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HomeNEWSWall Street compares TikTok to cocaine and crack • ENTER.CO

Wall Street compares TikTok to cocaine and crack • ENTER.CO

Wall Street compares TikTok to cocaine and crack. This is due to several analysts after doing research on the effects of short video for the digital advertising industry.

Analysts compared TikTok to an epidemic of digital crack cocaine that is spreading to all users of digital platforms. The appearance of short videos earned TikTok an average of 1 billion monthly users in less than 5 years. What the algorithm of this Chinese platform does is drive the trends to the feed of users and thus “generate a discharge of endorphins that makes users addicted,” they say. The most complicated thing in the panorama is that large platforms such as Facebook, Instagram, Snapchat, YouTube, Amazon and many more have joined this trend of ‘short videos’, amplifying this ‘epidemic’.

The main consequence that Wall Street analysts for comparing TikTok with these drugs is because they foresee is the impact on effective advertising. The one in which it is necessary to obtain an action on the part of the users, because now there is much less attention, they pass by the content and ignore the ads. This is where the possibility of monetizing short videos becomes complicated. The panorama in terms of digital advertising is as follows: TikTok accounts for 16% of global spending. For its part, Facebook claims that 25% of total time on Instagram is spent on reels and YouTube estimates that 1.5 billion people watch 30 billion Shorts every month.

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Wall Street analysts fear that short videos will erode users’ attention spans. And consequently, content and platform creators will lose their business. They believe that short videos will dilute the monetization capacity of digital content. This is because short videos have limited ability to place ads, and in some cases you can’t even embed any at all. Hopes are pinned on Facebook and TikTok coming up with a way to make direct response ads work with short videos. This is why Wall Street compares TikTok to drug addiction.

Image: Amanda Vick on Unsplash

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