Analysis of the Impact of TikTok's Recommendation Algorithm on the Digital Advertising Market and Competition with Traditional Platforms

TikTok’s recommendation algorithm is fundamentally different from traditional social media platforms, prioritizing content entertainment and user engagement rather than relying on social relationships or follower counts [1]. By analyzing user behavior (watch time, interaction rate, etc.) in real time to push content, TikTok’s For You Page allows new brands and niche content to gain exposure quickly. This algorithmic feature has reshaped the creation logic of ad content; ads show characteristics of “non-professionalism” and “immersion”, and brands need to position themselves as “entertainment companies” to succeed [1].

Market data shows that TikTok ads have lower CPM and higher user engagement rates [0]. In December 2025, TikTok ad traffic recovered from 0% to 16% after a brief interruption and is expected to continue growing [0]. Both small businesses and large brands are increasing their investments in industries such as food, beverages, personal care, and beauty; the platform has also launched AI advertising tools like Symphony generative creative tools to help advertisers automate content optimization and delivery strategies [0].

Traditional platforms like Facebook and Instagram have begun adjusting their algorithms, increasing the weight of short videos and launching TikTok-like recommendation features (such as Reels), but due to TikTok’s advantages in algorithm accuracy and user engagement, traditional platforms still face significant competitive pressure [1].

1. Core Algorithmic Differences Are the Source of Competitiveness
   : TikTok’s content recommendation model that breaks away from social relationship chains has broken the “traffic barriers” of traditional platforms, providing equal exposure opportunities for new brands [1].
2. Spillover of the Entertainment Trend in Ad Content
   : The logic of TikTok’s “entertainment ads” not only affects its own platform but may also drive the entire digital advertising industry to transform from “exquisite aesthetics” to “authenticity and interactivity” [0][1].
3. AI Tools Improve Advertising Efficiency
   : The AI advertising tools launched by TikTok will further lower the threshold for ad creation, improve delivery accuracy, and consolidate its competitiveness in the digital advertising market [0].

• The long-term stability of ad effectiveness is not yet clear and needs further observation [0].
• The platform has policy risks that may affect the stability of ad traffic [0].
• There are disputes about the algorithm’s “cultural bias” or “political tendencies”, which need continuous verification [0].

• There is great room for innovation in ad formats; brands can enhance user engagement through immersive content [1].
• AI advertising tools empower advertisers to reduce costs and optimize results [0].
• Traditional platforms can learn from TikTok’s algorithmic advantages to optimize their own recommendation mechanisms [1].

TikTok’s recommendation algorithm has reshaped the content creation and delivery logic of the digital advertising market by weakening social relationships and emphasizing entertainment and user engagement; its ad effectiveness (low CPM, high engagement rate) has attracted a wide range of advertisers [0][1]. Traditional platforms are forced to adjust their strategies to cope with competition, but there is no quantitative data to support the specific impact on user migration and market share [0]. The industry’s evaluation of TikTok’s algorithm is mainly positive, but issues such as the long-term stability of ad effectiveness and platform policy risks need to be monitored [0].