How TikTok became the phenomenon you can’t afford to ignore

How TikTok became the phenomenon you can’t afford to ignore

In a recent interview, Shou Zi Chew, the London-educated, Singapore-resident chief executive of TikTok, was asked what he was most focused on as the head of the world’s hottest social media app. “Trust building,” he said. “We are a young company, and I think trust is something that we have to earn.”

Scan the headlines and it quickly becomes apparent that Chew has his work cut out. “How TikTok Live became ‘A strip club filled with 15-year-olds’,” screamed one recent example. “TikTok is bad for your brain,” intoned another. A third: “ ‘The corpse bride diet’: how TikTok inundates teenagers with eating-disorder videos.”

Five years on from its founding, TikTok is approaching a crossroads. The app last year surpassed 1 billion monthly users, cementing itsplace among the world’s top social media platforms. Its advertising business is exploding. The company expects to bring in $12 billion this year — three times the sales of Snap, which was founded five years previously, and more than twice that of Twitter. It is a business success story that is almost without peer in recent years.

And if you thought it was just about videos of teenage dance moves, think again. For millions of people across the planet, TikTok is now the prime place for news — be it sourced from the BBC, The Washington Post or amateur bedroom “journalists”. Last week even Boris Johnson signed up, launching the @10downingstreet account.

Yet with every teenager that sets up an account, and with every person that switches from another social media app, the target on TikTok’s back grows larger. Facebook has been so alarmed by its growth that it enlisted a Republican consulting firm, Targeted Victory, to plant negative stories in the press about its rival, falsely attributing dangerous behaviour to viral TikTok challenges and seeking to paint the company as “the real threat”, according to The Washington Post. And in March, a bipartisan group of state attorneys general launched an investigation into whether TikTok is “designing, operating, and promoting its social media platform to children, teens and young adults in a manner that causes or exacerbates physical and mental health harms”.

Chris McKenna, founder of Protect Young Eyes, an online child safety group, said the app is “toxic — I don’t know how else to say it”. He added: “There’s nothing on earth like the TikTok algorithm.”

Mckenna is certainly correct on the latter: TikTok is fundamentally different from virtually every other social media app. Facebook, Snapchat and Instagram are all built around what is known as the “social graph”, the network of people, brands and interest groups one follows. Since the dawn of the social media age nearly two decades ago, the social graph has been the industry’s organising principle. Using that data, the companies’ algorithms cull the most engaging posts and serve them up.

TikTok has no interest in your friends. Instead, it has developed an artificial intelligence-based recommendation engine that divines your desires by interpreting the most subtle of clues. They range from how long you watch a video to whether you share it, and what the content contains. And because each video takes up the entire screen, as opposed to other apps that are peppered with thumbnails and ads, the signal it interprets is much cleaner.

The result: TikTok’s AI peers into your soul to analyse your actions and understand your interests with a speed and accuracy that rivals cannot match. Eugene Wei, an investor and former Facebook executive, has summed it up thus: “When you gaze into TikTok, TikTok gazes into you.”

The result is extraordinarily powerful. In 2020, TikTok raced past Facebook and Instagram in terms of how much time users spend on the platform. This year it is set to overtake YouTube. Active users spend more than 90 minutes a day on the app, according to Sensor Tower, the market intelligence provider. Young people are particularly susceptible. A 2020 study by child protection charity Thorn found that nearly half of American youngsters between the ages of 9 and 17 use the app at least once a month. The research company eMarketer estimates that 400,000 British children aged 11 and under are on the app, plus 7.1 million aged between 12 and 24.

In the last three months of 2021, TikTok removed more than 15 million accounts thought to be controlled by children under the statutory age of 13, but it is a constant battle, not least because it is so easy to lie about your age when setting up an account.

James Currier, a partner at venture capital firm NFX Partners, said TikTok was less a social network, more like “high-dopamine TV”. And its allure has not been lost on rivals.

Mark Zuckerberg this month announced a monumental shift in how the core Facebook and Instagram experiences will function, moving away from the social graph and investing heavily in an AI-powered recommendation engine that will serve up the most viral posts from across its network — just like TikTok.

Ben Thompson of Stratechery, a tech news commentator, wrote: “When Zuckerberg realises the error of his previous approach, he not only changes course but goes all-in on the new direction. Today it means abandoning the social graph as the core organising feature of the apps experience.”

And it is not just Facebook — which launched a Reels video feature to compete head-on with TikTok — that is worried. YouTube too has launched a rival format, Shorts; Snap has Snapchat Spotlight.

Despite the competition, TikTok is expected to outpace all rivals this year, with eMarketer predicting it will add another 150 million users globally. “TikTok is reshaping the online media landscape,” said Bank of America Merrill Lynch’s analyst Justin Post. “We see its traction as most challenging for Snap, Instagram and YouTube, where the platform competes head-to-head for younger users and ad dollars. Facebook, Pinterest and even streaming companies could [also] see an impact.”

In other words, TikTok is eating everyone’s lunch.

Zhang Yiming, 39, the son of civil servants, founded ByteDance, TikTok’s parent company, in a Beijing flat ten years ago. The software engineer married his college sweetheart and worked at a few start-ups after university, with a brief stop at Microsoft in China, before setting up his company.

Its first product was Toutiao, a news aggregation app powered by algorithms that tracked users’ behaviour across thousands of sites to form an opinion of what might be of most interest to them. This “interest graph” concept would go on to form the basis of TikTok, which began under the name Douyin in China in 2016. Zhang launched TikTok outside China in 2017 and in America in 2018 after ByteDance bought rival, which had built up a following of young people posting lip-syncing videos.

Zhang drove employees hard. He instituted a six-day work week, like many of his domestic rivals, and required executives to make their own TikTok videos. If their creations did not obtain a sufficient number of “likes”, he made them do press-ups.

Beyond its recommendation algorithm, the key differentiator for TikTok was just how much money Zhang was willing to pull from ByteDance’s other businesses — and outside investors — to plough into the platform to establish it as a brand. Currier, at NFX, estimated the company has spent up to $4 billion on ads since it launched in 2017. This flies in the face of the typical strategy in social media, which relies on people organically inviting friends and family until a network reaches critical mass.

“No one had ever tried that before,” Currier said. “They were paying up to $30 or $40 [on ads] per app install at one point, when the lifetime value of a user might be $5. But what they were seeking was the network effect, and they got it.”

Open the app, and its ability to keep people once all those marketing dollars have lured them in is apparent. A video immediately starts playing, followed by another, and another. Before one knows it, a half-hour has passed watching the latest dance craze, or people telling jokes, or singing or cleaning toilets. The #cleantok hashtag has more than 37 billion views; toilet cleaning makes up an alarming proportion of the videos.

Chew, who succeeded Zhang last year, likes to say that “there really is something for everyone”. He’s not wrong. There is #booktok, for reading enthusiasts, #golftok, #transtok, for people transitioning genders, and #nosejob, where people post videos of their surgery and recovery. Even news organisations, from ABC News to the Daily Mail, have set up channels that rack up millions of views of posts summarising news items.

An investigation by The Wall Street Journal revealed just how efficient TikTok is at zeroing in on one’s interests, also known as “rabbit-holing” people. It created more than 100 fake accounts. The profiles contained no overt information beyond an age and a location, but they were endowed with certain interests so that the accounts would pause or rewatch videos related to those interests. Among them were yoga, extreme sports and astrology.

What the investigation showed was that, often in a matter of minutes, the app began funnelling content to feed the accounts’ undeclared desires. In the case of one account, which was geared toward sadness and depression, its feed transformed, the paper said, in less than 40 minutes of total watch time to “a deluge of depressive content”.

The surprising thing about TikTok is that, among the big social media apps, it has done the most to protect its users, especially young people. It is the only one that allows parents to pair their device so they can monitor what their kids are seeing. It does not allow direct messages for users under 16, and prohibits notifications for those aged under 18 after 10pm.

“They make you look the other way,” McKenna said. “But it is death by a thousand cuts,” he added, referring to the steady stream of highly sexualised, suggestive or inappropriate videos that are fed to users. They are not illegal, but they are relentless.

The company claims that it has taken “industry-leading steps” to protect minors. For brands, that appear to be enough. Uefa just named the platform as the official partner of the women’s Euro 2022 tournament. The app has also signed a marquee deal with the Royal Shakespeare Company, and this year is sponsoring both the Cannes film festival and the Eurovision Song Contest.

Stories abound of companies, and individuals, who have been swept up by the algorithm, turning a ho-hum product or a business or a person into an overnight sensation. Kat Horton, a 29-year-old former consultant in New York, left her job last year after her goofy videos on Excel spreadsheet shortcuts went viral. She now brings in seven figures selling courses that she promotes on TikTok.

Ryan Pamplin struggled for months to get traction on TikTok for BlendJet, his portable blender startup. When he finally hit on a solution the algorithm liked — using social media influencers to promote the products rather than more pricey, professionally produced ads that worked well on Facebook and Instagram — his sales tripled in three months.“It’s an entirely different skill set to be successful on this platform,” Pamplin said.

Zhang, whose net worth is estimated at $50 billion, stepped down last May. He said the move would allow him to take a higher-level, strategic role at ByteDance. “The truth is,” he told employees, “I lack some of the skills that make an ideal manager.”

His resignation came after he saw off an attempt by Donald Trump to force the sale of TikTok’s US operation. The president had branded the company a national security risk, claiming that it was gathering data on US citizens, “potentially allowing China to build dossiers of personal information for blackmail, and conduct corporate espionage”. TikTok argued that all data for British, European and American users is held in servers in America and backed up in Singapore. Next year it will move all British and EU data to a new facility in Ireland.

Under threat of a US ban, TikTok agreed to sell its American arm in 2020 to Walmart and Oracle. The shotgun wedding fell apart once Joe Biden took power.

Yet even as that controversy fades into the rearview, TikTok’s trust deficit remains — despite the assurances from Chew, who read economics at Imperial College London. This is in no small part due to the fact that the app’s core algorithm is designed in China. This makes TikTok unique in the media landscape: the first and only company from Communist China to make a dent in the West.

Maria Bridge of the ethical campaign group Center for Humane Technology said: “TikTok is a propagandist’s dream: profile someone’s tastes and opinions, then use an algorithm to subtly nudge them in whatever direction you choose. Point that tech at a generation of teens and it’s terrifying in anyone’s hands.”

One may never look at toilet-cleaning videos quite the same way again.

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