on the platform in order to weaken the Financial Times report’s impact.

TikTok says that this ban was never implemented, but it highlights a fundamental concern within TikTok’s approach, in that a first instinct of at least some execs was to seek to silence criticism and dissent.

And you’d have to assume that at least some of this extends from the pressure being exerted on the company’s Beijing HQ.

How this new data usage policy relates is unclear, but with TikTok still only contributing around a third of ByteDance’s overall revenue, despite its global reach, you can imagine that ByteDance will be increasingly keen to squeeze more cash out of the app – and sooner, rather than later.

Which remains a challenge. ByteDance has seen big revenue success with the Chinese version of TikTok (called ‘Douyin’) by implementing eCommerce integrations, primarily driven by the take up of live-stream commerce in China.

TikTok commerce

According to ByteDance, over 20 million individual content creators and live-streaming hosts are now generating income from its apps, with total live shopping revenues in the Chinese market set to reach $423 billion this year. That’s more than the entire GDP of Ireland.

But the CCP’s crackdown is also impacting this element, with a bigger push to catch out influencers that haven’t been fulfilling their tax burden, which has already impacted many local streaming stars.

Add to this the fact that more brands are reconsidering their relationships with streamers (due to influencers demanding ever-more attractive deals), and the signs indicate that a reckoning is coming for the booming sector, which will again impact ByteDance.

It’s also not great for its push on the same with TikTok. Despite its popularity, TikTok is still developing a more equitable business process, especially in regards to ensuring its top stars get paid. TikTok’s expected to bring in around $11.6 billion in ad revenue this year, but it still doesn’t have an effective means to redistribute that to creators, which could, eventually, see many of them drift off to YouTube and Instagram instead.

TikTok is working on this, as noted, but a key focus, as it has been in China, is live-stream commerce, which it’s hoping will become a golden goose in western regions as well. But it hasn’t yet, and many Chinese trends haven’t translated to other markets in the past – and it could well be that TikTok creators just want to get paid for making videos, which they can’t do on TikTok, but they can via YouTube’s Partner Program.

Could that see more creators losing interest in the platform, and taking their audiences with them? That’s what eventually killed off Vine, and it remains a genuine possibility for TikTok as well. Which is why TikTok is desperate to get back into India, where it’s still banned, while it’s also looking to implement more ad options and tools to maximize its revenue intake while it can.

Essentially, when viewed on a broader scope, you can see how the increasing pressure on ByteDance is weighing on TikTok as well, and will likely force it to push forward with various revenue tools, including more ads, which poses a big risk for its growth potential.

That’s not to say TikTok’s on the way out just yet. Far from it, but there are signs there, and there are concerns that you may not recognize when looking at its growth numbers in isolation.

Maybe there are ways around it – maybe TikTok could get sold off and operate as a separate entity, or maybe its commerce options will be a hit and facilitate bigger business opportunities for the app.

Either way, you can expect to see more changes in the app as the pressure mounts on its parent business.

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Twitter Tests New Quick Boost Option for Tweets



Twitter Tests New Quick Boost Option for Tweets

Here’s the difficult thing with Twitter no longer having a comms department – now, there’s nowhere to go to confirm info about the app’s latest updates and features, and where each is available, etc.

Case in point – this week, Twitter appears to have launched a new in-stream boost option for tweets, which provides a quick and easy way to promote your tweet without having to launch a full ad campaign.

As you can see in these screenshots, posted by Jonah Manzano (and shared by Matt Navarra), the new boost option would be available direct from a tweet. You’d simply tap through, select a budget, and you would be able to boost your tweet then and there.

Which seems to be new, but also seems familiar.

It’s sort of like Twitter’s Quick Promote option, but an even more streamlined version, with new visuals and a new UI for boosting a tweet direct from the details screen.

Tweet boost

So it does seem like a new addition – but again, with no one at Twitter to ask, it’s hard to confirm detail about the option.

But from what we can tell, this is a new Twitter ad process, which could provide another way to set an objective, a budget, and basic targeting parameters to reach a broader audience in the app.

Which could be good, depending on performance, and there may well be some tweets that you just want to quickly boost and push out to more people, without launching a full campaign.

It could also be a good way for Twitter to bring in a few more ad dollars, and it could be worth experimenting with to see what result you get, based on the simplified launch process.

If it’s available to you. We’d ask Twitter where this is being made available, but we can’t. So maybe you’ll see it in the app, maybe not.

Thus is the enigma of Twitter 2.0.

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Twitter faces lawsuit by advisory firm for $1.9 million in unpaid bills



Twitter faces lawsuit by advisory firm for $1.9 million in unpaid bills

US-based advisory firm Innisfree M&A Incorporated sued Twitter on Friday in New York State Supreme Court, seeking about $1.9 million compensation for what it says are unpaid bills. Reuters File Photo

New York: US-based advisory firm Innisfree M&A Incorporated sued Twitter on Friday in New York State Supreme Court, seeking about $1.9 million compensation for what it says are unpaid bills after it advised the social media company on its acquisition by Elon Musk last year.

“As of December 23, 2022, Twitter remains in default of its obligations to Innisfree under the agreement in an amount of not less than $1,902,788.03,” the lawsuit said.

Twitter and a lawyer for Innisfree did not respond to queries.

Elon Musk in October closed the $44 billion deal announced in April that year and took over microblogging platform Twitter.

In January 2023, Britain’s Crown Estate, an independent commercial business that manages the property portfolio belonging to the monarchy, said that it had begun court proceedings against Twitter over alleged unpaid rent on its London headquarters.

Advertising spending on Twitter Inc dropped by 71% in December, data from an advertising research firm showed, as top advertisers slashed their spending on the social-media platform after Musk’s takeover.

The banks that had provided $13 billion in financing last year for the Tesla chief executive’s acquisition of Twitter abandoned plans to sell the debt to investors because of uncertainty around the social media company’s fortunes and losses, according to media reports.

Recently, Twitter made its first interest payment on a loan that banks provided to help finance Musk’s purchase of the social media company last year.

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Twitter Expands Access to Twitter Blue, Announces New Incentives for Signing Up



Twitter Expands Access to Twitter Blue, Announces New Incentives for Signing Up

Twitter is making its next big push on Twitter Blue subscriptions, as Elon Musk and Co. look to build Twitter Blue into a more significant revenue driver for the app.

First off, Twitter has now expanded Twitter Blue access to Saudi Arabia, France, Germany, Italy, Portugal and Spain, which will enable millions more Twitter users to potentially sign-up for a verification tick.

I mean, most probably won’t, going on what we’ve seen thus far, but it will likely swell Twitter Blue sign-ups by another few thousand, adding more cash to Twitter’s coffers.

Twitter’s also looking to further incentivize Blue sign-up by offering revenue share for ads shown in reply threads.

The idea here is that if users write interesting tweets, they would get compensated for the discussion they generate – but you need to be signed up to Twitter Blue to get it.

Elon hasn’t shared any further info on potential revenue split or process at this stage.

Twitter’s also looking to bring back an improved Spaces/podcast experience, as a Twitter Blue exclusive, while Musk has also hinted at allowing some users to avoid having to pay for basic API access, when it becomes unavailable next week, if they sign-up.

Oh, and Twitter’s gold checkmarks for business? Yeah, they’re likely going to be expensive if you want them.

Can’t imagine many brands are going to fork out $12,000 a year for a profile badge, along with $50 per staff member you want to add.

But maybe, Elon and Co. have some more tricks up their sleeve here, and they’ll eventually offer more incentives for businesses to sign-up.

But right now, that’s pretty steep.

And also, ‘legacy’ checkmarks will apparently be gone within the next few months.

All of these elements combined could juice Twitter Blue take-up, though it’s still hard to see it becoming the major contributor to Twitter’s revenue as Elon envisions.

At present, based on third-party tracking, the new Twitter Blue program looks to have around 300,000 subscribers, bringing in an extra $2.4 million per month, and $7.2 million per quarter.

Which is pretty good – but again, it’s still a long way from where Twitter wants subscription revenue to be.

When initially outlining his Twitter 2.0 reformation plans, Musk said that he wants to make subscription revenue around 50% of Twitter’s overall intake. That would serve two purposes – if the majority of users sign-up, Twitter can then use Twitter Blue as a form of ‘payment verification’, meaning that those accounts that don’t have a blue tick are increasingly likely to be bots. It would also reduce Twitter’s reliance on ads, which would give Musk more freedom to make moderation decisions as he likes, without considering potential ad placement concerns.

But in order to do this, Twitter needs a lot more users to sign up.

Twitter’s revenue in Q2 2022, the last time it publicly reported its numbers, was $1.18 billion, meaning that Twitter Blue would need to be bringing in around $590 million per quarter to meet that 50% goal.

Which is about 81x what Twitter Blue is currently bringing in, while at 300k sign-ups, that’s also only 0.12% of Twitter’s active user base that’s currently paying for a blue tick.

That’s likely why Twitter is making a new push on the program, in a bid to jack those numbers up, and maybe, in combination with businesses that do end up forking over $1k per month, it could become a more significant element in Twitter’s revenue make-up.

But 50% of revenue still seems like a lofty goal.

It’s also still confusing as to why anyone would pay, because as soon as you do, you’re devaluing the whole point of the verification checkmark in the first place.

The initial blue ticks were designed to delineate noteworthy users and organizations, which Twitter didn’t always get right, but for the most part, you knew that a blue tick account was likely someone who had relevant, authoritative things to say.   

Now, it’s just anyone who can afford it, and with Twitter looking to increase the reach of tweets from Blue accounts, that also means that the app is increasingly becoming more ‘pay to play’ for regular users, with the blue ticks becoming increasingly meaningless from a functional perspective.

And the logic behind them becomes more diluted with every person who signs up. Eventually, all the blue checkmark will mean is that this person can afford to pay – and who cares? Why do they need a blue tick, from a user perspective, to show that they have enough money to spend?

It sort of feels like the NFT trend of 2021, but worse, because it’s replacing an existing system that did serve a purpose.

In any event, Twitter’s not backing away from its Blue subscription plan, and its hopes of maximizing revenue intake, in any way it can, to keep the company afloat.

Which, given the extra debt it’s been saddled with in the Elon deal, is even tougher than ever – but maybe, in combination with everything else, subscriptions will form enough of an extra income stream to meaningfully contribute to its plans.

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