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Planet Money : The Indicator from Planet Money : NPR



SYLVIE DOUGLIS, BYLINE: NPR.

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ADRIAN MA, HOST:

How would you describe your relationship with TikTok?

MAYOWA AINA: Oh, TikTok.

DARIAN WOODS, HOST:

Mayowa Aina is 28. She’s from Washington state. And as we’re talking, she’s sitting at a table piled with stuff – stuff that she bought because she saw them on TikTok.

AINA: It’s all kind of spread out here. I’ve got a pair of roller skates. I’ve got a pair of pink platform strappy heels, two forms of body wash, body exfoliant, perfumes, cable clips, biker shorts and a matching top, Crest 3D whitening strips, a handbag. There’s a mannequin head. And TikTok shows me a lot of women who make wigs, and I thought I was going to be one of those women. I am not.

MA: I mean, there’s still a chance.

AINA: Maybe.

MA: If you ever want to be, now you have the head.

AINA: I know.

WOODS: This table is like a shrine to the power of TikTok marketing.

MA: OK. Yeah, yeah. But Mayowa doesn’t want us to get the wrong idea, right? She says she’s usually not, like, a frivolous spender.

AINA: I can watch YouTube a bunch, not be influenced. Like, I ignore everything on Instagram. And yet why is TikTok so good at making me buy things?

WOODS: So if you got a mystery that’s a little bit economic, a little bit business, a little bit mysterious, who you going to call?

MA: Ghostbusters.

WOODS: You could call Ghostbusters, but you’re going to get a much more satisfying answer if you call THE INDICATOR FROM PLANET MONEY. And what we’ve found is – take heart, Mayowa – it is not just you. The hashtag #TikTokMadeMeBuyIt has been viewed about 8 billion times. This is THE INDICATOR FROM PLANET MONEY. I’m Darian Woods.

MA: And I’m Adrian Ma. Love it or hate it, we couldn’t help but noticing that there is a lot of hype around TikTok right now as this viral marketing machine. So today on the show, we try to understand why this app can be so effective at making us open our wallets.

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MA: When she first started using TikTok, Mayowa says she was mostly watching dance videos and recipes and funny babies. But over time, the app’s algorithm began showing her more and more of these videos of people talking about products.

AINA: It’s very strange. And I’m not following any of those people. I could not tell you one TikTok creator. I don’t know anybody’s name on there.

WOODS: But there they are – people talking in this very earnest way about stuff that they bought, like this buyer.

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UNIDENTIFIED PERSON #1: I got s*** for this a lot growing up, but, like, I’m just going to talk about it because it has helped me so much.

MA: And Mayowa says what’s kind of awesome but honestly also kind of freaky about this app is just how many of the people in her feed that she sees remind her of herself – young, Black women who have similar interests and, you know, similar everyday problems.

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UNIDENTIFIED PERSON #1: Oh, my God. Sometimes your skin gets discolored, and the best way to help with that is tanning oils. They literally smooth your skin out. Like, I am…

AINA: Even though I don’t know these people, it feels like my community of people are, like, using these products. And so if they like it, then I’ll probably like it.

WOODS: Mayowa says a lot of these videos don’t feel like advertising, and that’s what marketers say makes TikTok different from other platforms.

JAMIE GUTFREUND: We used to say, Facebook is where I lie to my friends, and Twitter is where I tell the truth to strangers.

MA: And then what does that make TikTok?

GUTFREUND: It’s leaned back. It’s just – entertain me.

WOODS: Jamie Gutfreund is chief marketing officer at Whalar, an influencer marketing firm. And she says that apps like Facebook are based on what industry types call social graphs – so these graphs of who you know, who you went to school with and so on.

GUTFREUND: And that was really exciting when it first started, but then it quickly became a little old. And I don’t really care what my friends from – I don’t know if I should say this.

MA: Sorry if you’re my friend.

GUTFREUND: I should really not say that too loud in public. But on TikTok, it’s a content graph, which means you are connected based on the things that you watch, are passionate about or are interested in. So there’s no social pressure. When the algorithm figures out that you’re into cleaning products or books or fashion or makeup or sports or whatever random, niche topic that you’re into, it super serves you content about that.

MA: TikTok is less about who you know, and it’s more about what you’re interested in.

GUTFREUND: A hundred percent – and things that you didn’t even know you were interested in. That’s why it’s so addictive. I mean, oh, my God. I didn’t know I liked watching dogs doing agility training. Who knew? But I’m going to watch video after video of that. And it’s entertaining, and I laugh. And that’s really the difference.

WOODS: And Jamie says a lot of people don’t mind if this entertainment also happens to focus on a product. This, of course, has gotten the attention of a lot of brands that want to try and reach new customers. According to a company called Traackr, the number of paid influencers on YouTube and Twitter and Instagram – like, the old guard – they declined or stayed flat last year. And look. We see this cycle almost anytime there’s a buzzy new platform, where influencers are scrambling to get in. And for TikTok, that number of paid influencers increased 14% last year. And Jamie sees it, too – a lot of companies suddenly scrambling to get onto TikTok.

MA: Isn’t that sort of like the 50-year-old walking into a high school with, like, the backwards cap on and saying, like, hello, fellow kids, you know?

GUTFREUND: Yes. And that happens all the time. But there’s a very strong social correction there. If a brand looks too polished, if it looks too sales-y (ph), it doesn’t work.

WOODS: But when it does work, a product can go from unknown to it’s-out-of-stock-and-I-can’t-find-it-anywhere-type demand.

GUTFREUND: I was one of the people that bought the pink stuff. It’s, like, this pink goo that doesn’t scratch anything.

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UNIDENTIFIED PERSON #2: You guys, I got the pink stuff finally. I got it off of Amazon. I’m so excited to try it because I’ve been wanting…

GUTFREUND: They went from 2.6 million in revenue in one year to – they’re at about 34 million.

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UNIDENTIFIED PERSON #2: I went over it a total of three times, and look at the difference. It’s beautiful. I’m so happy.

WOODS: Marketers have a jargony phrase for describing this phenomenon. They say that the sales funnel has collapsed.

MA: The sales funnel – basically a metaphor for how people buy stuff, right? Potential customers go in the big end of the funnel, and if the marketer does their job, some portion of that group will buy the product. And if they really like it, an even smaller slice of that group will become advocates, right? They just go around recommending the product to other people.

WOODS: And that normally takes a whole lot of time and money, like billboards and TV ads and so on. But Jamie says that what TikTok does is take that funnel and flatten it into a disk. People learn about a product, click on a link to buy it. And hours later, they’re on the app, telling the world #TikTokMadeMeBuyIt.

MA: And this is still what gets me about #TikTokMadeMeBuyIt as, like, a thing in the culture, right? It sounds like kind of a brag. But you don’t see people, like, bragging that, oh, Facebook made me buy it, or, like, some TV ad made me buy it. And Jamie has a theory on this.

GUTFREUND: This is not advertising. It’s discovery. People feel smart when they discover something. They’re not being sold to. They’re discovering something that has been presented in an entertaining way by somebody that they trust that’s telling them a story that they found on their own terms in their own time.

MA: At least that is how the algorithm makes it feel.

AINA: I’ll see, like, video after video after video after video after video. And I’m like, OK. I think this is something that I actually need. It feels organic. It might be artificial, but it feels organic.

WOODS: And that makes TikTok a place where time just flies by.

MA: We asked Mayowa just how much time she spends on the app. She looked it up on her phone.

AINA: OK. In the last 10 days, it says 29 hours and 40 minutes.

MA: Almost three hours a day, I guess. You sort of paused there before you read it. What’s going through your mind right now?

AINA: It seems like a lot. And I’m just like…

WOODS: In fairness, I mean, three hours a day is roughly what Americans spend watching TV each day.

AINA: I mean, it’s fine. It is what it is. I spend a lot of time on TikTok. That’s why I bought all these products. Like, maybe if I spent less time on TikTok, I wouldn’t be so influenced by it. But I am in the TikTok universe, and that is fine (laughter).

MA: I mean, this is why I’m a little bit afraid of diving into the TikTok universe myself – because once I enter this universe, I am not coming out.

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MA: This episode of THE INDICATOR was produced by Jamila Huxtable with engineering from James Willets. It was fact-checked by Corey Bridges. Our senior producer is Viet Le. This show was edited by Kate Concannon, and THE INDICATOR is a production of NPR.

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