Twitch and TikTok: The Next Big Retail Media Platforms?

Since the rise of social media, more and more brands have found ways to leverage growing platforms to influence shoppers to buy their products. It’s no surprise that Amazon.com had the foresight to acquire Twitch back in 2014 for $1.1 billion, and it’s also why Walmart acquired 7.5 percent of TikTok this past year. And now, with social commerce expected to skyrocket 43.8 percent in 2021 to more than $36 billion in sales, both Twitch and TikTok may well be the next big platforms to watch.

Retail media advertising platforms are exploding as retailers leverage their customer behavior data to help brands serve highly relevant ads for their products on and off retailers' websites. In essence, this closes the gap between above-the-line awareness and below-the-line conversion in order to drive incremental sales for both the retailer and the brand.

So why would each of the two largest retailers in the U.S. bother with livestreaming platforms like Twitch and TikTok? Let’s dive in.

Twitch

According to eMarketer, live video streaming was the top new form of behavioral engagement in 2020. In fact, Nielsen is even building out a new ratings system for streaming!

Another mind-blowing statistic is that 17 percent of all digital video viewers watch through Twitch. Let’s break down just what Twitch is and how to capitalize on its unique offering. From 2011, Twitch has grown from a small streaming platform to hosting 1.6M viewers at any given time. That’s 10 percent more than both MSNBC or CNN’s reported daily total viewers.

“Streaming” - the bread and butter of Twitch - is where broadcasters live-record themselves performing an activity while simultaneously engaging their viewers in conversation. For the vast majority of Twitch streamers, this means it showcases their skills on popular video games like League of Legends, Fortnite, and PUBG.

More recently, Twitch hosts channels for cooking shows, live sports commentary, and lifestyle pieces. This open platform has also only grown stronger after Amazon acquired it in 2014. In fact, it was just announced that Twitch’s live-streaming functionality will be incorporated into the Amazon Music app, enabling fans to engage with artists in brand-new ways and move seamlessly between live streams and recorded music.

Rumor has it that Amazon is investing heavily into making Twitch significantly more mainstream and not just about video gameplay. For example, did you know that you can attend virtual concerts on Twitch for artists like H.E.R., who played at this year’s SuperBowl?

This comes at a perfect time when artists are streaming live concerts more than ever, bringing a completely new audience to Twitch. According to ComScore, Twitch’s viewers are 81.5 percent male and 56 percent are 18-34 years old. This new music offering could bring a shift in their unique visitors. That now opens up a whole new conversation about what kind of brands should be on and advertise on Twitch to capture this audience.

TikTok

If we look at the Ocean Spray Skateboarder on TikTok last year who drove 16 billion impressions and 60 million incremental cans sales, it’s obvious that social platforms can create a surge in sales for retailers and brands alike.

Let’s take a look at the numbers: in February of 2019, the TikTok app reached its first billion downloads, and took just under eight months to gain half a billion more. By April of 2020, the video app had been downloaded more than two billion times worldwide on both the Apple App Store and Google Play. In other words, TikTok was able to double its number of app downloads in just over a year—a clear sign of its amazing popularity.

The latest TikTok statistics show that, as of January 2021, the platform has 689 million monthly active users worldwide. That makes TikTok the seventh-largest platform in terms of users, ahead of others that have been around much longer such as Snapchat, Pinterest, and Twitter.

To give you an idea of how other apps performed in comparison with TikTok’s growth, it took Instagram six years from its launch to gain the same amount of monthly active users that TikTok managed to achieve in under three years. Facebook, widely known as the king of social media, took more than four years. This means that not only is TikTok able to keep its current user base strong, but it’s also constantly evolving to attract a new and growing user base.

TikTok offers ads as well as a social platform. From branded hashtag challenges, to brand takeovers, and in-feed ads, TikTok does make advertising easy for brands to promote their products through the app. Rumor has it that TikTok will soon allow their

Creators (that’s TikTok’s term for “Influencers”) to post a direct link into each post. Brands can leverage a “better-together” approach to paid advertising and influencer marketing to tag team sales growth.

Is Your Brand Right for TikTok and/or Twitch?

TikTok and Twitch are emerging as targets for retail brands offering apparel, cosmetics, consumer electronics and a range of other lifestyle and entertainment products.

The user demographics for TikTok and Twitch in particular have evolved with the explosion of new streaming content and audiences; everything from yoga brands to healthy snacks also have an opportunity to thrive here. Before you start developing your advertising strategy, you’ll need to find the right personalities who resonate with your brand’s audience. Twitch offers tools like Twitchtracker that can give you the data and analytics you need to decide what streamer to partner with and where to place your ads.

At Channel Bakers we’ve found that video marketing can be extremely impactful and lucrative for businesses, offering higher rates of conversion and positive engagement for shoppers’ journeys throughout the entire purchase cycle. The huge increases in streaming activity of late suggests that Twitch and TikTok are not only here to stay, but are the big ones to watch for continued growth in the coming years.

Joshua Kreitzer is the CEO and founder of Channel Bakers, an advertising and marketing agency that specializes in helping brands develop full-funnel advertising strategies leveraging data to grow sales within specific shopping channels.