TikTok Launches Updates on Its Ad Features

TikTok Launches Updates on Its Ad Features

Published: March 19, 2024

TikTok is making a significant push to drive in-app sales, rolling out new features and functionalities to streamline product discovery and in-app purchases Monday.

This comes at a time when the popular short-form video platform is facing renewed threats of a ban in the U.S.

On March 7, the House Energy and Commerce Committee unanimously voted to approve a bill that could force TikTok to sell or face a nationwide ban due to national security concerns.

New Shopping Ad Features

The latest update includes expanded placement options for Shop Ads, which can now appear within a dedicated TikTok Shop tab on the main feed, allowing sellers to target users who are already primed for shopping.

This extended placement allows TikTok Shop merchants to target users who are already primed for shopping within the shopping section, potentially maximizing sales conversions.

With the update, users can now more easily purchase products on live shopping, shoppable videos, product showcases, and the shop tab.

TikTok's four ways to shop "enable merchants and creators to showcase and sell products for the TikTok community to discover and purchase directly through a complete in-app experience."
4 Native Ways to Shop on TikTok | Source: TikTok U.S.

According to TikTok's internal testing, Video Shopping Ads deliver a 31.6% higher click-attributed return on ad spend (ROAS) compared to solutions that don't leverage product catalogs.

TikTok has made the feature available worldwide with a few enhancements that include:

  • Integrating Video Shopping Ads into the search tab to enable users to discover products while searching on TikTok and leverage retailers' catalogs
  • Partnering with third-party vendors like Shopify to streamline the process of campaign creation for new merchants
  • Allowing sellers to launch their first Video Shopping Ads campaign directly within Shopify using pre-populated settings and best practices
  • Introducing new creative options and formats, such as Carousel and Product Tiles, to enhance campaign performance and user experience

Based on the platform's internal data, Carousel ads have been shown to drive a double increase in CTRs and a 292% ROI for retargeting campaigns.

Product Tiles, on the other hand, have yielded a 14% increase in CTRs and a 3.2% lift in ROAS compared to standard Product Cards alone.

Research on TikTok’s Sales

Working with Nielsen (MMx), Transunion (MTA), and Foursquare, TikTok validates its strong capability to drive sales across online and offline platforms with new research showcasing how advertising and business marketing on TikTok has benefited retailers.

TikTok delivers ROAS for retailers that are between 160% and 200% higher compared to other advertising channels.

For every dollar spent advertising on TikTok, retailers see a higher ROI compared to doing it on TV, social media, and other online video channels.

TikTok's new research proves it is driving sales everhywhere.
TikTok's New Study Results | Source: TikTok U.S.

When it comes to other online video platforms, TikTok delivers online sales results that are 3.5 times better.

The "halo effect," which pertains to how online shopping ads draw foot traffic to physical stores, enables TikTok to be 38% more efficient at driving people to stores than the industry average.

With the introduction of features like the TikTok Shop, more people are choosing to shop directly within the TikTok app.

Some studies show that 84% of TikTok users find the shopping experience convenient and easy, and they feel more secure shopping on TikTok compared to other social media or video platforms.

This convenience translates to real sales, with over five million new customers making purchases on TikTok Shop during the latest Black Friday and Cyber Monday.

Additional TikTok metrics that show its growing strength in the e-commerce industry.
TikTok Metrics Proving Its Business Model's Strength | Source: TikTok U.S.

These figures TikTok’s substantial market reach and contribution to the U.S. economy may be taking a jab at policymakers that want to make the eCommerce platform choose between a sale or countrywide ban.

With these feature updates and new studies, TikTok is reassuring advertisers, partners, and merchants that it's not stopping its move to advance in the eCommerce industry and compete with other tech giants.

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