As TikTok rolls out Smart+, marketers grapple with AI’s advertising puzzle

With each new platform unveiling its version of this advertising magic, that acceptance solidifies just a little more. TikTok is the latest to join the spectacle, launching its Smart+ tool earlier this month. While it raised some eyebrows among marketers, those concerns were quickly overshadowed by the promise of making advertising on TikTok significantly easier – and better, of course. 

Lauren Beerling, director of performance media, Collective Measures, summed it up: “The continued popularity of using these tools comes with the fact that the performance really is good on this kind of inventory. While it’s hard to trust, it’s also hard to argue with the incremental revenue these tools provide.”

Beerling’s comments get to the crux of why tools like this have become widely adopted by marketers and subsequently lucrative for platforms en masse. Ultimately, it’s a commercial decision: Marketers are willing to hand over the reins to a platform to manage their budgets because they’ve calculated that doing so will yield a higher return than if they managed it themselves – fully aware that some of that investment may go to waste.

That’s because these AI models are programmed to absorb as much of an advertiser’s spend as possible – so long as performance targets are being met. 

This, however, puts pressure on platforms to balance high- and low-value inventory, making it a challenge to exhaust advertiser budgets while still delivering the necessary results. Which is where the wastage can creep in. The more these tools optimize, the more likely budgets are stretched across inventory that might not be premium, leading to inefficiencies that inflate costs for questionable returns.

Take Google’s Performance Max (Pmax) for example. Last year, ad research firm Adalytics found that Pmax’s algorithm was placing ads from adult brands on YouTube channels labeled “made for kids.” Because Pmax doesn’t offer granular placement reports, advertisers had no way to audit, let alone fix, the misalignment. 

Meta’s Advantage+ hasn’t been much better. According to The Verge, the tool misfired earlier this year, burning through advertiser budgets without delivering meaningful results.

It’s a messy trade-off: flashy results with hidden inefficiencies. And as AI tightens its grip on the ad game, marketers may find themselves squinting at the spotlight, wondering if they’re still in control – or just another part of the act.

“Concerns around AI black box models appear to be quieter, but they are nowhere near resolved,” said Josh Rosen, president of Hotspex Media. “Advertisers using platforms with these models may have compromised on transparency in favor of audience reach, but the demand for clarity and accountability is still strong. I think black box models are unlikely to be sustainable in the long term.”

It’s a hard pill to swallow, given the platforms’ penchant for secrecy, but there are a few glimmers of hope.

Platforms are starting to lift the curtain – if only a little. Earlier this year, Google gave marketers more control over where ads in its Performance Max tool appear. And TikTok followed suit last week, tweaking its Smart+ solution to let advertisers pick specific features instead of using the entire suite.

It’s far from a grand reveal, but it’s a step away from the blind trust marketers have been expected to put in these tools – offering a glimpse of what a more balanced partnership could look like. After all, while the show must go on, it doesn’t hurt for marketers to learn a few more tricks before they find themselves becoming the ones getting played.

As Courtney Shaw, vp of social media solutions at Basis Technologies, explained: “The benefits of these tools are increased speed and efficiency in managing a campaign as well as generating new audiences or new creative versions to aid in a more personalized customer experience, but they do not take the place of critical thinking, cross-platform learnings or deeper audience insights gleaned from what the algorithm serves.”

Whether it’s TikTok’s Smart+, Google’s Performance Max, or any other AI-led solution, marketers can’t afford to let transparency take a back seat. They need to push for clarity, invest in independent oversight, and maintain a healthy dose of skepticism if they want to avoid unnecessary ad spend and inefficiencies. Because when the curtain is pulled back, any gaps in oversight are where the bad actors thrive – exploiting trust and draining ad budgets for their own gain.

Especially, since it’s clear that this is where media buying is headed on platforms. Smart+ was just the latest in a long line of similar and very lucrative moves.