How TikTok and Spotify could win through location-based marketing

TikTok, the video creation app, is looking to monetize its popularity, and for good reason: since its founding in 2016, TikTok has achieved one billion downloads. It was reported recently that TikTok is testing sponsored ads that direct users to advertiser’s websites. This development is not surprising because TikTok has already been doing this kind of advertising in China, where the app is known as Douyin. As TikTok seeks 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 exploring already.

About TikTok

TikTok has an interesting history worth noting here. The app, owned by ByteDance, was founded first 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 offers users – mostly Gen Z and millennials – a platform to create short videos of themselves lip-syncing to different songs. But it’s not just the songs that matter. TikTok is also popular because users can add all kinds of customized filters and challenge each other using hashtags. TikTok is a perfect app for a culture that values self-expression, video, and music.

TikTok now has achieved a critical mass needed to monetize successfully, and the app will no doubt adopt some lessons from Douyin to make the app resonate with businesses. For instance, in China, 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 such as Snapchat and Pokémon GO, there are plenty more opportunities for apps and businesses to collaborate on co-branded experiences tied to brick-and-mortar locations. This is where there is real fun to be had. As Foursquare has shown, a business that knows how to capture user data and apply it at the location level has a distinct advantage beyond a company that simply advertises locally on occasion. This is why Spotify is building its own location-based services. For example:

• Spotify partners with Starbucks to make it possible for Starbucks customers to create customized Spotify playlists depending on what users are listening to at different Starbucks locations. Co-Brand is a great way to drive engagement and build customer loyalty at the location level.
• Spotify is working with attribution services to measure the impact of online campaigns on offline businesses. For instance, Spotify and Placed collaborated on a campaign to promote Baskin-Robbins new sundae shakes and ice cream lattes through location-based Spotify ads. According to Placed, people who heard the ads on Spotify visited Baskin-Robbins stores 430,000 times.

Now, how might TikTok leverage location-based services? Certainly the two examples above from Spotify would work. Also, picture these scenarios:

• Marketing-savvy restaurants such as Taco Bell could challenge TikTok users with contests to post videos at different locations and tag them to encourage more content creation at their stores.
• Businesses could offer location-based branded filters as McDonald’s has done with Snapchat.
• Special events tied to music such as Coachella and Lollapalooza could provide event-based promotions that capitalize on the crowds that gather and surge in attendance over periods of days at various locations. (This is a strategy Coachella has employed with Instagram and Snapchat.)

These types of co-brands (with the exception of visual filters) would work well for Spotify, too. In fact, Spotify is just getting started. And Spotify has amassed so much insight into user behaviors through artificial intelligence that Spotify could provide even more highly customized listening experiences and shared playlists, along with, say, contests for users to gather fans at different business locations based on the music they stream. Look at how app RockBot is growing by allowing users at different locations to customize music playlists.

My advice to businesses with brick-and-mortar locations is to look for ways to collaborate with TikTok and Spotify now. What I’ve uncovered is likely the tip of the iceberg. They’re likely farther along than I see through public sources. Meanwhile, fortify your location data and content so that your businesses are findable. Doing so will prepare you for more sophisticated location-based marketing services that I suspect are just around the corner in 2019.

Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.

About The Author

Adam Dorfman

Adam Dorfman is the Senior Vice President of Product & Technology at SIM Partners where he leads the teams responsible for the best in class local automation platform Velocity. Follow him on Twitter @phixed.