POV: TikTok Testing Affiliate Program

Background

TikTok has confirmed reports in Business Insider that it is testing an affiliate program for US creators as part of its Shop offering.

Details and Implications

The affiliate program is in its early stages of testing, with creators gaining the ability to earn a commission for promoting products through videos, livestreams and on their profiles. The commission rates vary and are set by the product owners, with reports suggesting these could be up to 20% of sales value.

With the growing rise of the influencer economy, affiliate income is becoming an increasing source of revenue alongside paid partnerships for influencers.

Posts that are part of an affiliate program will be labelled ‘eligible for commission’ in the same way that partnership posts are labelled ‘paid partnership’ so consumers can clearly see that the content is designed to recommend a product or service.

As well as creating posts, creators can also link to products in a separate ‘showcase’ tab on their accounts, allowing consumers to click on individual products and then complete their purchase using TikTok Shop functionality.

Early examples of the affiliate program in use that are being reported include LED lighting, notebooks or cooking utensils.

TikTok confirmed the reports with a statement: "TikTok Shop has been in testing since early November and while it's still early in the testing phase and we're continuing to invite brands and merchants to test and learn from our community, we can confirm the TikTok affiliate program is part of this test."

Social platforms have been grappling with how to convert attention into sales on their platforms with multiple trials for commerce functionality – looking to the East and the huge success of Superapps in China like WeChat that combine social and commerce into one platform.

But all has not been plain sailing. Earlier this year TikTok competitor Instagram removed the shop tab from its main navigation after complaints from users. Instagram said that it would continue to invest in the shopping experience within the Instagram app for people and businesses, but that it was refocusing on making it easier for people to “share and connect with their friends and interests”.

Summary

Commerce and media are combining. It is undeniable and inevitable. Social platforms have a huge opportunity to increase revenues outside their core ad revenues if they can successfully introduce commerce features, without damaging their core user experience. This has been hugely successful in Asia, but as yet has not taken off in the West. TikTok, through its owner ByteDance, has direct access to the learnings from Asia and so all eyes are focused on the platform to see if it can crack the model for the West. But first it will have to deal with significant data privacy issues on the platform as this week the platform was also fined £12.7m ($16m) in the UK for misusing children’s data.

Further Reading

Business Insider | Ad Exchanger | Digital Information World | Reuters | Instagram Removes Shop Tab – Mindshare POV