6th November 2020
POV: TikTok Partners with Shopify and Finalises Licensing Deal with Sony
Background:
TikTok has announced two new partnerships in the last week. The first is a global partnership with e-commerce platform Shopify to help further its social commerce offering. The second is a new music licensing agreement with Sony Music Entertainment.
Details and Implications:
TikTok is continuing its social commerce push by partnering with ecommerce platform Shopify to make it easier for merchants to reach the TikTok audience and drive sales. The agreement will allow merchants to create, run and optimize their campaigns and access the TikTok for Business Ads Manager directly from the Shopify dashboard by installing the new TikTok channel from the Shopify App Store.
The ad tools are designed to enable merchants to create shareable content that turns their products into in-feed video ads and they will be able to target audiences across gender, age, behaviour and category and track campaign performance. TikTok is offering merchants $300 in ad credits to get started with their first campaign.
The deal is also set to expand to include other in-app shopping features in the future as TikTok said it plans to start testing new in-app features that will make it easier for users to discover Shopify merchants and their products. The partnership is a key strategic move from TikTok as it ramps up its social commerce capabilities and capitalizes on the huge consumer shift to digital shopping.
The TikTok channel for Shopify merchants is available in the US now and is planned to roll out to elsewhere in North America, Europe and Southeast Asia next year.
This week TikTok also confirmed that it had reached a licensing deal with Sony Music Entertainment to allow it to continue to offer songs from Sony artists for use by creators on the platform. TikTok has been working on new deals with the major record groups since its popularity exploded to ensure that it doesn’t lose some of the world’s top songs and this appears to be the first deal that it has locked down.
TikTok hasn’t provided any further details but said it would work with Sony to support “greater levels of TikTok user personalization and creativity” and “drive new and forward-looking opportunities for fan engagement with SME’s artists and music.”
The deal will be beneficial for both parties as TikTok has a proven ability to push tracks up the charts and break newer artists. Nielson said that last year no other emerging app had helped break more songs than TikTok.
Summary:
As more focus is put onto commerce in social media, the TikTok-Shopify partnership timing is key for a successful upcoming holiday shopping season. Competition for ad dollars is fierce and the more that a social platform can prove that it drives sales, the more brands will be willing to spend. Directly connecting the buy to the platform is the most direct way of showing its efficacy in this respect. The platform’s deal to retain access to Sony music is sure to help keep users engaged on the platform.