How TikTok and Spotify won through location-based marketing
There are many opportunities for apps and companies to collaborate on co-branded experiences that are tied to
stationary locatione are bound.
TikTok, the video creation app, is looking to leverage its popularity for profit, and for good reason: since its inception in 2016, TikTok has reached one billion downloads. It was recently reported that TikTok is testing sponsored ads that direct users to advertisers' websites. This development is not surprising, as TikTok has already done this type of advertising in China, where the app is known as Douyin. As TikTok looks to grow, I think it's worth considering whether location-based services could be part of the company's future - a path that streaming app Spotify is already on.
TikTok has an interesting history that's worth mentioning here. The app, owned by ByteDance, was initially founded as Douyin in 2016 before launching in the United States as TikTok in 2017 and merging with popular video creation app Musical.ly. The app gives users - mostly Gen Z and millennials - a platform to create short videos of themselves to various songs. But it's not just the songs that matter. TikTok is also popular because users can add all kinds of custom filters and challenge each other with hashtags. TikTok is a perfect app for a culture that values self-expression, video, and music.
TikTok has now reached a critical mass needed for successful monetization, and the app will undoubtedly take some lessons from Douyin to help it catch on with businesses. In China, for example, Haidilao Hot Pot, a popular hot pot chain, challenges users to create their own hot pot dishes and post them on Douyin, along with hashtags that raise awareness for the business.
Spotify goes local
But as we know from apps like Snapchat and Pokémon GO, there are many more opportunities for apps and businesses to collaborate on co-branded experiences tied to brick-and-mortar locations. There's really a lot of fun to be had here. As Foursquare has shown, a company that knows how to capture user data and leverage it at the location level has a distinct advantage over a company that occasionally only advertises locally. This is why Spotify is building its own location-based services. For example:
- Spotify is partnering with Starbucks to allow Starbucks customers to create custom Spotify playlists based on what users are listening to at different Starbucks locations. Co-brand is a great way to drive engagement and increase customer loyalty at the location level.
- Spotify works with attribution services to measure the impact of online campaigns on offline businesses. For example, Spotify and Placed worked on a campaign to promote Baskin-Robbin's new ice cream sundaes and ice cream lattes through location-based Spotify ads. According to Placed, people who listened to the ads on Spotify visited Baskin-Robbin's stores 430,000 times.
Now, how could TikTok use location-based services? Surely the two examples above from Spotify would work. Imagine these scenarios as well:
- Marketing savvy restaurants like Taco Bell could challenge TikTok users with contests to post and tag videos in various locations to encourage content creation in their stores.
- Companies could offer location-based brand filters, as McDonald's has done with Snapchat.
- Special events tied to music, like Coachella and Lollapalooza, could offer event-based promotions that capitalize on crowds gathering at various venues over several days and drive attendance. (This is a strategy Coachella has pursued with Instagram and Snapchat).
- This kind of co-branding (with the exception of visual filters) would also work well for Spotify. In fact, Spotify is just getting started. And Spotify has gained so much insight into user behavior through artificial intelligence that Spotify could offer even more personalized listening experiences and shared playlists. Along with contests where users can gather fans at different store locations depending on the music they stream. Check out how the app RockBot is growing by allowing users in different locations to customize music playlists.
The advice to companies with brick-and-mortar locations is to look for ways to work with (for example) TikTok and Spotify. What's been uncovered here is likely just the tip of the iceberg. In the meantime, expand your location data and content to make your businesses discoverable. Doing so will prepare you for more sophisticated location-based marketing services that are suspected to be just around the corner in 2019.