You have to speculate to accumulate…
If you’ve not heard of an app named ‘TikTok’ you’ve been shielding from more than the coronavirus. Video after video, uploaded by the general public, have certainly kept the population occupied during lockdown.
From dance challenges, pranks, DIY tutorials, examples of charity store upcycling, make-up lessons, ‘reaction’ videos, showing off your shopping hauls…there’s something on this platform for everyone, so my teenager tells me—though, after watching some of the clips on her ‘For You’ page, it looks to me to definitely be one for younger generations to get excited about. (Upon checking the stats, it appears I’m right…the largest portion of its total audience is made up of users aged between 16 and 24.)
TikTok was created in China in 2016, but it took two or three years before it cemented itself into the daily routines of its audience. Now, it’s a runaway success and it sees 1.65bn downloads from its platform every single day.
There’s no doubt that TikTok is popular, and something that’s ingrained in the daily goings-on of many youngsters. At the end of 2019, it posted a loss of more than $119mn. However, at the same time, the app was claimed to be worth $140bn—its income, unsurprisingly, being advertising revenue.
Even huge, global brands such as TikTok prove the adage that it takes a few years before a new company sees profit. That the costs of setting up a business don’t pay off immediately, and that, to shorten the time it takes before profit is realised, you have to speculate to accumulate.
When launching a new business, you will be limiting your chances of success if you do everything on a shoestring. By all means, cut corners where they can be cut, but if you wish to capture your clients’ attention and appear worthy of a punt on an unknown, new company, you need to provide reassurance.
This will not be given if your website, marketing materials, general appearance, etc. look amateurish and/or cheap. If TikTok had not invested in a fully-functioning, attractive, easily accessible platform, do you think we would be discussing the same financials as above? How do you think they made the loss they did? They invested $109mn into the marketing of their site, which includes the cost of sales. It wouldn’t have become known worldwide if Bob-down-the-road created it in his shed and just told his mates about it. TikTok has had a slick, effective, continuous marketing strategy behind it from its incarnation to make it the in-demand app of today.
There’s a caveat with social media apps/platforms…they risk a limited shelf life. Take Twitter—at one time, it was in the top three most popular social networking sites, and whilst it still has its fans, its ad revenue has dropped by 23% year on year. It follows that, if fewer people use it, fewer companies will pay to advertise on it; by this statistic, therefore, it’s clear that Twitter has a much smaller audience than it enjoyed in its heyday. Then again, the money it brought its founders when it was top dog…well, let’s just say that I don’t think they’re exactly crying into their coffee.
Whether you invest in PPC advertising, radio adverts, SEO or a mix of all three and more, there’s no point doing any of these things if you’re not prepared to do them correctly. For instance, when we’re asked how much our social media support costs, some clients baulk at the answer. That’s not because we’re particularly expensive on the manpower front, it’s because we recommend a minimum investment for paid ads and the like—because, if we’re going to deliver results, we need a decent budget to do this with. There’s not much you can produce out of thin air.
There are ways and means of achieving some marketing results yourself, with minimal or no investment. However, these take a huge amount of time and knowledge, and whilst it can be done, you could achieve results (i.e. greater sales) if you threw some money in the right direction. You won’t be losing that money, because you’ll see results more quickly. If you haven’t got funds to speculate with, that’s a different matter, but if you have…use them. Invest and reap the rewards. Why wouldn’t you?
TikTok will eventually reduce its setup and initial layout costs at the same time as its revenue soars, which will result in a profit that will fill the current hole in its financials—and more. It’s done all the hard work by capturing an audience; it now has a fantastic asset (800 million active monthly users) that can be turned into cold, hard cash.
The moral of this story is: when launching your business, a long road will stretch out before you. This represents the length of time from your starting point to enjoying consistent profit. Now, shortcuts can be applied, but they’ll cost you; however, to balance this, you will reap rewards much, much earlier in the journey.
When it comes to creating an impression in business, these elements are ones you absolutely shouldn’t skimp on: an effective and attractive website, a well-designed business card, eye-catching brochures, professional images…these represent your shortcut to profit.
Call 07983 575934 for more information on how we can help you realise profit, fast.