If you’re familiar with the world of ad management, you’ve probably heard of pay by click where ad platforms only charge if people actually click on the link to your advert. TikTok is doing a similar thing letting brands only pay if people actually watch their ads.
The short form platform is launching Focused View Thursday, where brands only pay for ads when users voluntarily watch them for at least six seconds or interact with the ad during its first six seconds—whichever occurs first. The announcement is part of a slew of updates, including improvements to its TikTok Creator Marketplace and new tools for creators and entertainment brands, that the social platform is showcasing later Thursday at its second annual TikTok World, a global product summit for brands.
While the platform has been on a growth tear post pandemic, it is not immune to growing pains: The company’s operating losses more than tripled in 2021 from 2020 to more than $7 billion, per a report in The Wall Street Journal. And that was before this year’s uncertain macroeconomic conditions.
Where TikTok will lose some upfront money with Focused View, performance tools tend to make platforms more attractive for marketers and increase the number of brands willing to spend on the platform, especially as research has shown that brands favour lower-funnel tactics as they head into 2023’s risky economy. Focused View is a move out of YouTube’s playbook, which only requires advertisers to pay if users don’t click “skip ads,” an option it introduced more than a decade ago.
Despite it being more cost effective, marketers have expressed scepticism that Focused View could make TikTok a performance powerhouse. “TikTok as a pure performance channel has had a challenging journey,” said Katya Constantine, CEO of direct-to-consumer agency DigiShopGirl. “Its algorithm is not as strong as what we’re seeing coming out of Meta.” This quote surprised me as, from a consumer and content creator perspective, we seem to only see large numbers soar on TikTok. For example a TikTok will receive 40,000 views whereas the same in Instagram Reel format attracts 10,000.
TikTok plans to continue investing in its suite of performance solutions to help brands measure their impact on its platform, saying that capabilities around signals and attribution help brands understand how to measure their engagement on TikTok. The platform calls this a unique ad experience compared to other platforms.
Ignacio Vanzini, owner of ecommerce agency 598 Los Angeles, also made a very interesting point about short form content. Those that stand to benefit most from Focused View are brands with cheaper products that could sell in less than six seconds, like food or a simple kitchen tool, he added, and therefore, sell products without paying for the advertising at all. It makes sense when you think about it. We all love those iconic John Lewis ads that come around every Christmas. They’re so cinematic and in the format of television advertisements they work to a tea, creating a misty, nostalgic and festive feeling with a slow, emotive opening. Such craft wouldn’t last, well, six seconds apparently on TikTok. This makes the ad form for brands fairly rigid.
For more expensive products, TikTok is more effective at finding interested users and then targeting them later, sometimes on platforms like Facebook and Instagram, which are better at driving sales. Many luxury brands feel it is more effective to start posting content organically, see what gets traction and then amplify that with paid media.
Many marketers have also expressed difficulty in sourcing and scouting creators via TikTok Creator Marketplace. Brands have to wade through all of a creator’s videos, most comedy sketches, instead of only seeing those they’ve created for brands. A sense of relativity is what is lacking here.
TikTok said the changes to TTCM were implemented after receiving feedback from its brand and creator community on their content collaboration experiences. The goal is to make it easier for brands to find creators more efficiently, activate creator collaborations at scale and measure and optimise campaign performance.