The TikTok Strategy: Using AI

Platforms to Take Over the

World
A curious combination of prediction technology and human censors enables ByteDance to create a
dynamic global video ecosystem.

While the BAT – Baidu, Alibaba and Tencent – TikTok”, co-written by Minh H. Vo, INSEAD PhD
dominate internet browsing, e-commerce, candidate, and Anne Yang, INSEAD Research
messaging and gaming in China, one kind of Associate. TikTok relies on AI technology in two
success has eluded them so far. Despite their might, ways. First, on the consumer side, its algorithms
they have yet to gain much ground beyond China, quickly learn individual preferences, as they
with the possible exception of Alibaba in Southeast capture not only the users’ “likes” and comments,
Asia. Recently, though, a newer Chinese big tech but how long they actually watch each video. As the
firm, ByteDance, has managed to secure vast clips are very short, TikTok’s algorithms quickly
consumer markets on a global scale with its video build sizeable datasets.
platform, TikTok.
Secondly, on the producer side, AI also helps
Hugely popular with teenagers and millennials, content creators craft viral videos. It simplifies video
TikTok – known as DouYin in China – is a social editing and suggests music, hashtags, filters and
media application used for creating and sharing other enhancements that are trending or have been
short videos. Lasting 15 seconds or less, the typical proven popular based on the category.
clip features fun music, a skit, lip-sync, dance or
light-hearted humour. Users often participate in This AI recipe is so effective that experts have
“challenges” or create “duets”, i.e. videos with split cautioned against TikTok addiction. Similar to
screens built on existing content. The app has been Facebook and Instagram users, the average TikTok
downloaded more than one billion times so far, with user spends 52 minutes per day on the app. In that
a global footprint including India, the United States, timeframe, they may watch more than 200 videos,
Japan, South Korea, European nations, Brazil and including carefully targeted ads or offers.
much of Southeast Asia. In the first quarter of 2019, it
was the third most downloaded app in the world In short, ByteDance combines prediction-based AI
after WhatsApp and Messenger. and network effects on its vibrant multi-sided
platform. More and more users join for a highly
TikTok is a consumer AI success story, as I explain personalised stream of content they find addictive,
in my upcoming case study, “ByteDance Beyond and ever more producers join the ecosystem to
China: Leveraging Consumer Artificial create these quickly trending videos. Advertisers
Intelligence (AI) from Toutiao to Musical.ly and and vendors follow with well-targeted ads and
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 offers. AI tightens the connections between players behaviour and delivering content, as opposed to
so that each can find a valuable niche in a thriving simply making recommendations. In very little time,
community. It is perhaps no wonder that the they learn enough to make stunningly accurate
company became, in November 2018, the world’s predictions about which videos will catch a user’s
most valuable start-up, estimated at US$75 billion, interest. In a way, TikTok soon knows users better
one year after TikTok’s international launch. than they know themselves as behavioural
preferences may differ from stated desires. This
Growing pains: AI-based platforms can be victim drives user engagement – exactly the kind of
of their own success audience advertisers and vendors are after.

However, growing at breakneck speed isn’t without However, inappropriate content is rife on media
difficulties. AI-enabled content consumption and platforms. When an ecosystem of user-generated
production generate their own problems as content takes off, monitoring problems scale with it.
inappropriate content is sometimes created and This is even more true when an app is, in fact,
delivered to users. In China, Bytedance has paid designed to quickly surface the most popular
fines for pornographic content and fraudulent ads. In content. Of course, AI can be used to filter most
the US, the company paid a record fine of US$5.7 inappropriate content, but technology will never be
million in February this year to settle a charge that it perfect. Even if a tiny percentage of questionable
had failed to seek parental consent before collecting content percolates through, it can still mean
personal data from users under the age of 13. thousands of videos. The TikTok solution combines
According to a statement by the Federal Trade AI and human censorship in a way that is specific to
Commission, the company willingly chose to each national culture.
“pursue growth even at the expense of endangering
children”. While ByteDance is still learning along the way, it
has made astounding progress since it launched
Out of similar concerns, India banned TikTok from TikTok for an international audience in September
its app stores in early April this year after one of its 2017. Until now, the BAT trio were so dominant that
high tribunals deemed the app encouraged no one expected a tech start-up to rival their
pornography and other illicit content. The court also success. ByteDance has defied conventional wisdom
warned that the app could expose children to sexual with its clever AI-based video-sharing platform.
predators. The ban was reversed within the month Who knows what new applications it may find in the
but led TikTok to pull 6 million videos from its future for its AI capabilities?
platform and quickly introduce content moderation
features for the Indian market. Likewise, in Jason Davis is an INSEAD Associate Professor of
Indonesia, the government blocked access to the Entrepreneurship and Family Enterprise.
app in early July 2018, claiming that it featured
pornographic and blasphemous content. Found this article useful? Subscribe to our weekly
newsletter.
ByteDance crafted an interesting solution to these
problems. Of course, it applies AI-based filtering of Follow INSEAD Knowledge on Twitter and Facebook.
inappropriate content. But even a 99 percent
effective solution allows thousands of inappropriate
videos to seep through. Its solution, therefore, is a Find article at
unique hybrid of AI and human censorship, in which https://knowledge.insead.edu/entrepreneurship/the-tikt
thousands of employees monitor videos with AI- ok-strategy-using-ai-platforms-to-take-over-the-
based tools. This curious solution has gone global, world-11776
as the firm has established local content monitoring
units in other countries, including Indonesia where a
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staff of 20 now filters videos based on local
regulations and cultural values.

The emerging TikTok strategy: Leveraging AI

for global platform dominance

ByteDance seems to have found a winning format. Its

platform calls for very short videos, letting more
users easily create content. It leverages AI not only
for the production of videos, but for their delivery as
well. Users do not even need to specify their
preferences when they join the platform. AI
algorithms immediately get to work analysing their
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Copyright © INSEAD 2019. All rights reserved. This article first appeared on INSEAD Knowledge (http://knowledge.insead.edu).
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