Legislation and litigation to compel digital platforms to remunerate news organisations for their content is in play in countries and states (California in the United States) around the world.

But it’s not all about legislation and litigation. INMA members are also turning their attention to ad-revenue sharing relationships with Big Tech.

TikTok’s new media advertising opportunity

TikTok describes itself as “where advertising becomes entertainment, audiences pay attention, and brands drive real impact.” The social media platform cited research to back its claim: a 2021 study found that 73% of people feel a deeper connection to brands they interact with on TikTok. It also said that 93% of its users take action on content they see in the For You feed. 

This summer, TikTok announced a new contextual ad programme for publishers, Pulse Premiere. As The Wall Street Journal described it, the new product “will make it possible for publishers to sell ads alongside their posts.”

This is a shift since the app “historically has focused on independent creators.” When an ad is aligned with their content, TikTok will pay publishers 50% of the revenue, according to VideoWeek, which added that TikTok is hopeful that it will be simultaneously incentivising premium publishers to create more TikTok-specific content. 

Although TikTok had not responded to a request for comments by publication time, it said elsewhere: “With Pulse Premiere, brand ads are placed directly after videos from our publisher partners in the lifestyle and education, sports, and entertainment categories. Pulse Premiere will offer advertisers adjacency to content surrounding big tentpole moments.” 

And according to TechCrunch, advertisers are “guaranteed their ads will run immediately after what TikTok refers to as ‘suitable TikToks’ from premium publishers.” WSJ also reported that Ray Cao, TikTok’s global head of monetisation product strategy, said the new programme “is aimed at providing more transparency” around where advertisers are “putting their media dollars.”

TechCrunch noted “the move could address potential concerns over ad placement amid user-generated content that, in years past, has caused disruptions to YouTube’s ad revenue” due to obscene or offensive material in ads. 

TikTok’s young audience is an advertising magnet. The WSJ cited research from Sensor Tower that:

• The app has been downloaded more than 4 billion times globally and was the most downloaded in 2022.
• It’s got more than 150 million U.S. users.
• It is likely to have 2.5% of the U.S. digital ad market this year.
• Last year the company took in nearly US$10 billion in ad revenue, and some forecasts indicate that figure will double by 2024, the article continued.
• An article from Insider Intelligence said revenue is expected surge 36% to US$6.83 billion in the same period.

But TikTok stands to gain big as well.

The move, said the WSJ, also “creates another revenue opportunity for the platform,” and helps to build its relationship with advertisers and publishers. “’It’s about, like, how can we really diversify our portfolio,” Cao told the WSJ. 

The new programme will also help TikTok remain competitive with its rivals — Meta Platforms and YouTube in particular, Marketing Dive wrote. And the announcement comes at a time when the platform is facing bans in the United States because of concerns about national security around data privacy and its ties to the Chinese government, according to the WSJ.

In response, DanceByte, TikTok’s owner, has pushed back against those allegations and proposed a US$1.5 billion plan to “silo” its U.S. operations from China. It also hopes the move will reassure advertisers by “playing down” the possibility that there will be an “outright ban,” the WSJ continued.

“Cultural driver” Condé Nast among inaugural elite

Condé Nast is one of the cultural drivers TikTok is seeking out. It’s among the inaugural, by-invitation-only partners of the revenue-sharing model. That exclusive group also included:

• BuzzFeed
• Dotdash Meredith
• Hearst Magazines
• MLS
• NBCUniversal
• UFC
• Vox Media
• WWE 

“Our advertisers know that culture is the new KPI,” Condé Nast Global Revenue Chief Pam Drucker Mann said in the TikTok press release. “The Pulse Premiere solution finally enables clients to match media buying with how consumers are consuming our brands, like Vogue, GQ, and Vanity Fair, on TikTok.” 

Deborah Brett, global chief business officer/digital of Condé Nast, shared insights with INMA about the Condé Nast social media strategy:

“Social platforms like TikTok play a critical role for us in reaching and engaging our audiences across genres and demographics … . Condé Nast aims to connect with our fans on every global platform, ensuring that we are creating content that drives culture everywhere that audiences choose to spend their time. TikTok has been a recent place of meteoric growth for our brands around the world.” 

Brett, who is responsible for globalising Condé Nast’s digital advertising business across 32 markets and who played a pivotal role in successfully shifting the legacy print media company’s advertising revenue to a digital-first model, continued: “Publisher-friendly revenue models and capabilities like TikTok Pulse Premiere and X (Twitter) Amplify are great examples of the platforms developing native product solutions to help advertisers and publishers work together towards exciting new revenue streams. Content is the best advertising, and we see this as an exciting growth area.

Brett, who also manages social and platform partnerships as well as Condé Nast’s monetisation models, explained the two principles that guide the company’s strategy, 

1. Listen to the consumer.
2. Test and learn.

“Not everything has a clear revenue model,” she said. “But if the audience is there and you can bring value, you should create a tailored strategy to show up authentically. If we hadn’t grown our TikTok audiences and views in the service of our consumers, we would not have been poised to capitalise on the Pulse Premiere alpha programme,” Brett said.

“People expect Condé Nast's brands to provide them with culture-defining content no matter where they are choosing to spend their time. Our editorial teams are deeply committed, as always, to providing content that matters, everywhere that matters to our fans. 

“What we have learned above all else is to lead with authentic brand voices everywhere you show up. There’s a lot of noise out there, and what works for Condé Nast without fail is providing curation and content that audiences can rely on. Consumer trust has gotten so complicated in the past few years, and content creators like us play a critical role in providing people with the antidote to inauthenticity.”

Pulse Premiere: building on success

Pulse Premiere builds on Pulse, TikTok’s first foray into contextual advertising that is simultaneously getting an upgrade that extends advertiser reach in the top content categories and will give greater consideration to seasonal content with its Pulse Seasonal Lineups (look for that in the last two months of this year, about the time the U.S. holiday season ramps up).

There are similarities: Like Pulse Premiere, Pulse pays creators 50% revenue share. 

But here’s where the two programmes differ, according to Marketing Dive:

• Pulse Premiere aligns ads with “a roster of premium publishers who are eager to reach the video-sharing’s younger-skewing audience and tap into fresh sources of revenue.”
• Pulse on the other hand, uses its Max Pulse buying option to let advertisers place their ads in the top 4% of vetted creator content — determined by metrics such as likes, watch time, and comments, the WSJ said — in categories like beauty or automotive. 

VideoWeek noted TikTok is releasing Pulse Premiere at a time when platform dominance is in the spotlight. That is true in particular of what in many ways has been a one-sided relationship between Facebook and news outlets.

But the opportunity to reach young audiences where they spend their time combined with direct monetisation could leave publishers feeling more confident in investing in “TikTok-specific content.” TikTok, in turn, gets the “slate of new premium, advertiser-friendly content.”

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