Staff Writer
Mar 6, 2023

How TikTok is embracing the advertising paradigm shift

We speak to TikTok’s general manager of global business solutions, SEA about how the platform is innovating to meet changing consumer and marketer needs.

How TikTok is embracing the advertising paradigm shift
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It’s hard to overstate the growth and cultural impact of TikTok in recent years. The video platform has been credited with changing everything from consumers’ online habits to the way we shop and how brands market themselves, with hashtags like #TikTokMadeMeBuyIt — which is now at over 40 billion views — and #BookTok translating online attention into genuine cultural phenomena.
 
This journey from challenger to juggernaut is no accident; for TikTok’s general manager of global business solutions, SEA, Seungyeon “SY” Kim, it is the result of the company’s shrewd leveraging of widespread changes within the advertising landscape. 
 
Turning tides
 
SY, a 15-year veteran of the industry whose career includes executive stints at Google and InMobi, believes the time of the online advertising market being “dominated by a few big players” is over. “The equation has flipped,” he declared. “The industry is much more open, competitive, and diversified now. As technology has evolved, new players are now growing the industry.” 
 
“What constitutes a ‘market leader,’ indeed what our market itself will look like, will radically evolve over the next decade,” observed SY. “New platforms must showcase high reach, relevant engagement, and compelling conversions for brands, all within a safe environment.”
 
Following that formula has clearly paid off for TikTok. It has been continually recognised in Kantar’s annual Media Reactions study as one of the most preferred media brands among both consumers and marketers, while ranking first in innovation and trustworthiness among marketers in the 2022 study.
 
SY attributes this success in large part to TikTok’s efforts to invest in user and brand safety, but emphasises that the platform’s “strength and uniqueness lies in our community.” “Our users are highly engaged and leaned in, which translates to passion,” he said. 
 
“In Southeast Asia, users are logging into TikTok on average 12 times a day. This is because our content is entertaining, and our community is diverse. Four out of five users only use TikTok when they’re on the platform. There are no second-screen consumption habits here.”
 
To infinity and beyond
 
This leaned-in community, which is not only responsive but receptive to ads, has created an environment ripe with opportunity for brands. According to a TikTok-commissioned survey by Toluna, 80% of users discover products from TikTok ads when consuming content, while 25% of users create content about the products they discovered on the platform, resulting in what TikTok calls an “infinity loop” of marketing.
 
 
In contrast to the traditional marketing funnel and consumer journey, this infinity loop is not linear — “users enter, exit, and re-enter at different points of the path to purchase,” said SY. Citing TikTok-commissioned research from BCG on the future of commerce, he said, “For brands to engage consumers effectively in the infinity loop they have to appeal to both functional and emotional needs.”
 
Though marketers may baulk at the thought of learning new strategies to address consumers’ changing needs, SY’s solution is simple: reach consumers with content that is “entertainment first, commerce second,” a.k.a. “shoppertainment.” 
 
SY sees strategies like shoppertainment as a way for brands to engage their audiences on a deeper level, and achieve more relevant reach. “Instead of targeting people in a linear manner, brands can build communities via affinities and passions. Brands that embrace this paradigm shift will create more meaningful connections with their audiences and drive better business outcomes,” he said.
 
This recalibration in strategy will not only help advertisers define and reach relevant audiences more efficiently — an especially important consideration within the wider macroeconomic context — but also foster brand loyalty and advocacy among consumers. Referencing TikTok’s participatory nature, SY pointed out that the democratisation of creativity on online platforms means “anyone can create a video that convinces others to shop.”
 
From content to cart
 
TikTok has developed advertising solutions with these shifting consumer behaviour and expectations in mind, including solutions such as TikTok Shop Ads. These shoppable ads — which are available both on video posts and live sessions — enable brands to “accelerate the purchase journey from content to cart,” said SY, while providing a “closed-loop experience with no pixel implementation needed and no tracking loss for quick and easy analysis of campaign impact” to advertisers. “TikTok users are highly engaged, and combined with TikTok's authenticity and fun content and creators, we're fully equipped with the ability to influence purchases. Combining our influence with commerce-enabled content is what is helping sellers convert customers faster and easier.”
 
SY envisions TikTok Shop Ads “becoming a key marketing channel for all advertisers in Southeast Asia.” The format has been “readily embraced” by brands and marketers in the region and is especially popular within the fashion, beauty, and FMCG categories, with brands like L’Oréal and Nivea already seeing strong ROAS and conversion rates on both video and live shopping ads. “Going live as a shopping format is growing steadily in Southeast Asia. This makes TikTok Shop Ads an important solution because it’s helping sellers address a new customer demand for shopping live while being able to build brand engagement and get customer feedback in real time.”
 
“As a platform known for its virality, advertisers look to us to build their brand awareness. But what we realised is that we are more than that. We are also good at helping brands convert,” said SY. “With the success of the platform, brand and advertiser expectations of TikTok have evolved as well, and we strive to not just deliver but stay ahead of the curve.” 
 
“Our vision for the region is simple: we want to be the leading video platform to connect brands, creators, and users in new and meaningful ways,” he said. Looking ahead, SY sees TikTok continuing to be a “trusted entertainment platform that inspires creativity and delivers results for brands.”
 
Click here to learn more about TikTok Shop Ads.
 

 

Source:
Campaign Asia
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