How TikTok Is Pitching Itself As a Commerce Driver
- TikTok is creating new ad formats to get people to buy things through the app.
- A TikTok spokeswoman confirmed that the platform is testing various products for shopping ads.
- TikTok also said the U.S. advertising business grew more than 500% over the past year.
- You can find more articles on Insider’s business page.
E-commerce has skyrocketed during the pandemic, and TikTok wants to join in.
The Chinese video app is playing a bigger role with new ad formats designed to allow users to shop on the platform, according to ad buyers and recent TikTok pitch decks shared with buyers. The move comes as online shopping becomes increasingly popular and an increasing priority for advertisers.
The new ad formats that are currently being tested and expected to be launched in the first half of 2021 will allow brands to show their products, target people with products they have shown interest in, and highlight sales and promotions. The new formats include:
- Collection ads where brands can combine their product catalogs and branded videos to drive people to product landing pages.
- Dynamic product ads that automatically realign people with products based on their online behavior.
- Promo tiles that advertisers can use to add customizable sales and promotions to their in-feed ads.
- Showcase tiles that developers can use to promote products in their videos with a link to them in the tiles below for users to purchase.
A TikTok spokeswoman confirmed that the platform was testing ecommerce ads without confirming the formats above or commenting on the decks. The move follows a partnership announced last year with the Shopify e-commerce platform that allows Shopify merchants to run TikTok marketing campaigns through the Shopify dashboard.
“TikTok is at a turning point,” said Jon Severson, vice president and director of paid social networking for Mediahub. “It is no longer just a novelty for brands to try, but an attempt to become something that can lead to incremental returns and business results.”
Usage of the app increased during the pandemic as people turned to short videos for entertainment. While TikTok makes money primarily from advertising, TikTok has built shopping into the app to appeal to its millennial and Gen Z audiences. Competitors Snapchat and Instagram already have ecommerce ads.
Sandie Hawkins, US general manager for global business solutions at TikTok, said the app will become a place where people can use the hashtag #TikTokMadeMeBuyIt to discover new products, and brands like Eos go viral, increasing awareness and sales.
Overall, TikTok’s US advertising business grew by more than 500% in the past year, Hawkins said, without disclosing any information. TikTok’s U.S. revenue is projected to hit $ 500 million in 2020, the information reported.
TikTok is also going on a magic offensive with ad agencies, offering media loans to test the new formats if they spend at least $ 5,000 over a two-week period, a media manager at a holding company said.
It also expands the base of advertisers it tracks and offers them perks like credit, newsletters, and alpha and beta testing, said Penney Soon, senior director of social media at Omnicom agency Hearts & Science.
TikTok has signed contracts with the advertising companies WPP and IPG Mediabrands, which give them early access to new advertising products and connect brands with the creators on the platform.
In the pitch decks, TikTok presents itself as a place where “discovery determines buying behavior”. The slides show the audience how much time they spend on the platform and describe how brands have used it to increase awareness and sales.
This is how TikTok introduces itself to advertisers and retailers.