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How Does TikTok Bring In More Ad Money Than Twitter And Snapchat Combined?

TikTok leaves Twitter and Snapchat in the dust but lags behind Meta.

It's younger, cooler and, now, more lucrative for advertisers than the social media sites of an earlier generation.

According to a recent report from Insider Intelligence first dug up by Reuters, TikTok is set to bring in more ad revenue than competitors Twitter  (TWTR) - Get Free Report and Snapchat  (SNAP) - Get Free Report combined.

For Advertisers, TikTok Is The Place To Be

Owned by the Chinese tech giant ByteDance, the platform that has users posting videos that are often less than a minute long is set to bring in more than $11 billion in revenue by the end of 2022. 

Of $6 billion, or more than half, of that number will come from users in the United States.

Twitter and Snapchat, meanwhile, are at a respective $5.58 and $4.86 billion. 

TikTok alone is poised to surpass that number by nearly $1 billion but still lags behind behemoths like Google  (GOOGL) - Get Free Report and Meta undefined

While TikTok only makes up 0.7% of the global digital ad market, the two giants are at respective 29% and 21.4%.

TikTok ad revenue had already grown by 175% in 2021 to $3.88 billion. By 2024, Insider Intelligence predicts that number to reach a whopping $23.58 billion.

"TikTok's user base has exploded in the past couple of years, and the amount of time users spend on the app is extraordinary," Debra Aho Williamson, an analyst at Insider Intelligence, says in the report.

The rise of TikTok among Generation Z is well-documented.

In September 2019, the app reached 1 billion active monthly users despite American attempts to regulate it over its connection to the Chinese authoritarian government and countries like India blocking it outright.

In the U.S., 60% of TikTok users were between the ages of 16-24 by March 2022 while those aged four to fifteen already spend an average of 90 minutes per day on the platform. 

TikTok has also been launching features that are not available on other social media platforms. 

In the summer of 2020, Meta-owned Instagram launched its 15-second-long (later expanded to be longer) Reels to mirror TikTok's short video style.

"People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly," Meta head Mark Zuckerberg told investors in a March earnings call

"And this is why our focus on Reels is so important over the long-term," Zuckerberg said.

There Are A Lot Of Whispers About What The Platform Is Going To Do Next

Amid TikTok's meteoric rise, many were whispering about the possibility of a deal that would outsource storage of user data to Redwood Shores, Calif.-based cloud software company Oracle  (ORCL) - Get Free Report.

The news that such a deal could finally be imminent was first reported by Reuters last month. 

While TikTok has previously been reticent around this type of deal, increasing American pushes for regulation (including an executive order signed by former President Donald Trump) would allow the Chinese company to retain its enormous American audience without running afoul of regulators.

Microsoft  (MSFT) - Get Free Report, Google and Twitter were some of the other contenders believed to be interested in an offer.

Both TikTok and Oracle had repeatedly declined to comment on any potential deal.

ATikTok spokesperson told Reuters that the company continues "to invest in data security as part of our overall work to keep our users and their information safe."