Digiday+ Research deep dive: Agency spending on TikTok sees a sharp decline

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We’ve established that brands and retailers are taking more of a wait-and-see approach to TikTok as the short-form video app faces a potential ban in the U.S. (among other issues). Agencies, on the other hand, aren’t convinced.

Agency marketers have historically been more skeptical toward TikTok than their brand marketer counterparts, and a first-quarter survey conducted among agency professionals by Digiday+ Research found that agency spending on TikTok has fallen sharply in the last few months.

Digiday’s survey found that just more than half of agencies are active on TikTok. Fifty-five percent of agency pros said their clients currently use the social platform, putting it in fourth place among social channels for agencies, behind Instagram, Facebook and YouTube.

For context, let’s remember that 94% of agency pros said their clients use Instagram and 79% said they use Facebook. And for further context, 73% of brand pros told Digiday their companies currently use TikTok.

For those agencies whose clients do use TikTok as part of their marketing strategy, Digiday’s survey found that engagement is how the highest percentage of respondents measure their success on the platform. Thirty-nine percent of agency pros said engagement is the main measurement of success their clients currently use on TikTok, which makes sense considering the nature of the platform.

Commerce and sales didn’t come far behind. More than a quarter of agency pros (26%) said their clients use commerce or sales as their main measurement of success on TikTok. As with their brand marketer counterparts, agencies’ focus on commerce and sales on the platform could be an indicator that some of their clients are making TikTok Shop a more serious part of their marketing strategies.

Digiday’s survey found that the real evidence of agencies’ hesitation to embrace TikTok as a solid marketing channel for their clients lies in their spending there (or lack thereof). Agency spending had been holding steady since the second half of 2022, with about three-quarters of agency pros saying their clients spent at least a very small portion of their marketing budget on TikTok. But the beginning of this year looks very different.

As of Q1 2024, the percentage of agencies whose clients spend even a little of their marketing budget on TikTok is much closer to half. Fifty-nine percent of agency pros now say their clients put at least a very small portion of their marketing budget toward TikTok. That’s a big drop.

Interestingly though, agency clients who spend only a small amount of their marketing budget on TikTok account for most of that drop. A year ago, more than half of agency pros (52%) said their clients spent a very small or small portion of their marketing budget on TikTok. That percentage fell to 39% in Q3 2023, and fell again to just over a quarter (26%) in Q1 2024.

It’s worth noting here that agency clients who spend a large or very large portion of their marketing budget on TikTok account for the smallest group, with 13% of agency pros saying their clients spend a large amount on TikTok. And just 2% said their clients spend a very large portion of their marketing budget on the platform, showing further that agencies aren’t too invested in marketing on TikTok.

Agencies’ lack of investment in TikTok makes sense when we look at how they feel about the platform’s ability to drive conversions and branding for their clients. The long and short of it is that Digiday’s survey found that agency pros pretty much don’t think TikTok helps with either of these things in the grand scheme of marketing.

Just 7% of agency pros told Digiday that TikTok is the best social channel for driving conversions, putting the platform in third place in this category after first-place Instagram (which 43% of agency pros chose as the best for conversions) and second-place Facebook (chosen by 30%). Believe it or not, TikTok did beat out YouTube here.

Even fewer agency pros said TikTok is the best social channel for branding. Three percent of agencies said this, putting TikTok in fourth place in this category (Instagram was the winner by far here compared with other social platforms, with 56% of agencies saying it’s the best social channel for branding).


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