Tiktok Shop gives advertisers control

Tiktok is tweaking e-commerce advertisers towards AI. This is the first to pull in the future where algorithms, not marketers, call shots.

Platform guidelines tell Business Insider, starting September 1st, brands wishing to pay to promote products for sale at Tiktok shops must use a tool called GMV Max. Introduced in 2024, Tiktok Tool uses AI algorithms to determine how to get the most profitable advertisers.

Merchants choose products at the Tiktok shop they want to promote, set budgets and target return on investment, and take over Tiktok's algorithm. Decide how to spend increasing your existing ads or spinning up new ads to maximize your sales.

The move from Tiktok's standard ad manager to GMV Max has ruffled feathers at Adland as it forces the brand to abandon some strategic controls to the algorithm. It has also become difficult for brands to measure Tiktok ad performance beyond the Tiktok shop closure ecosystem, ad buyers said.

“Tiktok's GMV Max asks us to put a lot of trust in our platform,” said Dwight Bush, director of Paid Socile, Marketing Agency Doner Partners Network.

Tiktok's strategy echoes similar movements between Google and Meta. However, Tiktok is not an option and is mandatory on a quick timeline. Larger tech platforms are increasingly promoting the use of AI-powered tools that create ads, and AI-powered tools that determine which users to target and which ads to place.

“That's the direction the entire industry is moving,” said Neil Baker, media director at digital advertising agency Tug. Tiktok offers other AI tools suites for advertisers, including the option to create ads using AI-generated avatars. It also offers Smart+, an AI tool similar to GMV Max. It automates and generates campaigns to achieve your goals, such as video views and website visits.

Automated tools are the boon of a big tech platform. The tech giant says it saves advertisers time and drives performance. Some marketers say it's a black box that strips control. These algorithms don't always provide a complete picture of which ads worked or how they were displayed, making it difficult for marketers to use their data to guide a wide range of strategies. Advertisers are also wary of the automation of many aspects of marketing that can significantly disrupt their business.

Related Stories

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

While five ad buyers accept to Business Insider that the industry is moving in this direction, we feel that the new Tiktok delegation is premature as GMV Max has not yet been proven effective for all advertisers.

The push to GMV Max has plagued some big brands, but smaller store sellers are adopting it warmer, said a partner at the Tiktok store's agency.

Brands don't care much about tracking the platform directly from consumers who drive the majority of sales at Tiktok Shop. The product includes a guarantee that retailers will appreciate. Tiktok, for example, was designed to create a feature called “ROI Protection” within GMV MAX to ensure that advertisers drive outcomes. Tiktok automatically issues AD credits if the return on investment for a particular campaign is below 90% of the target chosen by the advertiser.

Katy Hallam, client services director at Tiktok Commerce Specialist Agency Onyx, said the tool is a “game changer” for some merchants' sales and timesavers.

Why AI Blackbox makes some big brands feel uneasy

A spokesperson with Business Insider said some of the large advertisers they work with were worried about the forced shift at Tiktok Shop. They said that Tiktok had already moved its original deadline from July to September after complaints from the advertising community.

“There's more hesitation about common names,” said Jack Johnston, head of social innovation at Tinuti, ad agency. “They have a really big creative and media strategy. They want to have control over everything.”

An ad agency executive said Tiktok allowed the addition Extend to some of the clients who were unhappy with the change.

Ad buyers say GMV Max has no key insights that marketers rely on in areas such as geography, audience and influencer data to shape campaigns outside of Tiktok.

“It's very frustrating because you can't necessarily determine what's working and what's not,” says Bush of Doner Partners Network.

Bush said the agency provided the feedback to Tiktok but felt it was “really uninfluenced.”

According to company documents seen by Business Insider, Tiktok praises all shop purchases for the tool during the GMV Max campaign, even if consumers have never seen the ads.

A Tiktok spokesperson said the company offers both first and third party measurement solutions and partners that help advertisers measure on and off-platform sales. They did not dispute the specific measurement complaints made by ad buyers, but pointed to a Tiktok Business Help Center page that details the metrics provided by GMV MAX. This page states that some metrics may not be available to all advertisers yet.

Tiktok Shop faces challenges when begging for big brands

The pushback for GMV Max was one of several obstacles that Tiktok shops faced when they tried to plead for a bigger brand, a current and former Tiktok employee said.

While a variety of big brands like Anker, Maybelline, Philips, Garnier and Crocs have embraced the platform, Tiktok has spent time selling smaller sellers. Tiktok said in June that over a third of all Tiktok shops purchases in the US each month in 2024 went to SMEs, with 171,000 local and small businesses opening Tiktok shops around the world.

Finding the right team within a large company to market your Tiktok shop can be difficult, as current Tiktok shop staff blends social media and e-commerce features that the platform may fall into different divisions of the brand.

Brands may also complain about “Dupée” or fake versions of the product. And it could be difficult to sell a team of big brands on tasks like hosting Livestream Sell-A-Thons when the return on investment may not halt, staff said.