TikTok is planning an aggressive expansion for e-commerce in the United States, where it will face the Silicon Valley giant, Facebook.
The Chinese-owned viral video app informed advertisers about a number of new features for 2021, according to several people who saw their plans, as a tool that allows its most popular users to share product links and automatically earn commission on any sales.
“It’s old school affiliate marketing,” said a senior advertising executive, adding that video creators would be able to link to any product they liked, even if they were not formally sponsored by the brand.
TikTok, which is owned by Chinese ByteDance, also intends to launch the ability of brands to display catalogs of their products on the platform, people said.
The app is also launching “live streaming” purchases, a mobile version of television shopping channels, where users can purchase products with just a few taps after seeing them presented by TikTok stars. This follows the test of the live purchase feature with Walmart, announced last year. TikTok declined to comment.
“It looks like TikTok is about to jump [introducing a] Workspace [experience] and go straight to commerce, ”Jack Smyth, director of creative technology at Mindshare at WPP.
“Culturally, TikTok is well positioned for live broadcast commerce to capture the dissolving distinction between content and commerce because it doesn’t look as polished as other platforms,” he added.
The tools will lead TikTok, which has already announced a partnership with the e-commerce platform Shopify, to compete even more with Facebook.
Last year, Facebook introduced tools in its Instagram photo sharing app in some countries to make it easier for people to buy products, and a digital shopping channel on its main Facebook site. Meanwhile, Instagram made a copy of TikTok’s scrollable video feed called Reels.
Some advertisers have been cautious about TikTok, suggesting that their current advertising system remains a work in progress. “The product and content have not matured in a place where sophisticated advertisers really want to commit,” said an advertising agency executive.
Two people said the platform had plans this year to further develop its self-service ad platform, which allows brands to easily place their own ads online instead of manually with a sales representative, aligning themselves with larger rivals. It also intended to improve its ad targeting tools, including user tracking, people said.
The app faced serious problems in the U.S. last year, where former President Donald Trump threatened to ban it because of his Chinese property.
It is not yet clear what approach the Biden management will take towards the company, but some advertisers seem more relaxed about the app.
“The latest changes in political leadership in the U.S. have more comfortable customers on the platform,” said Kris Hoet, director of global innovation at advertising agency Foote, Cone & Belding. “Our largest offices [globally] confirmed that [many brands] were already active or thinking about activating this year. “
Last week, TikTok announced its first major deal with an advertising agency, WPP, which will give the London-based ad group early access to its latest advertising products, in a move that has boosted the stock price of WPP and angered rival social media groups, according to advertisers.
The biggest attraction of TikTok is its vast and partially unexplored audience of young users. The company says that 40 percent of people on TikTok don’t have a Facebook account and that 63 percent are not on Twitter, according to a marketer who recently launched.
“With TikTok you are looking at campaigns in the billions [of views]. Most of the time, on other platforms. . . campaigns are in the millions, ”said Karyn Spencer, marketing director for the influential marketing group Whalar.