How does TikTok make money?

How does TikTok make money? Learn about the different ways TikTok influencers and users earn money through TikTok in this post.

A lot of new social media applications and platforms have risen over the past years and TikTok is one of those which really rose into fame. Until now, TikTok is still one of the most famous and most used social media platforms especially by the younger generations. But how do social media apps like TikTok remain running despite the competition? The answer is monetization. Social media apps need funds in order to continue operations and there are various ways platforms like TikTok earn. In this post, we will tackle some of the ways TikTok make money.

What is TikTok?

Launched in 2016 by ByteDance, TikTok is one of the most famous social media platforms that allows users to watch, engage with, create, and share short engaging videos ranging from 15 seconds to 3 minutes. They can also add songs, sounds, filters, texts, and many other effects to make their videos more interesting. What makes TikTok unique from other platforms are the challenges which usually involve trending hashtags.

TikTok earns money through ADVERTISING

One of the main avenues for monetization in TikTok is the TikTok for Business which was launched in 2020. Paid advertisements are offered to brands so they can promote their products and services, and improve their marketing strategies. The following are some of the features included in TikTok for Business:

In-feed video ads

They are are short-form videos that appear in between users’ feeds as they scroll through the For You page.

Brand takeover ads

These are ads that immediately appear as you open TikTok and are used by brands to catch the attention of their target audience.

Top view ads

These usually appear once the user is already using the app and may last for up to 60 seconds.

TikTok earns money through IN-APP PURCHASES

TikTok users are allowed to buy coins via in-app purchases. These coins can be used to send in-app gifts for their selected video creators to show appreciation to their content. The app provides 100 to 10,000 virtual coins that range in price from 99 cents to $99.99 and are only offered to users 18 years of age and above. The gifts that creators receive from their viewers are converted into diamonds which they can withdraw as cash once it reache a certain a amount.

TikTok earns money through CREATOR COMMISSIONS

Just recently, the TikTok Shop opened which connects creators and brands to users who want to purchase their products. Creators use their influence and popularity to attract buyers into their TikTok shops where they sell and promote products of their partner brands. They can get commission from the product sales or they can also sell their own products.


Branded challenges allow brands to create their own hashtag challenge and pay TikTok so it will appear on users' discovery pages. These encourage TikTok users to join the challenge by creating videos which will then help the brand generate organic traffic to their accounts as a form of advertisement. Meanwhile,  branded effects allow brands to make branded custom stickers that people can use in their videos. Such brands pay TikTok so they can have the challenges and effects up and running on the platforms. The former lasts from six to ten days while the latter can go live for up to ten days.

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