I downloaded TikTok while researching how to get sponsors on the platform the other day. And after a dark 6-hour rabbit hole, I came out the other side wondering how the heck anybody is making a single dime on this platform?
Well I figured it out, here is how TikTok stars are making money.
1) To Promote Their Own Businesses or Services
Here’s an example I see quite often on the platform. Matchmakers will make TikToks (and they get a ton of traffic). Matchmakers then promote their service to the followers they obtain with future TikToks.
TikTok isn’t the best platform to generate direct sales. Most of your audience is underage; they only watch you for 15 seconds at a time, it’s tough to click off of the platform. That said, it’s so easy to get TikTok traffic in early 2021 that it makes up for the low conversion rates (this will likely get more competitive in the future).
2) Earn Live-Stream Tips (TikTok Coins)
After you gain 1,000 followers, you can go live on TikTok. During the stream your followers can tip you in coins (which they purchase from TikTok). You can later convert those coins into cash. This is a very similar concept to donations on YouTube when a creator goes live.
If you have a considerable following, you can actually make a decent amount of money from live stream tips. If you have 100,000 followers, I’d expect you could down a few hundred dollars in an hour of live-streaming. Which is actually pretty great if you’re an otherwise broke college student with no skills.
3) As a Lead Magnet / Discovery Engine for Their Other Platforms
In early 2021 you can still get outrageous amounts of traffic by being hot and creating a video in a trending format. Very little talent is needed Here’s an example of a trending video format in early 2021. Tons of people (mostly hot girls) are making this exact same video and getting a lot of views from it.
The elephant in the room is that some people are using this as a lead magnet to their OnlyFans account. Which, if you don’t know, is effectively a subscription porn business.
Just to be clear, I’m not recommending you get into the subscription porn game. That said, we do have to acknowledge that it’s an effective business model. If you had 100k followers on TikTok and 1% joined your $15/m OnlyFans account, you’re now making $15,000 per month. Not too shabby.
The same concept applies even if you’re not doing outright porn. TikTok can be an effective lead magnet for your Instagram, YouTube, Blog, etc.
4) TikTok Creator Fund (Ad Revenue Sharing Platform)
This is a very similar concept to YouTube ads, only they don’t pay as well because TikTok isn’t showing a ton of ads right now. You also need at least 100,000 followers and 100,000 views in the last 30 days to join the creator’s fund.
As of this writing (June 24th, 2021), the creator fund pays a CPM of about $0.05. Which is laughably sad. It means that for every 1,000 views you get, you make a nickel. To earn $100, you’d need to get 2 MILLION views!
That said, this may change dramatically over the years. As TikTok starts showing more and more ads and more advertisers come onto the platform, you’d expect the rate to significantly increase.
5) Sponsorships / Brand Deals – TikTok Creator Marketplace
I wrote an entire post about getting TikTok Sponsorships. Long story short, using the TikTok Creator Marketplace is the easiest way to get brand deals on TikTok. Unfortunately, you need over 200,000 followers to get invited to it by TikTok.
It’s harder to get sponsorships on TikTok than other platforms (e.g., podcasts, YouTube, Instagram, etc.). This is for several reasons.
- There’s no place to put an affiliate link (except your profile, but nobody ever sees that), so affiliate programs don’t work.
- Videos are usually 15 seconds max, so there’s no time for a 30-second ad read.
- A branded TikTok is less likely to go viral than normal content.
- It’s hard to measure your audience and determine if they could become paying customers.
- Big brands may still be scared of the platform. TikTok has a reputation as a sketchy Chinese company that’s spying on you and promoting teenagers’ OnlyFans accounts.
Because of this, I’d expect brands to pay lower rates on TikTok than on other platforms. For instance, I’d expect to make at least $10-$30 per 1,000 impressions for a 30-second midroll ad with Podcasts. With TikTok, I’d expect to make less than that.
Anecdotally, I’ve heard of creators being excited that they’re getting paid between $500-$1,000 per post through the creator studio. Which admittedly sounds like a lot of money for a 15-second video. But, that puts the RPM at the $2.5-$5 maximally (because you need at least 200,000 followers to get invited).
6) Sell Shoutouts
People are selling access to their TikTok audience on Fiverr (search TikTok shoutouts). And people are buying these shoutouts for around $80+ a pop. It’s usually people who are either trying to grow their accounts, or sell a product to their audience.
If your channel gets big enough, selling access to your audience is a valid way to monetize.
7) Sell Your Entire Account
This became a big thing on Instagram years ago. People would build up large followings to niche accounts and then sell them off to the highest bidder. Small companies with products desperately want an audience that they can advertise to for free. Meanwhile, TikTokers without products may find it difficult to monetize and be willing to sell the channel.