Why are Pakistani advertisers ignoring TikTok?

Stuck between a rock and a hard place, marketers around the world are watching as online content creators become viral sensations overnight on platforms such as Bigo, LIKEE, Instagram, and TikTok, the boom in the influencer marketing industry powered by a talent pool that captures eyeballs with entertaining dance moves, memes, and reenactments. Within a month of WHO declaring Covid-19 a pandemic, Hindustan Unilever ran a #LifebuoyKarona challenge on TikTok, with over 55 billion views to date, to encourage proper handwashing.

“In TikTok, they are using a top of mind branding approach,” said Habibullah Khan, director of content at Penumbra, a consulting firm. “You get hundreds of millions of impressions for a campaign with just top five influencers where the product is incorporated within a creative routine like a dance or a skit. It’s much more real and makes the brand look good; it’s also a lot more fun. Somehow you don’t venture into the ‘I’m being sold to’ mindset. This is different from Instagram and Twitter where influencers promoting it make you feel like you are being set up.”

According to a ByteDance pitch deck seen by Profit, TikTok has 25 million downloads in Pakistan of which 68% are female and 96% are Android users. User behavior data shows that the app is opened an average of five times a day, generating 14 billion views a month, and consuming an average 34 minutes of each user’s day. According to Sensor Tower data pertaining to the first and second quarters of 2020, TikTok has ranked in the top five most downloaded apps in Pakistan, on both the Google Play store and the Apple App Store.

“Surely, one can argue that it’s not brand relevant, if one is considering the viability of TikTok for high value brands like Apple or Nike,” said Saif Ali, a digital account director at Empact Activation Services. “But for most [fast-moving consumer goods] FMCG brands that are at lower price points and have a larger universe, it seems irresponsible to flat out ignore a vibrant, engaged community comprised of mostly of the core target group they’re consistently trying to reach.”

Formerly represented in Pakistan by InMobi, an Indian global mobile advertising technology company, TikTok has worked directly with a handful of local businesses for the hashtag challenge offering – for which the company charges a flat $50,000 fee – such as Tecno Mobile Pakistan, Haier Pakistan, OPPO Pakistan, and Honor Mobile. Marketers from the participating companies told Profit that TikTok is the perfect underpriced mass advertising tool for consumer electronics and it is great for building awareness and advocacy.

When businesses wanted to circumvent InMobi in Pakistan, they worked directly with TikTok content creators instead, achieving sizable numbers in reach and impressions. In recent months, QMobile and Servis have notably trended on the platform, with the former creating challenges around dropping your phone while the latter began to trend due to a dance associated with an old advert jingle.

“The number of creators that are consistently reaching over 50% of their total audience is astounding and completely unparalleled,” said Ali. “Further, almost all of them seem to maintain an engagement rate of above 10%, which clearly negates any of the naysayers who claim that TikTok is feeding everyone bot followers. Nevertheless, marketers require authoritative first-party and ideally third-party data to assuage their concerns.”

Ali told Profit that ByteDance currently offers one advertising touchpoint for the Pakistan market through a local partnership with JVentures, an advertising technology firm that has ties to InMobi. Advertisers can purchase a branded hashtag challenge for $50,000 for a duration of 12 days. According to the TikTok Pakistan pitch deck seen by Profit, the branded hashtag challenge reaches nearly 30 million impressions while the corresponding banner ads achieve an estimated three million impressions. Based on audience participating data, it can be inferred that nearly 10% of the Pakistan userbase participates in these challenges. While he appreciates this, Ali added that ByteDance opened this up for Pakistan after C19 and during a recession, where the risk taking appetite was already low.

“I have seen [artists on TikTok create] amazing content in the Middle East, [with] brands supporting them [by] running sponsored campaigns,” said Sundus Shahid, a digital marketing manager at WeUno Agency. “But in Pakistan there is a lack of quality content creation when it comes to this platform. I think it will take a bit more time just like how HBL and Unilever started running sponsored ads on Snapchat.”

Advertisers also have the option to list the music of the hashtag challenge in a music recommendation section, with all of the above leading to user-generated content around a brand, which can in turn be used and amplified on other social media platforms.

“We recommend TikTok influencers as a part of our overall marketing strategy when it makes sense for the target group,” said Nida Haider, managing partner at IAL Saatchi & Saatchi, a marketing and advertising agency. “Even the [government of Pakistan] seemed to recognise the value of TikTok by inviting [content creators] to raise awareness about the spread of Covid. Generation Z demands, expects, and celebrates authenticity so social video platforms like TikTok that are built on individual discovery and authentic content will continue to be successful and the sooner we all get on board, the better.”

With roughly 70% the audience size of Facebook and a mix of content creators akin to those found on Instagram, why is it that advertisers in Pakistan are hesitant to work with TikTok directly? Profit spoke with media professionals at advertising agencies and leading brands to understand the seven factors holding back direct engagement. As reported by Profit, ByteDance is currently in the process of selecting an independent agency to represent it in Pakistan as a reseller, similar to how Facebook named DialZerio. Due to this reason, most sources chose to stay off the record for fear of retaliation.

Orders from above

Speaking to Profit, several executives in media planning and media buying roles said that due to regional or global guidelines, multinational companies do not have the go-ahead to work with ByteDance commercially. They are, however, working their way around the restriction by dealing directly with the content creators on the platform. This is the current workaround used by Unilever Pakistan for the ongoing Wall’s Solero campaign, which has racked up nearly seven million views so far by directly working with content creators and trending without having to cough up $50,000 which Bytedance charges for a Hashtag challenge.

“I feel like there’s been a lot of lobbying and slandering against TikTok globally,” said Ali Imran Memon, head of media at Nestle. “Boycotts don’t solve issues, they create distance and difference. Even during the current #StopFundingHate boycott, a lot of advertisers and agencies came forward to say that we have to work with Facebook to improve on fake news and brand safety concerns. But in the case of TikTok, that hasn’t been the case from the start. Right off the bat, agencies advised more on the brand safety concerns of TikTok than on its influence on and power with the consumer.”

Memon added that in a lot of cases globally, TikTok has been banned due to explicit content and there are bad apples on the platform. But by and large, he believes that ikTok creators are just like any other breed of creators. 

“They are creative, talented and usually making great content,” he said “As advertisers, we should have an influencer led approach to campaigns on TikTok (vs advertising led approach).”

Memon said that advertisers must start to explore how brands can be present and how they can start taking advantage of the platform, adding that if you can select the right influencers with background checks and validation, then create platform suitable content plans – it should be a possibility to have a presence on TikTok for awareness and advocacy.

This mirrors what several industry respondents shared: that when marketing campaigns include TikTok in the media plans, they do so with the caveat that neither the brand nor the agency will directly engage with the ByteDance platform’s sales teams. Instead, influencer marketing teams at the digital agency of record or the designated public relations (PR) firm will directly reach out to specific content creators in the platform, brief them on the campaign, send them content pertaining to hashtags and copy, and boost the videos and clips across the web.

“Advertisers are reluctant to innovate on their own and agencies are filled with cynics who are beaten down to only focus on ideas that clients are likely to approve,” said Ali. [Clients say] ‘focus on the bottom line, save the moonshots for someone else’. This is especially true during Covid-19 when most agencies are bleeding clients and struggling to manage overheads, including salaries.”

Batool Ahmed, founder of research consultancy Storytellers, told Profit that some of the apprehension in working directly with TikTok stems from the inability to distinguish between the content audience and the content creator, with some advertisers viewing the latter in an uncomfortable light. She said that marketers, in turn, struggle with and overanalyze the creators while ignoring the user base of the short video platform.

“On the other hand, the [viewing audience of TikTok are] fully aware of the controversial image of the platform [and are not bothered by] it,” she said. “Interestingly [the viewing audience] claim that the content creators on TikTok are far more talented, original, spontaneous, noisy and organic than any of the influencers of other platforms and even on media. They also challenge the superiority of other platforms by their originality with no aesthetics.”

Brand safety

The root cause of the above concern stems from the lack of brand safety on the platform and the prevalence of content that hints at pedophilia and prostitution throughout the app. Industry leaders said that if ByteDance wants to attract advertisers and agencies for direct deals, it needs to employ filters and tags that allow campaigns to run without being seen next to content deemed unsafe for brands. 

“Right now, TikTok does not provide all the measures where all the checks where you can put in the right kind of content exclusions when it comes to placing your ads over there,” said Roshan Ejaz, head of digital marketing at Wavemaker, a marketing and advertising agency. “So at times, you are not sure – when you’re placing an ad in-stream or running a paid hashtag challenge – where or what kind of content your ad or your communication will show up on. That’s a big challenge right now, one where big organizations like Unilever, Nestle, Coca-Cola – they are not open to advertising at the moment. What they allow is, setting up your own handle on TikTok and running influencer based campaigns over there instead of direct paid media campaigns.”

Speaking to Profit, additional industry executives said that ByteDance must begin hiring either a local reseller or local teams to moderate content to match local sensibilities, customs, and norms while penalising users for breaking the rules. Multinational companies, particularly, are under global pressure to vote with their dollars and cannot be seen as rewarding a platform that encourages its users to post content that attracts bad actors. 

“The main thing that TikTok needs to do is, first of all, filter the content that is coming in, in the form of user-generated content,” said Ejaz. “Right now, I do not think there is proper tagging at the back-end that they can control or filter. They might have some pornography or profanity filters, but later on, when it comes to certain brand areas, where a certain brand doesn’t want to play, I don’t think they have any filters where you can control the content.”

It is worth noting that while multinational companies operating in Pakistan are expected to follow globally mandated guidelines on brand safety, few follow them when it comes to television advertising. When the camera crew interrogated children who lost their parents in the PIA plane crash early this year, no advertiser pulled their ads from the channels that violated the basics of crash coverage, with nearly all advertisers retaining relationships with television channels that published the passenger manifest. So while it is true that brand safety and the lack thereof is a concern for advertisers pertaining to TikTok, the reality is that brand marketers have proven unconcerned with exercising the same concern with above the line mediums such as television, print, and radio.

“One can argue the validity of this concern, given that it seems content moderation on TikTok is very lax and the platform is rife with profane sexual, political, and religious content,” said Ali. “However, the winning counter argument is that brand safety never seems to be an issue when advertising on TV channels that are basically airing snuff videos, often with branded tickers appearing in the same frame as a dead body.”

Pricey entry barrier

As stated above, pitch decks seen by Profit from ByteDance indicate that the Pakistan marketing community has been offered just one advertising touchpoint, the branded hashtag challenge which is priced at a fixed $50,000 for a period of 12 days and an estimated reach of 30 million views.

“Not only did they launch this during Covid-19 when media budgets were already being slashed, it’s a single fixed inventory with a steep price tag that all but disqualifies 80% of the local advertiser market,” said Ali. “It’s the equivalent of YouTube launching ads by only allowing advertisers to purchase a masthead.”

Speaking to Profit, industry executives shared that when Google and Facebook products are being justified to new clients to this day, a $1 test budget is used to show the returns on investment, no matter how little. No advertiser, Profit was told, has $50,000 lying around for a test budget, especially with a platform as jarring as TikTok which already makes advertisers uncomfortable for the many reasons listed in this report.

Platform ban

In the wake of the Bigo app being banned by the Pakistan Telecommunications Authority (PTA), even though the parent company opened an Islamabad office that week, advertisers are hesitant to place TikTok in media plans if there is a chance campaign investments are wasted due to a platform ban. This is especially true for multinational companies, wherein procurement teams are paced through layers of red tape and bureaucracy for regional permissions to engage with unknown platforms, with bans only hurting the process.

“We recognise that both Google and Facebook have influence over the PTA and understand that any business that threatens the duopolistic hold on the $115 million digital media Pakistan market will be removed one way or the other,” said a brand management professional with a leading consumer packaged goods (CPG) company. “So we are waiting to see how ByteDance addresses the concerns of the PTA and are ready to invest once the user generated content matches local sentiments.”

Having experienced platforms bans for Facebook and YouTube, digital media planners are also hesitant for this reason to work with a platform that they themselves foresee a range of red flags against, which is rare in itself that a digital agency executive would understand where a PTA led ban is coming from.

The lack of a self-serve advertising platform

Of the advertisers and agencies that want to experiment with TikTok, Profit was told that the absence of a self-serve advertising platform limits executives with running tests with minimal spending just to see results, with the platform working through a reseller that charges at least $50,000 for the hashtag challenge and other fees in the thousands for banner ads. 

“We have done three influencer campaigns with TikTok and have not advertised directly with the platform,” said Adeeqa Nazir, head of influencer marketing at Digitz. “There is no audience bifurcation. It’s just passed on that ‘oh [socio-economic categories] SEC C & D are majorly present on the platform’, however there is no data. There is no data apart from the active users, average time spent, and a gender split. TikTok influencers are super expensive and quite unreliable.”

While the self-serve platform was launched by TikTok recently, it has yet to open up for the Pakistan market. Keeping in mind that the boycott on Facebook has not impacted the business due to the proliferation of long tail advertisers, executives told Profit that it is in the best interests of ByteDance to allow any size of business to use the platform and create ad formats that are affordable to small and medium enterprises (SMEs) and startups as well as large corporations.

“In their defense, client-side marketers also don’t have any access to actionable data on [monthly active users] MAUs, demographics, content best practices, or anything beyond ‘TikTok is the one with all the hashtag challenges, right?’ to help them make informed decisions,” said Ali. “If TikTok aims to compete with Facebook and Google for digital budgets, they must step up their insights game. Even influencer insights are very thin. It becomes far easier then for advertisers to close the chapter on this and move on to repeating the same tactics on the other platforms.”

A senior media executive at a Dentsu agency told Profit that ByteDance is bringing its recently launched self-serve advertising platform to Pakistan by mid-August and had begun local hiring drives to begin direct operations by the fourth quarter of 2020, adding that the search for a country manager is underway. In June 2020, ByteDance hired Hassan Arshad as the head of public policy for Pakistan, Bangladesh, and Sri Lanka. Arshad has previously served a similar role with Uber for over three years. Bytedance recently hired Syntax Communications as its local PR agency.

Training and certification

Google has a digital garage, Facebook has a blueprint, and ByteDance has the TikTok Business Learning Center. With advertisers and advertising agencies in Pakistan unable to access the learning program, potential decision makers lament at being unable to understand how best to place ads on TikTok, how targeting works, how segmentation can be curated, case studies pertaining to campaign types, are just a few of the additional reasons behind advertiser hesitance with platform engagement.

“This is especially important because, for most SEC A/B brand marketers and advertising agency executives, the content on TikTok is so cringe-inducing that they themselves as people don’t download the app or want to do so,” said a source. “This lack of familiarity with the app creates a sort of barrier to understanding it, the layers of topics and content genres, so it creates a misunderstanding of what the platform is all about. It has shady peddlers no doubt, it also has fun lively people who are becoming celebrities in their own right.”

With Facebook and YouTube for instance, when decision-makers are already users of the platforms themselves and are then asked if they want to place ads on them, they can immediately understand the value proposition. TikTok, as told to Profit, is positioned for a mass market that is distinctly separate from the worldview of media decision-makers, impacting platform familiarity.

“Brand marketers are still mostly unaware and/or confused about what exactly is happening on TikTok,” said Ali. “Naturally, the MBA in a cushy head office job can’t relate to most of the content being shared, and so there’s an unwillingness to explore further and try to understand the dynamics of a new platform that is so distinctly off putting.”

Partner incentives

Executives at media agencies said that ByteDance is unclear on the types of rebates and commissions it offers for engaging it for display ads and the hashtag challenge, creating a barrier between the platform and all the advertisers it could potentially work with. With large media agencies reluctant to work with resellers they are unfamiliar with and eagerly waiting for the self-serve platform to open in Pakistan, Profit is told that a commission-based model or a rebate structure akin to those offered by Facebook and Google in Pakistan is the only way forward if the ByteDance app wants digital media budgets sent its way. 

“This is simply how business is conducted in Pakistan, plain and simple,” a source shared. “Fix your content, integrate filters and tags so my client campaigns do not appear next to content deemed unsafe, and show me rebate slabs for revenue generation. Then we’re golden. Without that, don’t expect media and digital agencies to engage you, regardless of how underpriced your value proposition is – if we are not making money, neither will you.”

Speaking to Profit, a source at ByteDance shared that a new local reseller for Pakistan has been finalised, hinting at it being one of the two largest media agencies in Pakistan. That could either mean GroupM or Starcom, the latter of which is affiliated with Z2C Ltd. It is more likely, just as the case with Facebook appointing DialZero, that ByteDance will select an independent representative agency, led by a seasoned executive that is considered the leading authority in social media marketing, digital advertising, and in business diversification.

As reported last week by Profit, ByteDance has shortlisted several digital agencies for its reseller program. These are Brainchild Communications Pakistan, East River, JVentures, JackOfDigital, The Brand Crew, and three more independently owned companies. They are primarily being evaluated based on the in-market expertise of the owner. The winning agency will be expected to roll out TikTok ad products and capture advertiser interest in reaching the nearly 30 million app users in Pakistan. 

Industry suggestions

Aside from the aforementioned issues, which have obvious solutions, advertisers and agency executives consistently told Profit that one fix would have a trickle down effect on the whole app, user generated content, advertiser interest, and ease of agency advocacy.

“TikTok must build its case on its own because it won’t find any white knights in the local industry who will push for their platform,” said Ali. “They must open up insights and create a business case by outlining audience demographics, interests, and behavior – then link that to existing brands in the Pakistani market. Does it work for a Coca-Cola? Which objectives could it potentially drive for Coke?”

Ali added that Bytedance must take control over its influencer network, a viewpoint that was mirrored by every respondent to this story, with the perspective that the platform needs to bring its Creator Marketplace to Pakistan and set rules in place so that negative content cannot be posted in the first place and that swift actions are taken against users that are violate these rules. Some respondents were of the view that users should start categorising themselves as either casual users or branded creator users, with the latter following stricter rules.

“They’ve done this in other markets where they have dedicated resources for influencer management and sales, but no such framework exists yet for Pakistan,” he said “The opportunity is massive because none of the other social media platforms have yet launched a structured influencer offering for this market, thus TikTok should jump on the opportunity, especially given the insane growth it’s witnessed in Pakistan.” 

He added that influencers are, by and large, free agents who often have very little idea on how to forge brand partnerships and co-create content. Instagram influencers have guessed and checked their way to success, but if TikTok could equip their creators with the tools they need, they could easily steal a lion’s share of the overall influencer spend.

“TikTok needs to open a self-serve platform like Facebook with no minimum spend cap,” said Moeed Sheikh, the co-founder of BlueCastle Digital and a partner at Tudors Pakistan, a men’s fashion brand in Pakistan. “They need to start conducting training and events to create a better understanding and utilisation of the platform. We need to see case studies which are helping and impacting the brands in Pakistan. They really need a local representative and have to work with the top TikTok stars to build their brand safe persona.”