Shoptalk 2024   //   March 20, 2024

At Shoptalk, TikTok makes a pitch to retailers amid proposed ban

Inside the windowless, climate-controlled expanse of the Shoptalk Exhibit Hall, TikTok hardly seemed like a platform in the crosshairs of the U.S. government. Rather, it posted up in a large and centrally-located exhibit space with plush chairs, hot pink signage, neon totes and a packed schedule of brands looking to hear about its ad platform potential.

TikTok was one of over 900 exhibitors at Shoptalk, a convening of thousands of digital commerce and retail professionals held in Las Vegas every year. But it was arguably one of the highest-profile, given the uncertainty around its future as an entity doing business in the United States.

The U.S. House of Representatives on March 13 passed legislation that would force the service off of app platforms unless TikTok’s owner, ByteDance, sells the operation.Around 150 million active users in the U.S. scroll through each month, but the “TikTok ban” received bipartisan support amid concerns about influence from the Chinese government. It’s unclear how the Senate will vote, but President Biden has signaled he’ll sign the bill and e-commerce interests are already mulling what to doif it goes through.

But under the fluorescents and central air conditioning of a Las Vegas conference, TikTok used Shoptalk as a means to shore up its relationships with brands and e-commerce professionals. On Tuesday, TikTok announced the launch of new ad products. Shop Ads will allow merchants to advertise directly in the TikTok Shop, in the hopes of providing a shortcut to sales there. And its Video Shopping Ads, previously in pilot, will launch globally with some new upgrades — like carousels, showing up in search and integrating with Shopify for easier management.

Modern Retail spoke with global head of product strategy Ray Cao about the services and how they differentiate from existing products.

“We’re looking to drive ROAS,” he said. “The intention for us is definitely go down to the funnel, and to help advertisers understand that when we say that we’re empowering you to do commerce everywhere, it is not only for eyeballs, it is for the button that they click to purchase.”

TikTok would not officially comment on the proposal to Modern Retail but has said in a public statement that it threatens as many as 5 million small businesses that use the platform. Meanwhile, TikTok is urging its users to call their Senator to voice opposition to the proposal.

This conversation has been edited for length and clarity.

What challenges are the new ad products trying to solve for retailers?
It’s all tied back to our vision for commerce. We know that TikTok is driving commerce. We know that our user demands that. How do we help other merchants and advertisers to do so? That’s basically our mission.

As of today, we’re able to [globally] debut our product called Video Shopping Ads. That is a product of in-feed video or carousel format. You’re able to leverage that to really demonstrate what is your product and also provide information alongside the product. And then enable the user to fully experience [the product], especially in a video format, where you’re actually able to demonstrate the dress or the product — and also provide a product card to click on, so the user will directly go the webpage on the [brand’s] website.

[TikTok Shop] was launched about this time last year in the U.S. and a lot of advertisers became merchants. They consider us a channel now, rather than a media platform only. With that, I think that our TikTok merchants demand new ways to be discovered.

So, we also launched TikTok Shop ads to really cater to their needs, which is basically the closed-loop version of . But it is actually trying to empower commerce everywhere on this platform.

Do you ever see TikTok becoming a place for brands to exclusively do business? Or is it something that will develop alongside other online operations?
I do think that you will see more and more early adopters [who] become really obsessed with the power of TikTok Shop… The first-mover benefits are still there. I’ve seen this multiple times with other platforms. A lot of platforms come [up] and then they bring a batch of entrepreneurs up together with them. I hope that we have the luxury — and also the honor — to bring our own version of that as well.

When you’re thinking about TikTok as a business partner, you don’t really think about it as ‘I want to be promoting my product on a platform.’ You’re really thinking about ‘What is my merchant strategy on the platform?’ [We care about] not only about getting your advertising dollar [but] about is your total GMV. And that it builds a really trusting collaboration model between us at an [emotional level] rather than ‘Oh, you guys just take a commission.’

We hear a lot about consumer advertising fatigue. What makes TikTok shop different?
We always say that getting the ads on TikTok could be a very different thing in a lot of ways because you’ll have to work with creators, and you may actually be working with affiliates. The ad content itself is [based in] expression, rather than ‘Hey, I want to sell you that product.’ It is about showing you what it is.

That’s the power of TikTok Shop experiences. It is not about selling you something. It’s about showing you something that you really like. And part of that is discovery. Part of that is really entertaining, because it’s fun to watch.

What makes a really great video ad on TikTok, one that someone’s not just going to scroll past?
There’s no secret sauce there. And you have to figure out what is actually the best way for your brand. A lot of times, you’ll see that people just demonstrate [how they use a product]; a little thing that my wife bought for a washing machine was literally people teaching you how to use that product in a very simple way.

The best ads are not necessarily created by an agency, the best ad is created by a lot of regular human beings.