TikTok pitches new ad formats as it faces US ban threat

TikTok is looking to ramp up commerce on the platform, including integrating Video Shopping Ads into its still-developing search ads, as the company focuses on its product roadmap even amid renewed concerns over a potential ban in the U.S. At Shoptalk today, TikTok announced a string of updates to commerce advertising and shopping portions of the app, a core part of its overall business strategy. TikTok sent executives, including Ray Cao, managing director, global head of product strategy and operations, to the prominent industry conference in Las Vegas that attracts retailers, shopper marketing and tech platforms, including Google, Amazon, Meta, Walmart and Shopify. TikTok is using Shoptalk, which is taking place this week, to release new ways to place Shop Ads within TikTok Shop, the merchant tab within the app. Until now, Shop Ads appeared in the main TikTok feed, but now will surface in the shop tab, TikTok announced. TikTok also upgraded Video Shopping Ads by letting retailers run them in search results, part of an evolution of how TikTok is trying to capture more search advertising dollars as more consumers use the app to discover products. TikTok has also made Video Shopping Ads more interactive by integrating them with retailers’ catalogs to display a wider range of products. TikTok’s goal is “creating the most seamless shopping experience possible for users to discover and purchase products,” Cao said in an email to Ad Age before Shoptalk. “We’re focused on maximizing discoverability for our advertising campaigns.” TikTok has been trying to stand up the e-commerce portion of its U.S. business, especially since it launched TikTok Shop widely in the U.S. last year. The app has been encouraging brands and creators to help promote products that lead directly to sales in TikTok Shop. Last month, Coca-Cola dabbled in TikTok Shop by launching a limited-edition flavor only available through the app. The strategy is to parlay TikTok’s viral appeal into a shopping engine. For brands that don’t sell directly on TikTok Shop, TikTok also has the e-commerce ads for retail partners, including Walmart, to drive consumers off TikTok to complete sales. TikTok headed to Shoptalk at a sensitive moment, a week after the U.S. House of Representatives advanced a bill that could force the app to sell its U.S. holdings. Congress raised concerns about TikTok’s ownership ties to Chinese-based ByteDance. U.S. lawmakers and intelligence officials have said TikTok represents a threat to Americans’ data, and that its powerful algorithm could shape the public discourse in dangerous ways. TikTok has been in this position before, most recently last year when its CEO Shou Chew testified before Congress while lawmakers were considering legislative action against the app. In 2020, then-President Donald Trump tried to force TikTok to sell to a U.S. entity. Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here Last week, Cao spoke with Ad Age about how the app is in a good position with advertising partners, which makes it easier to communicate with them during this latest moment of peril. In contrast to 2020, TikTok today is a known quantity among its biggest partners, and it has developed closer relationships with them, Cao told Ad Age. TikTok also has veterans within the company who are familiar with this type of scrutiny, so they are prepared to weather the current political climate, Cao said. TikTok’s leadership has also worked on addressing the concerns of U.S. lawmakers by taking steps to lock down its data, so it can’t be transferred outside the U.S. It’s also talked with advertisers and other stakeholders extensively about its data policies and provided more transparency about its algorithm. TikTok’s relationships will be on display at Shoptalk this week, where it is expected to host a session with Walmart to talk about shoppable video and mobile commerce. Walmart has been a major partner in TikTok’s retail strategy, among others, Cao said. Also read: Walmart debuts shoppable holiday series on TikTok TikTok’s rivals, including Meta, Google and Amazon, also are at the event. Meta released artificial intelligence-powered upgrades to its Advantage+ ad platform ahead of Shoptalk. Last week, TikTok released a study to bolster its case that it is a net benefit for the U.S. economy, including a stat that more than 7 million businesses use the app. TikTok aims to increase merchants that sell directly on the app but also will facilitate off-site retail through its ad products. Video Shopping Ads, for instance, are designed to send consumers off the app. Their inclusion in search results could expand that off-site behavior too, giving TikTok another channel to compete with Google and Amazon in shopping searches. “Video Shopping Ads are a core performance commerce solution,” Cao said in an email, adding that the format “drives sales on a brand's e-commerce website—connecting specific products from a brand's catalog to find new customers or interested buyers.” On Monday, TikTok released new internal data about its effect on online and offline shopping. For instance, during Black Friday and Cyber Monday shopping, “over 5 million new customers made a purchase on TikTok Shop,” TikTok said in a press release.

TikTok pitches new ad formats as it faces US ban threat

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