Is TikTok a threat to Facebook and Google's ad dollar dominance in the Malaysia?

With consumer attention span dwindling, Tiktok has been rewriting the social media playbook, captivating audiences with its short form content. Currently the platform boasts 1 billion active users across 154 countries, and is a key staple in a brand’s social media marketing plan.

In Malaysia specifically, the platform has proven to be a rising favourite for advertisers as Malaysia ranks 8th amongst countries with the highest reach of TikTok ads amongst adults, detailed a recent report by We are social and Meltwater. In Malaysia, the average internet user is aged 16 to 64, and spends two hours and 47 minutes on social media each day, higher than the global average of two hours and 31 minutes.

While TikTok is certainly gaining traction with Malaysian marketers, Meta and Google have traditionally held the lion’s share of digital dollars in the market. With this in mind, we ask industry professionals if the trend is finally changing.  

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Elina Peek-Lantz, managing director, Reprise Malaysia shared that there is a continuous rise in media spend on TikTok. When the platform first emerged, there was a level of uncertainty over the type of audience it would attract, explained Peek-Lantz. Coupled with the prevalent misconception that TikTok is only for young, some advertisers were deterred from spending on the platform.

“However, TikTok has demonstrated its ability to attract users of all ages and backgrounds, and as a result, has secured a strong foothold in the marketing strategies of many, if not, most brands (B2C in particular),” she explained.

Echoing similar sentiments, Kenneth Wong, CEO of Trapper Interactive said that in 2021, TikTok's digital advertising presence had a modest start, yet the agency is now forecasting the 2024 budget projected to triple its revenue share from 0.7% at the outset up to 2.7%.

“TikTok's rapid growth in advertising revenue continues to outpace expectations. Similar to the global trajectory, TikTok is forecasted to generate twice as much by 2024 from their four billion USD in 2021,” he said.  

Joseph Chua, CEO of Aiken Digital added that the localisation of content on a short form video platform, has been the secret sauce behind the success of the social platform in Malaysia. “Is far more engaging than text and a newsfeed. Hence, it is little wonder, that the data supports at least a 90 minutes usage of the platform,” he said.

How does it fare compared to Meta and Google?

Most recently, the platform captivated headlines after a study by Financial Times and Vayner Media found that TikTok was offering ad rates of a cheaper price tag compared to its social media rivals. The article detailed that this reduction in price has seen a significant amount of brand ad spend shift to the platform. Meanwhile, ad firm VaynerMedia said that in 2022 the cost to gain 1,000 impressions on TikTok was half the amount of Instagram Reels and a third cheaper than Twitter.

While budgets in Malaysia is still considerably small, faring against Meta and Google, the growth potential in ad dollars is certainly evident, said Wong.

Moreover, with TikTok’s continual improvement in the tracking and conversion tools, the platform is suitable to be used across the entire customer journey funnel. “As such, TikTok's growth has continued to outpace that of other major social media channels such as Meta, which has seen a decline in its user base,” said Peek-Lantz.

While TikTok has become an essential channel in the marketing mix, the issue of brand safety has also often affected the image of the brand in the past, explained Peek-Lantz. However, according to Magna’s Media Responsibility Index (MRI) that assesses 150+ partners from a variety of formats across 15 countries, it was seen that TikTok has significantly improved its brand safety standing, gaining an 8-point lift on brand safety practices and 24-point lift in children’s wellbeing.

“That being said, it is essential that TikTok is vigilant in its monitoring of content to demonstrate accountability and trust with consumers,” she added.

Interestingly, TikTok has also garnered the attention of internet users who are also turning to the platform to make searches instead of traditional platforms such as Google. The finding, echoed by Southeast Asian consumer research company, Milieu Insight, examined the popularity of TikTok as a search engine when it comes to the discovery of products, services and places to visit.

According to the study, TikTok is not just a platform where people consume funny and entertaining videos. A considerable proportion of respondents especially in Vietnam, Thailand and Indonesia are increasingly relying on TikTok as a source of information to search for a topic or discover products, services and places to visit. In Vietnam, TikTok outcompetes Instagram in this regard. 

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