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TikTok’s direct response capabilities don’t resonate with performance marketers — yet

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For direct response marketers hoping to find the answers to Meta’s problems, many of which stem from Apple’s crippling anti-tracking update, TikTok does not hold the answer — at least for now — performance marketers say. 

“A lot of people go to TikTok because it’s the other paid social thing,” said Duane Brown, founder and head of strategy at Take Some Risk, a performance marketing agency. “Even though that probably won’t be the best place they could spend money.”

Over the last two years, the short-form video app has managed to become social media’s golden child, eating up a bigger share of ad dollars as it grows further down the marketing funnel. TikTok has gobbled up its fair share of brand awareness dollars, but started pushing for direct response dollars after unveiling a full suite of performance products at its annual product summit in early October. The suite includes an automation tool and shopping ads, which performance marketers say is a step in the right direction.

Per performance marketers, TikTok’s direct response capabilities just aren’t up to par yet, meaning ad dollars geared toward generating sales still go further with Meta, Google and Amazon. “Those are the three biggest ad platforms for a reason from an ad revenue perspective, because people will go there and click on ads and buy stuff. That just doesn’t happen on TikTok,” Brown said. 

Not apples-to-apples

Comparing Meta and TikTok when it comes to direct response capabilities isn’t an apples-to-apples comparison, said Katya Constantine, CEO of performance marketing shop DigiShop Media. “The fact that [TikTok has] been able to marry the organic and paid in a [pay to play] type of environment tells you there’s probably more opportunity there. But it’s slightly different from what a traditional paid platform looks like,” Constantine said.

TikTok’s current state of growth could be compared to the early days of Snapchat and Pinterest, in which the platforms went through trial and error before making direct response marketing turnkey for advertisers, Constantine said. In this case, it will take TikTok time to find its footing.

As a direct response channel, TikTok is still in the experimental phase for agency Gupta Media. The team has weekly calls with the short-form video app to learn about new ad products. But when it comes to ad dollars, only 30% of an e-commerce client’s budget is hypothetically dedicated to TikTok, paling in comparison to an average of 50% for Meta products, Gupta Media agency account director Sara Noel said.

“Their pixel is newer,” Noel said of TikTok’s tracking capabilities. “They are still figuring out how to improve match rates and how to improve their optimization algorithms to optimize towards those people likely to purchase.”

Zach Stuck, founder of performance marketing agency Homestead Studio, said the agency is still spending 80% of client ad budgets on Facebook and Instagram. The agency has increased spend outside of Meta products to Google and YouTube more so than TikTok because, according to Stuck, “TikTok ads are overhyped for the majority of brands.”

According to Digiday+ Research, 51% of agencies reported only dedicating a small portion of their clients’ marketing budgets to TikTok. And 25% reported not spending any of their clients’ budgets on the platform.

Since data privacy crackdowns started last year, advertisers have been grasping at straws, desperate to find data and recreate Meta’s audience targeting capabilities. “Some people are frustrated with Facebook and its ad manager, which is not Facebook’s fault. This is Apple’s update not delivering the data they’re expected to get and they’re frustrated,” Brown noted.

Vying for performance dollars

However, it’s not that TikTok isn’t trying. The social media platform earlier this month unveiled a host of new performance marketing tools at its global product summit TikTok World. The new tools include shopping ads, updates to the creator marketplace and an automation tool. There’s also a new feature called Focused View, in which brands are only required to pay if people actually watch their ads. And while it’s not actually a TikTok offering, several brands have found a direct response avenue to the platform by way of the TikTok Made Me Buy It phenomenon, where a product’s sales skyrocket after going viral on the app.

According to TikTok’s Jiayi (Ray) Cao, global head of monetization product strategy and operations, the platform is looking to help brands “shorten the distance between discovery and action.” It’s a move that could pull more performance ad dollars in, and it’s a key strategy after TikTok saw its operating losses “more than triple last year to above $7 billion,” The Wall Street Journal reported.

The push for TikTok as a line item in every media mix may stem from advertisers’ FOMO (fear of missing out), according to Brown. “Especially going into recession, brands need to really make sure they focus their time and energy and not try to just be everywhere,” he added. “Because you need to put out a lot of content in the sense of ads to make TikTok work, and if you can’t do that at a reasonable cadence, then you probably shouldn’t be there yet.”

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