The Signaling Theory of Marketing: Understanding TikTok and ByteDance's Success


Hatched by Glasp

Sep 06, 2023

3 min read


The Signaling Theory of Marketing: Understanding TikTok and ByteDance's Success


In the world of marketing, every action we take is a form of signaling. Signaling refers to behavior that conveys something about ourselves, whether or not it is true. It is a way to signal status and value to others. This concept can be applied to various aspects of business, including education, professional roles, and even social media platforms. In this article, we will explore the signaling theory of marketing and delve into the success story of TikTok and its parent company, ByteDance.

Signaling in Education and Professional Roles:

Education is a prime example of signaling. Advanced degrees or prestigious college degrees may not necessarily indicate more competence, but they serve as a signal to hiring managers that an individual is valuable. It also enhances the employer's reputation by hiring someone from a renowned institution. Similarly, looking busy at work can be a way to signal the importance of one's role and keep the boss off their back.

Signaling in Social Media Marketing:

In today's digital age, social media platforms play a significant role in marketing. Marketers use these platforms to signal value to potential customers. Consistency is a key factor in this process. As Dana Todd suggests, presenting the same face often enough is perceived as authentic and real by audiences, even if it is a complete hoax. This consistent signaling helps marketers build trust and credibility with their target audience.

TikTok and ByteDance: The Attention Factory:

ByteDance, the parent company of TikTok, has gained immense popularity in recent years. During its early years, ByteDance was known for serving trashy click-bait content to its users. However, they quickly realized the potential of mobile internet usage and transformed their approach. Mobile internet usage is characterized by short and frequent sessions, often lasting less than 60 seconds. ByteDance understood that recommendation engines, which infer user preferences based on past behavior, were more effective than traditional search engines.

Content Diversification and Revenue Generation:

ByteDance's success in content diversification can be attributed to their superior classification and recommendation algorithms. They went beyond the popular categories of teen lip-sync and dance videos and catered to a wider audience. User-generated videos often lack accurate metadata, making search an inefficient method to match users with content. ByteDance's recommendation engine, on the other hand, provided a more personalized and efficient user experience.

In terms of revenue generation, advertising accounted for approximately 80% of ByteDance's earnings. However, they also explored other avenues such as games, paid knowledge, e-commerce, and additional services like blue tick account verification fees. This diversified revenue model contributed to their overall success.

The Rise of Short Video and Changing Internet Habits:

The rise of short video platforms like TikTok represents a shift in internet consumption habits. Viewers and advertisers are drawn to the compelling format that captures attention in a concise and engaging manner. This change in consumer behavior has opened up new opportunities for marketers to reach their target audience effectively.


In conclusion, the signaling theory of marketing is a powerful concept that underlies many aspects of business and marketing strategies. TikTok and ByteDance's success story exemplifies the effectiveness of signaling in capturing and retaining user attention. To apply this theory to your own marketing efforts, here are three actionable pieces of advice:

  • 1. Consistency is key: Present a consistent brand image and messaging across different platforms to build trust and credibility with your target audience.
  • 2. Embrace personalized recommendations: Invest in recommendation algorithms that can accurately infer user preferences based on their past behavior, providing a more tailored user experience.
  • 3. Adapt to changing consumption habits: Stay updated with the latest trends and formats in internet consumption, such as short videos, and explore new avenues to reach your target audience effectively.

By incorporating these strategies, you can leverage the power of signaling theory to create a successful marketing campaign and grow your business in today's digital landscape.

Hatch New Ideas with Glasp AI 🐣

Glasp AI allows you to hatch new ideas based on your curated content. Let's curate and create with Glasp AI :)