TikTok and Short-Form Video Rivals Take Spotlight at NewFronts

The annual IAB NewFronts kicks off its four-day event Monday, and all eyes are on short-form video heavyweights TikTok, Meta and YouTube.

Over the past few years, TikTok was an easy sell to advertisers because it was undeniably the dominant short-form video platform. However, given its recent drama with U.S. regulators and the increasing competition from rivals like Reels and Shorts, it will be facing a far greater challenge this time around.

While most advertising channels are estimated to see slower growth in 2022 compared with 2021, short-form video is expected to maintain the same growth rate year-over-year, according to Magna Global. Because of the increasing popularity and reach of apps such as TikTok, Reels and Shorts, advertisers and marketers are seeing more value in marketing across the platforms. 

According to HubSpot’s latest social media report, social media marketers plan to invest the most in short-form video this year. From a marketing perspective, short-form video advertising is considered lower budget and cost saving because ads on TikTok, Reels and Shorts don’t always require as much expensive production behind them. Lower-cost advertising strategies will be key this year as companies look to get more for fewer dollars spent. 

Even as advertisers continue to see value in short-form video platforms, the platform that they see the most opportunity this year has shifted. TikTok remains popular, but marketers view Instagram as a platform with far greater return on investment long term. According to HubSpot’s report, marketers said they think Instagram has a more accurate algorithm and thus makes it a better place to grow a brand’s audience. 

Last week, Meta reported a strong Q1, with revenue growth of 3% from last year. The company attributed part of that to higher engagement across Reels, TikTok’s biggest rival. On the company earnings call, CEO Mark Zuckerberg said that since Reels’ launch, time spent on Instagram increased 24%, with users sharing Reels more than two billion times every day. 

That being said, consumers are still choosing TikTok as their most used platform for short-form video content. But the growing competition is undeniable with Instagram Reels right on TikTok’s heels.  

However, even as short-form video content grows in popularity among both advertisers and consumers, there are still challenges in the space including issues regarding monetization for content creators. Creators understand that having a presence on TikTok, Reels and Shorts is almost necessary to grow their brands, but the lack of proper monetization has been weighing on the space. 

When short-form video was just beginning to gain traction, companies like TikTok, Meta and YouTube launched creator funds with the promise that they would be revenue sharing with creators on their platforms, giving them a means to make money aside from sponsorship deals. Still, the promise seems to have been greater than the reality. 

Short-form video is still a massive growth area, but the space has a lot of kinks to iron out. As TikTok begins to lose some of its dominance and the ad dollars get dispersed across other platforms, the narrative around short-form video at NewFronts this year could be very telling about what to expect from the space going forward.  

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