Over the past few years, TikTok has become a major force in advertising. In particular, its unbeatable algorithm and widespread push for user-generated content (UGC) have helped the video-sharing social platform to engage consumers and maintain success in driving online purchases, especially for small to medium-sized brands.
Now, the ByteDance-owned company is expanding its focus on e-commerce through the introduction of TikTok Shop, a new one-stop solution for brands that want to showcase and sell their products directly in the app, while allowing TikTok to take care of product discovery, product details, checkout, and post-payment activity.
To gain some insight on the shift, MediaPost talked with Thomas Ma, co-founder and managing director of content marketing agency Sapphire Studios and creative marketing partner at TikTok.
Here, Ma discusses current UGC trends, the dominance of TikTok in the social sphere, and how brands can make use of the app's e-commerce push.
This interview has been modified for concision.
MP: When did brands begin to double down on UGC content?
TM: When we started, everybody would say UGC was unacceptable. Think of a brand like HP that would say they're old school -- they want HD videos because they look more professional.
TikTok changed that and the content has evolved. That's just how consumers buy things now, and until your brand adjusts, you'll pay a higher CPM.
MP: Did your company see quick success?
TM: No. We saw success with a small handful of clients, but at first I was approaching brands and saying, "Hey, we'll make your content for free. If we convert, then we work together."
Thankfully, TikTok had one popular case study with the soap company Dr. Squatch, which gave us a chance to be part of TikTok's partner program. The platform played matchmaker between us and brands. We just had to deliver content that made money.
MP: How might brands be affected by TikTok's push toward in-app and live-stream shopping?
TM: TikTok Shop encourages brands to post native content. Right now, smaller brands will benefit more from this than the Amazons of the world. If you're new and you have a cool DIY product, TikTok wants good case studies.
Whatever the algorithm is, it's very friendly for products that get high engagement. And now customers can swipe up, put in their credit card and buy something right from the post. It's a new way for emerging brands, but more importantly, people with personalities who tie themselves to products.
MP: Will users begin to question the authenticity of the platform and its creators?
TM: I feel like the consumers can answer that. If you're not selling and you see your engagement dip, that speaks for itself.
I follow a chef who sells pots and pans when using them on his TikTok live-streams, and he sells them immediately. His consumers love his content, so it makes sense. But if he suddenly wanted to sell an iPhone phone case, that just wouldn't feel authentic.
MP: What products have been most successful on TikTok Shop?
TM: Feminine products, like makeup -- that's a good one if you're a beauty blogger. Jewelry can also be good, but it doesn't go a long way because you can't prolong a demonstration.
Even if it's an e-commerce brand, creators have to show themselves trying on different outfits. Unless they're showing Lulu Lemon or Athleta –– trying on simple athletic clothes might not go as far. Which is why cooking and makeup tutorials are going to have higher watch and engagement rates.
MP: How has TikTok evolved in-app shopping?
TM: It's a copycat world. They're just copying what works in China. I think it's just dependent on how you put out the content.
MP: Will it be as popular in the U.S. as it is in China?
TM: I'm not doubtful. I think it should work with the right content strategy. But again, things are always evolving. You see AI in marketing right now. Most people probably never thought they would use AI to make revenue.
For example, we use ElevenLabs to integrate voiceovers. If someone messes up a line, we can replicate that voice and make little fixes instead of going back to the creator and rerecording.
MP: Do you think TikTok is the superior UGC platform for brands?
TM: I would say TikTok is because they gave us the chance to showcase our work, but we are fully open when brands ask to do UGC on other platforms. We take on those opportunities.
Instagram Reels are coming close. I also think X has the potential to make a mark. I'm seeing creators getting paid more on X, which means they will make more content on that platform, which means more eyeballs will go there to watch that content.
MP: You don't think X's brand safety issues will dissuade advertisers?
TM: I think it's still worth it, because Elon Musk is one of the greatest marketers. Even though he does things that aren't great -- and I obviously don't agree with everything he does -- he's still in the news. The eyeballs are there and people are talking.
MP: Do you think Musk's "everything app" concept will come to fruition?
TM: I don't doubt it. I think TikTok is more advanced with helping businesses thrive because I'm in the weeds of things.
MP: How so?
TM: TikTok executes very quickly. They were one of the first to establish a designated UGC program. And now everyone's copying them. All of the ads we see now are UGC. You hardly see any HD ads, and when you do you swipe past them.
MP: Should brands be concerned about the ongoing government bans?
TM: Yes and no. You're always going to have to pivot.
MP: As TikTok continues to pursue in-app shopping, who will become its major competitors?
TM: It's hard because TikTok is so big in China -- they have the blueprint of what works. You have Instagram and X, but TikTok is rolling things out so much faster. I think TikTok is ahead of the pack in terms of global dominance. They have intense goals but that's why they're profitable.