7th May 2020
POV: TikTok’s CTA Creator Ads
Background:
TikTok is testing a new advertising format that will allow advertisers to use call-to-action buttons such as ‘shop now’ within influencer content.
Details and Implications:
TikTok’s new call-to-action (CTA) creator ads will place ‘shop now’ buttons among influencer content. There is currently a ‘shop now’ button available to all advertisers, however, the new CTA button differs as it will be available within influencer feeds, not just in the ads that appear in the ‘for you’ feed and ‘follower’ feed. The format is currently only in early testing stages and only available to a select number of advertisers.
The partnership between influencers and TikTok take the form of a revenue-sharing model, although it is not yet clear what the revenue split will be – reports suggest a 20/80 split in TikTok’s favour.
The innovation allows TikTok to tap into revenue that would normally be shared directly between the advertiser and the influencer and provides a platform model for this to happen. How TikTok rolls out this new format will determine how content curators react to the change. At the moment, influencers earn money through brand partnerships in the same way they do on Instagram but this will allow TikTok to capitalise on that and move towards a revenue model that is similar to YouTube, where ad revenue from the advertisers is split between the platform and the channel operator.
This new ad format is the latest innovation from TikTok as it strives to develop more revenue streams and retain its popularity with users. In order to keep creators on its app, TikTok needs to give them monetisation incentives. Also, by giving influencers/creators more ways to monetise through a revenue sharing scheme like this, TikTok encourages creators to develop high-quality content which then drives more audience engagement. The key is the balance between the ease of use of the platform approach and the revenue it brings to influencers, in comparison with the direct deals they previously held with brands.
The new ad format means that TikTokers will be able to directly shop for brand’s products through influencer content, which is great for those brands and brings TikTok into line with similar click to shop offers on other short form content platforms like Snap and Instagram. It will blend social influencer content with commerce as more and more consumers become comfortable with purchasing on their phones.
TikTok has become increasingly popular over the last year but it is still early days for its monetisation and advertising options. Last year, TikTok rolled out the option for users to link shops in their bios and launched a Creator Marketplace which helps brands find influencers to work with.
Summary:
TikTok’s new CTA ad format is in the early stages of testing but could be a big step forward for the platform’s monetisation efforts. For advertisers it opens up the fast-growing platform’s users and for content creators provides a platform-based approach to monetising their content.