TikTok and Economic Growth in the EU:
Discovery, Creativity & Entrepreneurship
Methodology Note
Economic impact of advertising on TikTok app
- Total business spending on social media advertising in the EU-27 from Statista
- TikTok’s share of the social media advertising market, estimated using video advertising’s share of display advertising from PwC’s Global Entertainment & Media Outlook database, combined with TikTok’s share of the EU video advertising market derived from TikTok’s European filings at Companies House
- A short-term ROAS of 11.8 from a marketing mix modelling study conducted by Dentsu across Nordic markets (Norway, Denmark, Sweden, Finland)
We apply input-output modelling techniques to the Eurostat Supply and Use tables to estimate Type II multipliers (which adjust for indirect and induced effects) for each sector of the EU economy. We aggregate this to an EU-wide Type II multiplier by taking an average, weighted by each industry’s output and use of social media for marketing (drawn from Eurostat data on the share of enterprises using social media for marketing). We multiply direct business impact by this Type II multiplier to estimate the overall economic output enabled by TikTok.
Impact of TikTok on international reach for EU businesses
We estimate the number of EU businesses that use TikTok to reach international customers and clients, and the value of exports this activity supports.
Number of businesses using TikTok for international reach
To calculate the number of businesses, we combine Eurostat data on the total number of enterprises in the EU with survey data on the proportion of businesses that use TikTok for international marketing.
We use:
- Total number of enterprises in the EU-27 from Eurostat’s Structural Business Statistics
- The proportion of businesses using TikTok to reach customers abroad, from a nationally representative survey of EU businesses conducted by Public First
- Demographic weights applied to ensure survey results are representative of the EU business population
The survey asked businesses whether they use TikTok to reach clients or customers outside their country, either through organic content or paid advertising. We apply the weighted proportion of affirmative responses to the total business count to derive our estimate.
Value of exports supported
To estimate the value of exports supported by TikTok, we calculate the share of total TikTok-driven economic activity attributable to businesses using the platform for international reach, then apply an adjustment to isolate inter-EU exports.
We use:
- The total economic activity generated by TikTok advertising in the EU (see Economic Impact of advertising on TikTok App methodology)
- The proportion of EU businesses using TikTok for international reach (calculated above)
- Total EU trade minus the share of EU trade that is extra-EU (i.e. exports to countries outside the EU) from Eurostat trade statistics
We multiply the total economic impact of advertising by the share of businesses using TikTok for international reach to estimate total export-related activity. We then apply the inter-EU trade ratio to isolate the portion representing exports to countries within the European Union.
Impact of TikTok on advertising productivity
We estimate the productivity gains that EU businesses achieve by using TikTok for advertising, measured as the time savings in advertising content production compared to other channels.
Production time reduction
To estimate the reduction in advertising production time, we compare the time businesses report spending on TikTok content production against the weighted average production time across all advertising channels.
We use:
- Survey responses from a nationally representative poll of EU businesses conducted by Public First, asking how long their production process typically takes for advertising content on each channel (from conception to public release)
- Demographic weights applied to ensure results are representative of the EU business population
- A mapping of survey response categories (e.g. “1-2 days”, “1-2 weeks”) to numerical day values
We calculate the weighted average production time for TikTok and compare it to the overall weighted average across all channels (weighted by the number of businesses using each channel). The percentage difference represents the production time reduction.
Productivity savings value
To translate these time savings into a monetary value, we estimate what businesses would have spent on advertising production if they had used alternative channels with longer production times.
We use:
- Total social media advertising spending in Europe from Statista
- TikTok’s share of the social media advertising market from Statista
- The production time reduction percentage calculated above
We calculate the counterfactual spend — what businesses would have spent if production took as long as the average across all channels. The difference between this counterfactual and actual spend represents the productivity savings that businesses can redirect to other activities.
Consumer surplus from TikTok in the EU
We estimate the consumer surplus — the value users derive from TikTok beyond what they pay for it — for adult users in the EU.
We first measure users’ willingness to pay for TikTok using a stated preference survey approach. We draw on a nationally representative consumer survey conducted by Public First across EU countries which asks users whether they would pay various monthly fees to continue using the platform or go without it. We apply demographic weights to ensure results are representative of the adult population.
For each price point, we calculate the weighted share of users who would pay that fee rather than go without the platform. This generates a demand curve showing how willingness to pay varies across the user population.
We estimate the median consumer surplus using a log-linear regression approach. We fit a linear regression to the relationship between the natural logarithm of price and the proportion of users willing to pay, then calculate the price at which 50% of users would pay — representing the median willingness to pay.
Since TikTok is free to use, the full median willingness to pay represents the consumer surplus. We annualise the monthly figure to derive annual consumer surplus per user.
To calculate total consumer surplus across the EU, we estimate the number of adult TikTok users and multiply by the per-user surplus.
We use:
- The share of respondents who report currently using TikTok or having an account, from the same consumer survey
- Total EU-27 population from official statistics
- Age distribution data to estimate the adult (18+) population
We multiply the user share by the adult EU population to estimate total users, then multiply by the annual consumer surplus per user to derive total consumer surplus in euros.
Impact of TikTok on consumer spending in the EU
We estimate the incremental consumer spending in tourism, retail, hospitality, and services driven by discovery on TikTok — spending that would not have occurred without the platform.
We first estimate the share of the adult EU population that has undertaken specific activities (such as visiting a destination, trying a restaurant, or purchasing a product) after discovering them on TikTok. We draw on a nationally representative consumer survey conducted by Public First across EU countries which asks TikTok users whether they have ever done specific activities after seeing or hearing about them on TikTok. We apply demographic weights to ensure results are representative of the adult population.
For each activity category, we estimate the average amount spent by asking respondents how much they spent the last time they undertook the activity after discovering it on TikTok. We create weighted averages to derive representative spending figures for each activity type.
Not all spending on TikTok-discovered activities is incremental — some would have occurred anyway. We adjust for this by asking respondents whether they would have undertaken the activity if they had not discovered it on TikTok. We assign additionality weights based on responses and apply the weighted average additionality rate for each activity to isolate spending that is genuinely incremental.
To calculate total incremental spending, we combine the above components and scale to the EU adult population.
We use:
- EU-27 population and age distribution data to estimate the adult (18+) population
- Historical TikTok user growth data to estimate the average tenure of TikTok accounts, allowing us to annualise lifetime spending figures
- An adjustment for the share of holiday spending that occurs within the EU (for tourism-related categories)
For each activity, we multiply the number of people who have done it by the average spending and the additionality rate, then divide by the average account age to derive annual incremental spending. We sum across all activity categories to derive total incremental consumer spending driven by TikTok.
Consumer savings from TikTok-enabled market access
We estimate the savings EU consumers enjoy through TikTok-enabled price comparison and market access, and the additional consumer spending and economic activity these savings support.
Consumer savings from price comparison
To estimate consumer savings, we calculate the value of reduced prices that consumers enjoy when they can compare offerings from multiple vendors via TikTok, rather than purchasing from a single retailer. We do this by multiplying TikTok use rates with the price savings from increased competition and baseline household consumption expenditure on consumer goods.
We use:
- TikTok monthly active users in the EU-27 from TikTok’s official DSA Transparency Report, divided by EU-27 population from Eurostat to derive the use rate
- Price savings derived from academic literature on online price comparison: the increase in vendors accessible via digital platforms (from Montgomery et al., 2004) multiplied by the price reduction per additional vendor (from Baye, Morgan & Scholten, 2004)
- EU household final consumption expenditure in TikTok-adjacent categories from Eurostat, including clothing, household furnishings, information and communication, recreation, food services, accommodation, and personal care
Additional consumer spending
Consumer savings increase disposable income, a portion of which is spent on additional consumption. We estimate the value of this additional spending by multiplying consumer savings by the marginal propensity to consume, derived from Eurostat’s estimate of the EU household savings rate.
Additional gross value added
Additional consumer spending generates economic activity measured as gross value added (GVA). We convert additional consumption to GVA by applying the ratio of GVA to final consumption in the EU economy, from Eurostat national accounts data.
Impact of TikTok on the EU music industry
We estimate the additional royalties and revenues generated for EU artists through TikTok-driven music discovery, covering streaming, live music, and merchandise.
We first estimate the total size of music-related spending in the EU across three categories: streaming, live music, and merchandise.
We use:
- EU-27 recorded music revenues from IFPI’s Music in the EU 2025 report, with streaming revenues estimated using the global streaming share of recorded music (69%)
- UK live music spending as a benchmark, scaled to the EU using the ratio of EU-27 to UK recorded music market size
- Global music merchandise market data, allocated to the EU using the EU’s share of global recorded music revenues
To estimate TikTok’s incremental impact on music spending, we use a counterfactual analysis comparing TikTok users to non-users, drawing on research from Luminate showing that TikTok users spend 27% more on music-related purchases than non-users. We combine this with TikTok’s penetration rate among EU adults, derived from a nationally representative consumer survey conducted by Public First to estimate the additional spending attributable to TikTok.
We then estimate the share of this incremental spending that accrues to EU artists using IFPI data on track popularity across EU countries by artist origin.
Impact of TikTok on learning in the EU
We estimate the volume and economic value of informal learning enabled by educational and skills-based content on TikTok across the EU.
Estimating learning hours
We use our nationally representative survey of EU consumers to estimate total annual hours of informal learning on TikTok, drawing on respondents reporting the amount of time they spend in an average week watching skills-based content on TikTok. We apply demographic weights and population data for the EU-27 to ensure results are representative of the EU adult population.
To adjust for differences in TikTok usage across EU countries, we apply a scaling factor based on TikTok penetration rates, drawing on monthly active user counts for all 27 EU member states from TikTok’s DSA Transparency Report and population-weighted penetration rates in our survey.
Monetising learning time
We calculate average weekly hours of informal learning per person separately for employed and non-employed respondents, annualising and aggregating these to the EU-27 level using population weights and relative employment rates. We convert total learning hours into an estimate of productivity-enhancing knowledge value using estimates for the monetary value employed and non-employed time.
We use:
- For employed respondents: EU average hourly labour cost as a proxy for the economic value of productive time
- For non-employed respondents: the opportunity cost of time derived from transport economics valuations
- A conversion factor reflecting the share of informal learning time that translates into productivity-enhancing knowledge, based on academic evidence on the effectiveness of informal learning
Impact of TikTok on SME economic activity in the EU
We estimate the incremental direct, indirect, and induced economic output generated by advertising on TikTok for small and medium-sized enterprises (SMEs) in the EU.
We estimate the direct economic impact of advertising on of TikTok for SMEs by scaling the overall economic impact of advertising on TikTok (see Economic Impact of Advertising on TikTok App methodology) to account for the SME share of social media-related business activity.
We calculate the SME share by comparing SME revenue to total enterprise revenue, weighted by respective social media use rates. We use:
- Enterprise revenue data from Eurostat structural business statistics, broken down by enterprise size class
- Eurostat data on the share of enterprises using social media for marketing, by size class, to weight the SME share of social media-related activity
Direct economic activity generates additional effects through supply chains (indirect effects) and household spending from wages (induced effects). We apply input-output modelling techniques to the Eurostat Supply and Use tables to estimate Type II multipliers (which adjust for indirect and induced effects) for each sector of the EU economy. We aggregate this to an EU-wide Type II multiplier by taking an average, weighted by each industry’s output and use of social media for marketing.
We multiply our estimate for direct SME impact by our Type II multiplier to estimate the overall economic impact of advertising on the TikTok app for SME output.
Impact of TikTok on the EU creative economy
We estimate the value added and employment supported by TikTok’s creative economy in the EU, including content creators, influencers, and production services.
We define TikTok’s potential creative economy as belonging to two industry groupings that capture the core professional activities of content creators and the advertising services that monetise content on digital platforms:
- Motion picture, video and television programme production; sound recording and music publishing; programming and broadcasting (NACE J59-J60)
- Advertising and market research services (NACE M73)
We apply input-output modelling techniques to the Eurostat Supply and Use tables to estimate the total value added from these industries, projecting values to 2025 using GDP growth forecasts from the IMF. This approach captures both the direct economic activity in the creative economy as well as indirect and induced effects.
To isolate TikTok’s contribution to the creative economy, we apply platform-specific shares reflecting TikTok’s share in digital video advertising and content creation.
We estimate TikTok’s share by:
- Calculating the digital share of video-related advertising spending using IAB Europe data on digital and display advertising
- Estimating TikTok’s EU advertising revenue from TikTok’s UK entity filings (Companies House) and reported EU revenue shares
- Calculating TikTok’s share of the EU digital video advertising market
We apply this TikTok share to the overall GVA contribution of the creative economy to estimate the impact attributable to TikTok-enabled activity. We draw on employment by industry data from the Eurostat Labour Force Survey to additionally express this activity in terms of jobs supported.