Spilling The Rosé In Cannes, With TikTok’s Monetization Chief

Summary

AdExchanger Talks: "Spilling The Rosé In Cannes, With TikTok’s Monetization Chief" – Detailed Summary

Podcast Information:

• Title: AdExchanger
• Host/Author: AdExchanger Talks
• Episode: Spilling The Rosé In Cannes, With TikTok’s Monetization Chief
• Release Date: June 24, 2025

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Introduction

In the premiere live episode of AdExchanger Talks recorded amidst the vibrant atmosphere of Cannes, Managing Editor Alison Schiff engages with David Kaufman, TikTok’s Head of Product Solutions and Operations for Monetization. This episode delves deep into TikTok's advertising innovations, industry trends, and Kaufman's personal journey within the ad tech landscape.

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Guest Background and First Impressions of Cannes

Alison Schiff opens the conversation by welcoming David Kaufman to his first Cannes experience.

[00:35] David Kaufman: "I'm David Kaufman. I'm the head of product solutions and operations for monetization at TikTok, and actually my first time here in Cannes, so it's a good experience."

Kaufman shares his initial impressions of the conference, highlighting the "level of creativity and excitement" that exceeded his expectations.

[00:55] David Kaufman: "The level of creativity and excitement and engagement around Cannes itself has been really compelling for me."

Alison notes the distinct vibes between the creative/Palais side and the technology contingent, suggesting they operate almost as separate entities.

[01:19] Alison Schiff: "It almost feels like two conferences to me."

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Evolution of Ad Networks and TikTok's Position

Kaufman reflects on his journey from a physics major passionate about solar energy to the dynamic world of ad monetization. He emphasizes the transformative nature of ad networks over the past 15 years.

[04:11] David Kaufman: "What was really compelling about jumping to much larger companies is the scale of the services you can deliver and the diversity of the content offerings is much better."

He discusses the historical stigma around ad networks being mere middlemen but notes a positive shift towards "privacy-safe" and "integrity-focused" offerings.

[07:38] David Kaufman: "We have a much more privacy safe, much more integrity focused level of offering to the advertiser community."

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TikTok's Ad Product Innovations

GMV Max and Smart Plus

Kaufman introduces GMV Max, a solution aimed at automating marketing operations for product catalogs on TikTok, integrating seamlessly with the creator ecosystem.

[12:34] David Kaufman: "GMV Max will sort of automate all of the marketing operations for your entire product catalog."

Smart Plus is presented as TikTok's revenue automation tool, facilitating product sales through websites or apps by leveraging product catalogs and creative assets.

[16:59] David Kaufman: "Smart Plus is our revenue automation solution."

Symfony: Generative AI Suite

Symfony is TikTok’s foray into the generative AI space, designed to streamline the creative process for marketers and creators.

[15:27] David Kaufman: "Symfony is our solution to the generative AI space... If you'd like to start with just a text based brief of the ad you'd like, we can generate the entire video for you from that text."

Symfony offers AI-generated digital avatars and customizable creative packages, enhancing scalability and efficiency in ad creation.

[17:25] David Kaufman: "You could select from a variety of avatars that we've created, which will then promote your products... We think this is a pretty compelling offering."

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Integration Between Ad Products

Alison probes the synergy between Smart Plus and Symfony, highlighting the necessity for these tools to communicate effectively.

[18:36] David Kaufman: "We're working at ways to bring all of our solutions more tightly together... integrating this more tightly with Symfony, it gets really interesting."

Kaufman elaborates on how combining generative AI with product catalogs can optimize ad performance and enhance the creator ecosystem's role.

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Comparison with Competitors

Alison draws parallels between TikTok’s offerings and competitors like Microsoft’s Performance Max and Meta’s Advantage Plus, questioning how Smart Plus differentiates itself.

[20:20] David Kaufman: "Smart Plus operates on TikTok and we're fundamentally different in that we are a commerce driven platform."

Kaufman emphasizes TikTok’s unique position in bridging content and commerce, facilitating seamless transactions within the ecosystem.

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Growth Drivers and Vertical Insights

Kaufman outlines the primary growth drivers for TikTok's advertising business, attributing success to robust performance solutions and innovative AI capabilities.

[11:36] David Kaufman: "Our solutions have really matured... with richer performance, better generative AI capabilities."

He identifies key verticals experiencing significant growth on TikTok, including e-commerce, travel, automotive, and media & entertainment.

[25:21] David Kaufman: "E-commerce and retail... travel, like automotive... media and entertainment sector."

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Advertising Metrics: CPMs and Investment Timing

Discussing Cost Per Mille (CPMs), Kaufman reassures advertisers of favorable conditions for investment, citing balanced supply and demand backed by aggressive user growth.

[27:05] Alison Schiff: "How are CPMs?"

[27:07] David Kaufman: "They're good right now. Everyone should get on the platform."

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User Experience and Concerns

Addressing concerns about TikTok's addictiveness, Kaufman highlights the platform's commitment to user experience and ad integrity. He notes enhanced parental controls to ensure balanced usage.

[28:36] David Kaufman: "We have shipped some additional parental controls and user controls to make sure that people keep their usage in balance."

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TikTok Trends and User Engagement

Alison and Kaufman share anecdotes about perplexing TikTok trends, emphasizing the platform’s dynamic and ever-evolving nature.

[29:16] Alison Schiff: "It was the spinning microwave filter one... making themselves or objects spin slowly as if they're in a microwave."

Kaufman admits to not fully grasping some trends but acknowledges their high engagement rates.

[29:50] David Kaufman: "I've seen some really compelling ones and I've seen some that are quite ephemeral."

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Inspirational and Eye-Rolling Moments from Cannes

Towards the episode's end, Kaufman shares an inspiring story about a Pantene campaign born from a creator's organic content, leading to viral success.

[31:09] David Kaufman: "The speed at which that happened is something that really you only see on TikTok."

Conversely, he expresses mild exasperation with overly ambitious and poorly formed AI ideas pitched by some industry players.

[31:21] David Kaufman: "I've been in a couple conversations where people will pitch me an AI idea and 10 minutes later I'm not sure I could tell you what the picture is."

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Conclusion

The live episode concludes with mutual appreciation and reflections on the dynamic environment at Cannes. Alison and David wrap up the conversation, highlighting the blend of professional insights and personal anecdotes that make AdExchanger Talks a valuable resource for industry stakeholders.

[32:37] Alison Schiff: "Thank you very much. Thank you. Yeah, that was resonant. Thanks."

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Notable Quotes:

• David Kaufman [00:55]: "The level of creativity and excitement and engagement around Cannes itself has been really compelling for me."
• David Kaufman [07:38]: "We have a much more privacy safe, much more integrity focused level of offering to the advertiser community."
• David Kaufman [15:27]: "Symfony is our solution to the generative AI space... If you'd like to start with just a text based brief of the ad you'd like, we can generate the entire video for you from that text."
• David Kaufman [25:21]: "E-commerce and retail... travel, like automotive... media and entertainment sector."
• David Kaufman [27:07]: "They're good right now. Everyone should get on the platform."

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This episode offers a comprehensive look into TikTok’s strategic advancements in ad monetization, the interplay between content and commerce, and the broader trends shaping the advertising technology landscape. For brand marketers, ad agencies, publishers, and tech providers, Kaufman's insights provide valuable guidance on navigating the evolving digital advertising ecosystem.

Transcript

[David Kaufman]

Foreign.

[Alison Schiff]

Hey, guys. Alison Schiff, managing editor of Ad Exchanger, and we're live in Cannes for Ad Exchanger talks. And this is the first ever live episode of AdExchanger Talks. Actually, we've recorded a few live Big Story podcasts, which is our other podcast on stage at our events, but we've never done a live talks, so thank you for being my guinea pig, David Kaufman.

[David Kaufman]

Happy to do it. Happy to be here.

[Alison Schiff]

State your name for the record.

[David Kaufman]

Sure. I'm David Kaufman. I'm the head of product solutions and operations for monetization at TikTok, and actually my first time here in Cannes, so it's a good experience.

[Alison Schiff]

This is your first Cannes.

[David Kaufman]

This is.

[Alison Schiff]

All right, well, we're recording this on day two, like, midway through day two. What are your impressions so far, besides the heat?

[David Kaufman]

Yeah, I know.

[Alison Schiff]

I'm sweating too.

[David Kaufman]

Yeah, it's a little bit warm here. It's been a pretty incredible conference so far. I've mostly been at the Carlton, where we have our headquarters meeting with some of our customers, some of our advertisers, the ecosystem. But the level of creativity and excitement and engagement around Cannes itself has been really compelling for me. I don't know what I was expecting coming in, but my expectations have been exceeded by the level of energy that's here.

[Alison Schiff]

It's an interesting vibe, though, right, because it's like two different worlds. There's the creative and the Palais, and then there's technology contingent, and the twain don't really meet that often. It almost feels like two conferences to me.

[David Kaufman]

It does. And it's got a little bit of an undercurrent of everyone's here to celebrate the industry. At the same time, some people are here to get work done. So the vibe kind of interacts in interesting ways, both at the events themselves and also at some of the dinners and after events.

[Alison Schiff]

I mean, what's fun about my job is that this is me getting work done. Just like having a chat with you.

[David Kaufman]

You get the best of both worlds.

[Alison Schiff]

Yeah. Right. Although then I have to go back to my Airbnb at, like, midnight and write a story, so that's kind of a long day. That's a bummer for me. My chosen life.

[David Kaufman]

Technically, I'm working here too, and enjoying it, so thank you for having me.

[Alison Schiff]

Yes. Well, so this is something we do. On every Ad Exchanger talks, I ask my guests, what is one thing about them that not a lot of other people already know that you couldn't easily find by checking their LinkedIn or googling their name. What's your fun fact?

[David Kaufman]

My fun fact? Well, I think if you were to look at my LinkedIn, you'd probably see I went to college, which is not a surprise for anyone, but I was actually a physics major. I specialized in solar energy and photovoltaics. I was really kind of fascinated by this idea that there's a tremendous amount of free energy that just hits the planet every day and if we figure out how to use it, we'll solve a major problem. I have since lost my way from that original calling, but that's my background, was thinking about how to get rooftop solar into a better state.

[Alison Schiff]

So you said physics and another word that I did not understand.

[David Kaufman]

Sorry. Photovoltaics is our fancy way of saying solar energy. It's basically light hits special material and generates electricity as a result of that.

[Alison Schiff]

And apologies if we end up looking really shiny because we're recording this at the Hotel Martinez where the AC is on and off because the power is on and off. So as you were saying before we started recording, if they had solar panels and there's a lot of sun in.

[David Kaufman]

Cannes, then I was actually only half joking. It would be really, really good for the environment in the hotel if they invested in a rooftop array and some heat pumps and then it'd be nice and cool in this room and we'd be grin independent. That'd be fun.

[Alison Schiff]

So you went from that to ads monetization, but you've spent time also before TikTok at both members of what we often refer to as the duopoly. So you spent time at Facebook when it was still Facebook and in product, and also you were focused on core messaging products at Google for a few years and then you made your way to working on ads monetization and some products at TikTok. What is it about ad product that does it for you?

[David Kaufman]

Well, I should say I'm sort of born in Silicon Valley and was raised there and sort of got the technology bug pretty, pretty early on. And earlier in my career I worked in venture capital. And in addition to the solar energy stuff I was just going on about, we were really interested in ad supported businesses and how we can drive the consumer Internet with free services. And the idea that ads were probably the primary mechanism to pay for all of the cool stuff on the Internet I found really rewarding and compelling. So after I was in venture capital, I actually left to start my own ad tech company. It was a small ad network and then did another investment starting a company in the monetization space. We Thought that we would take product data from everywhere and distribute it online and have one click to purchase everywhere on the Internet, which was a good vision, but it was about 14 years too early.

[Alison Schiff]

Too early, yeah.

[David Kaufman]

Good news, we saw the future. Bad news, we had the timeline completely wrong. But working in those areas led me to ads monetization. And what was really compelling about jumping to much larger companies, as you've identified, is the scale of the services you can deliver and the diversity of the content offerings is much better. So rather than powering, my little startup was able to pay for some of the best social networking infrastructure on the Internet and help bring communities closer together and build entertainment experiences that are all available for free for anyone who wants them, both on the open web and then of course, in the apps. Now, as that ecosystem has taken over.

[Alison Schiff]

When you said my little startup, my brain just went to my little pony for stupid reasons.

[David Kaufman]

Well, their brand probably has more cachet than mine did, but it was a really interesting time. I think in the late aughts, early 2010s was really kind of the wild times for performance advertising. Affiliate networks were taking off a lot of the infrastructure. There were multiple layers of middlemen working on the Internet. And obviously over the last 15 years or so, we've seen a lot of consolidation in the major tech platforms where they have fully integrated ad stacks and complex offerings. And TikTok is certainly one of those. We have everything that you could need as a marketer, from brand awareness solutions all the way to driving conversions and sales on our platform or on your own website. And working through the evolution of the industry was actually really a lot of fun. We saw the early days where people were basically paying to deliver an ad, and then you were paying to deliver an ad that really was more compelling and drove more engagement or pay to deliver an ad that changed somebody's sentiment about the content that they were seeing, or making it more memorable. And eventually, with the signals and measurement infrastructure becoming more robust, you went along this journey where instead of paying to deliver the ad, you're paying for the person to take action after seeing the ad, whether that was to click or it was to click and then add something to cart and then purchase it. And the amount of infrastructure and technology that enabled all of that was like a fascinating thing to work on. I was very privileged that I got to see it from a few different angles working in ads at both very small companies and at some large ones as well.

[Alison Schiff]

It's interesting now that being an ad network is not considered like a bad thing. There was a weird time about seven or eight years ago when if we described a company as an ad network in one of our articles, I would get an email from the PR person say, well, we're not really an ad network people. People didn't want to be known as ad networks. And now there are ad and media networks coming out of the woodwork.

[David Kaufman]

Yeah, I think the, you know, funnily enough, when I left to start my first company, the vision was to build a fully transparent ad network. We wanted publishers and advertisers to both see what the offers were and where they were being delivered. And it turned out that that was one of those things that everyone complained about, like, I want more ad transparency. They still are, they still are. And I think people take it much more seriously now than they used to. In the Wild west days of the time I was running my startup, being transparent was a differentiator. But it turned out it wasn't one that people found deeply compelling. They cared much more about volume and total ad flow and the amount of revenue that you could deliver. And I think those are still true. But at this point, there are a lot of places you can go to to get the kind of volume you want. You don't have to piece together the entire Internet audience through 30 different ad networks anymore. And as a result of that, the ecosystem has evolved and we have a much more privacy safe, much more integrity focused level of offering to the advertiser community. And so I think as we went through that evolution, hopefully ad networks started to take this more seriously. And it took a little bit of this stigma out of being an ad network. You stopped being only a middleman between multiple other ad networks or between multiple publishers that were trying to get to scale. And it became something that actually offered compelling value, that acted above board and in a way that was aligned with the brand safety principles and the identity protections that the Internet expects these days.

[Alison Schiff]

So I do want to talk a bunch about new products and new stuff that TikTok has announced at Cannes and also at TikTok World pretty recently. But first I want to talk about the ban just for a little bit, because we're recording this on June 17th. So it's two days before the deadline and we haven't heard anything yet. So by the time we post this episode, maybe what we say to each other is a little bit stale. But regardless of what happens, there is still this kind of like miasmic cloud of uncertainty. And, you know, people like me are constantly probably asking you, people like you, what do you Think like, what's going to happen. I'm not going to ask you what's going to happen. I don't know what's going to happen. I'm sure you don't know it's going to happen. You might have theories, but how are you preparing advertisers for any eventualities and what have you been saying to them over the past number of months as the deadline has been extended and maybe they've had questions about what they should do for their planning?

[David Kaufman]

Yeah, this is a great question and I have been asked it a couple times, but I appreciate you bringing it up. I think one of the most important things is that we are not actually hearing a lot of concerns from our advertisers. We're just hearing messages of support. They're invested in the solutions, they're very happy with the results and the performance that they're seeing as a result of that. They're just getting these messages of please continue to deliver the value that you're currently delivering for us. I might contrast what's going on now compared to back in January. Right now this has sort of become business as usual for us. The advertisers expect us to continue to be available to offer access to our audience, access to the creator ecosystem, and they're investing very heavily. I think back in January we learned that we should offer seamless capabilities all the way through, no matter what the eventuality was. And we got good results from that and we continue to make sure that we're invested in the ecosystem.

[Alison Schiff]

Well, I know you don't share ad revenue numbers, so you're not going to comment on this, but I did read somewhere there is a projection of 30 billion. Is it? I know you're not going to. You're just looking at me because you're not going to comment on it. This is my poker face, but I think something like 30 billion this year, which is, I think up 7, 8 billion from a previous projection. So putting the specific numbers aside, what are the main growth drivers for the advertising business? Because even though you won't comment on the numbers, you will of course agree that it's growing.

[David Kaufman]

Yeah, it's growing pretty rapidly as well. I think what I would observe, this is my second year at TikTok and I was lucky enough to join in a period where the company was really transitioning from a alternative platform to a must buy platform. And I think over the last year or so our solutions have really matured. So last year we introduced a couple of our performance automation solutions. We have a Long legacy of being known as a video first platform offering social video. Obviously we're a pioneer in short form video and a lot of our creator solutions are sort of industry first. But that evolution that really moved us into mainstream was really on the back of richer performance, better generative AI capabilities and some of these solutions that launched in the last couple years. So for one example, GMV Max is our solution where if you are a TikTok shop and you have product offerings on our platform, you're trying to drive a native conversion. On our platform, GMV Max will sort of automate all of the marketing operations for your entire product catalog. We also have the ability to connect that to the creator ecosystem so you can authorize creators to make videos on your behalf that showcase your products and then commission when those sales occur. So that's one way in which I think our investments in native commerce have really leapfrogged some of the capabilities and performance that are out there in the ecosystem generally on other platforms. Another way was our investment in Smart Plus. This is our revenue automation solution. If you'd like to sell a product through your website or through your app, you have a product catalog. And again, we just automate the delivery of those performance solutions. The other thing that's really compelling is our investments in search. So last October, I believe it was, we launched our keyword search product search campaigns. This gives advertisers the ability to purchase the keywords they like or restrict them in order to deliver an advertisement right at that incredibly high intent moment where a user is executing a search. One of the things that I actually think is really interesting about that is the entire search industry is going through a little bit of a paradigm shift.

[Alison Schiff]

A little bit of a paradigm shift? Yeah, yeah.

[David Kaufman]

They are perhaps a medium sized paradigm shift. And while we don't really know what the future holds, one of the things that's very clear is that consumers are engaging much more with dynamic and personal and immersive content than with just the sort of stale answers that they used to get through some of the old mechanisms. And we're seeing that on our platform. We actually have seen search behavior become critical. We're about, I think it takes about 30 seconds for one in four users to execute a search when they open the platform. So it's becoming a primary user behavior on TikTok itself. On top of that, we're seeing a huge increase in search volume year over year. And I think all of those things create an environment where we can monetize and offer the kind of solutions that Drive the revenue growth that you alluded to a few minutes ago.

[Alison Schiff]

What are people searching for? Are they searching for products?

[David Kaufman]

They are. They search for products, they search for inspiration. We're seeing a tremendous amount of search that breaks down by vertical, actually. So there are a couple examples. Before I came out here, I was actually searching for can. And you know, we got local activities, local restaurants. If you search for can on TikTok right now, hopefully it's still up. When this is viewable, you'll actually get what's called our branded Search Hub, which is a curated view of all of the most important content that's currently going on at Cannes. To help you navigate, I also do a lot of search for auto products, for recipes. I cook with my daughter fairly regularly. She's going to be eight years old this week, so I'm actually flying home a little early for her birthday. But very exciting to be able to discover that type of content and also discovery new creators that I want to follow. So it improves my for you feed as a result of executing those searches.

[Alison Schiff]

And then one of the products that you didn't mention was Symphony, which is a generative AI suite. And there were a bunch of announcements at Can. But before we talk about them, what is Symfony in more detail?

[David Kaufman]

Yeah, very good question. So Symfony is our solution to the generative AI space. What we've done is put all of our tools together in one place to help creators, marketers all think about the ways in which they can drive better experiences on the platform. One of the things that we've really observed as we've started to get into this performance space more fully and try to invest in richer solutions for brands at all stages of the funnel, is that the creative area can be a real bottleneck. You know, incredibly expensive to hire a production team and shoot multiple ads and then try to break that into all of the video solutions you might need for all of your advertising needs across all channels. That's an incredibly expensive offering. And so Symfony is one of the ways in which we're making this more scalable for advertisers. If you'd like to start with just a text based brief of the ad you'd like, we can generate the entire video for you from that text. If you'd like to start with a product itself, we have the ability to have a spokesperson speak to that product through our generative AI solutions. Or if you'd like to start with an image and transform it into a video to seed the technology. With something a little bit more specific, you can do that as well. So the ability to really put the power into the hands of the actual marketer that's hands on keyboard to drive their own creative or at least test solutions before you hire the more expensive team is one of the major offerings and one of the major value propositions that we think Symphony brings to market.

[Alison Schiff]

Some of the things you mentioned are the new things.

[David Kaufman]

I couldn't help myself.

[Alison Schiff]

No, that's fine. Because I wanted to. You brought up a spokesperson, but that's an AI generated digital avatar.

[David Kaufman]

Or it is.

[Alison Schiff]

It is.

[David Kaufman]

Right.

[Alison Schiff]

Okay.

[David Kaufman]

So you could select from a variety of avatars that we've created, which will then promote your products and sort of showcase what you offer and give a more immersive experience to explaining your products to your audience.

[Alison Schiff]

So that's a bespoke thing. Or you choose from.

[David Kaufman]

Just like we have a library that you can select from.

[Alison Schiff]

Okay, interesting. So two brands might have the same AI generated avatar, they might have the.

[David Kaufman]

Same avatar, but they certainly wouldn't have the same full creative package. And we're also looking at ways that we can make this more custom and expandable library.

[Alison Schiff]

Okay, that's interesting. What have you found in testing that? Does it help?

[David Kaufman]

It does. I think one of the things that really shines on TikTok's platform is compelling creation. You know, I think one of the things that we've been very consistently messaging to the market is that the better and richer and more diverse your creative, the better we're going to be able to find an audience that engages with it or takes a transaction as a result of seeing your creative. And this is one of the ways that you can proliferate creative across the entire platform. So we think this is a pretty compelling offering. The early results are positive. What I would say is that we are very excited to invest more heavily in this space because of the results that we're seeing.

[Alison Schiff]

Okay, cool. And you brought up Smart plus and we were just talking about Symfony. How do these things work together? Because of course, they must communicate with each other. One maybe, I guess, feeds the other. They can't be separate, right?

[David Kaufman]

Well, we're working at ways to bring all of our solutions more tightly together. I think the backbone of Smart plus is really your product catalog. We can certainly automate everything, but if you have a full offering on your product catalog, that's when you upload basically all of your inventory to us along with your creative assets. The images, the descriptions, potentially the video that you offer associated with those products, we then automate the creative generation and what we show on the platform. When we start thinking about integrating this more tightly with Symfony, it gets really interesting because then we're bringing together both AI, generative AI and the product catalog assets you already have. The other thing I would highlight that we're thinking about, which is really maybe more on the GMV Max side of our business. So driving ads for the shops TikTok shops offering would be the affiliate creative. So we want to, in addition to offering generative AI solutions, we want to make it really easy to work with our creative ecosystem, our creators. And that allows them to select products from your catalog, shoot videos that promote those products, and then get paid on the basis of their own success when you spend ad dollars against those campaigns. So we have both offerings, the generative AI as well as tapping the creative ecosystem seamlessly coming together to help you drive performance.

[Alison Schiff]

And that would use the word performance and that makes me think of like performance Max for example. And then there's Performance plus, which I think is Microsoft's AI powered ad platform.

[David Kaufman]

We all seem to like the word performance.

[Alison Schiff]

I know. And then there's Advantage plus shopping campaigns, which is metas, what you were just describing, making it easier to connect with creators. That feels like one differentiator. But how does Smart plus stand out? How is it different from those other solutions?

[David Kaufman]

Yeah, it's a really good question. What I would say about Smart plus is that it operates of course on TikTok and we're fundamentally different in that we are a commerce driven platform. We've been very successful in closing the gap between content and commerce, driving all the way from discovery to transaction within our ecosystem itself. So when you're using those solutions and you're trying to drive an on platform conversion, Smart plus and gmvmax are really strong ways to do that. And if you prefer to have the transaction occur inside your app or on your website or even in your store, we have a lot of evidence about the halo effect of TikTok driving offline results. Then I think those are ways in which the solutions are pretty differentiated. I think the platform really stands out in its ability to drive transactions to.

[Alison Schiff]

Directly and I guess this is one item probably that's on your ad product roadmap, which is bringing some of your solutions closer together. Like what else is on the ad product roadmap?

[David Kaufman]

Well, there's a lot of fun stuff that's coming down the pipe. I can't talk about it in terrible detail, but what I would say is that you'll continue to see innovation on the AI front with us. We want to make it easier to generate the creative that's helping you be successful. We want to make these things move together more seamlessly. There's also a lot of innovation on the auction itself. How do we get that to be as efficient as possible? How do we make sure that we continue to drive performance? By taking the very best assets that you have and making the most of every dollar and every moment where a customer is engaged. The other thing I want to talk about a little bit is on the sponsorship side of our business, which is maybe a little bit more upper funnel compared to the standard marketing campaign. We have some new solutions that really merge online and offline and allow advertisers to take advantage of critical moments on the marketing calendar, big cultural events. So actually on the way here to Cannes, I flew through Nice. There's an installation at nice around TikTok itself talking about the Cannes opportunity. You might have seen it or please look for it on your way out. And it's an example of the kind of things we can do with either our out of phone investments or our sponsorship moments to make sure that an advertiser is at those critical cultural moments. So if you look, last year we saw a lot of engagement with Olympics content. If we look forward, major holidays are going to be pretty important moments on TikTok. So bringing those all together through sponsored moments is pretty important. Also want to mention one other product which is TikTok MarketScope, which we announced at TikTok World a couple weeks ago. This is a solution that really gives advertisers access to our first part data and shows how a customer is flowing from that first discovery through consideration through the ultimate conversion or transaction phase. And it's a great way to get insights on what compels your audience, what moves them forward and allows you to have better visibility into that customer journey on TikTok itself. So those are areas that you should expect us to continue to innovate. Of course we're going to drive AI. We're very invested in the creator ecosystem, as I mentioned, and we continue to drive better and better performance solutions as well.

[Alison Schiff]

So, AI, I'm curious what you think about the Mark Zuckerberg vision of everything being fully AI automated. Just give me your goal, give me some money, Peace out. We'll just give you the performance and you don't have to be involved at all. And all of that is going to happen by the end of next year, by the end of 2026.

[David Kaufman]

I think my response is, you know, maybe someday, but it doesn't feel close to me at all. You know, I look at the capabilities of generative AI and AI in general, and I really see them as tools that help drive marketers to be even more successful. So if you think about what makes an advertisement successful, understanding your audience, being creative, you know, telling a compelling story, introducing a product, all of those things, you know, AI can help you with them, but I don't think it can replace the creative process. And so we're very focused on making creativity as easy, as effective and as scalable as possible. On TikTok, my general view is that AI is going to drive even better solutions over time. So if we're talking about like a very narrow component of the ad stack, like trying to apply AI to attribution challenges when you have imperfect data, if you're talking about using AI to improve ads ranking so that you're showing an ad to someone who's going to be more compelling, all of those things are being greatly improved over the last decade and will continue to accelerate thanks to some of the AI techniques that are out there. I don't think we're very close to being able to describe your goal in text and then realize it without anything else. I also think the creator ecosystem, the advertising ecosystem, the agency ecosystem, all add tremendous value to your ability to deliver the right message to the right user, the right, right time. And so certainly our platform has a place in that. Every technology platform has a place in the future of this business. But I don't see that level of disintermediation on the horizon.

[Alison Schiff]

The timeline is wild to me. It is at the end of next year. Come on, Mark, just come on. What verticals are seeing the most growth on TikTok right now?

[David Kaufman]

So E commerce and retail, certainly we're seeing a lot of results based on the ability to drive those transactions, especially on platform. We're also investing in new verticals like travel, like automotive. I think these are interesting spaces because they have the ability to be very performance centric with their advertising. We just need to make small tweaks to the product catalog offering. So, you know, if you think about what E commerce offers, you have product descriptions, etc. How do you modify that to be useful for a hotel or an airline? So the travel industry is really interesting for us. Automotive as well. There are a lot of features that you want to highlight with cars for certain audiences. You might think about its ability to have two kids. We might need five to seven seats. If the grandparents want to come with us, that might be a feature that you want to highlight. In other instances, it might be the faster charging time on an electric vehicle or the ability to take long road trips. All of those capabilities are being expressed through these updates that we're making to the product itself, which allow new verticals to be effective on the platform. We're also investing very heavily in the media and entertainment sector. So there are a lot of examples of films being promoted on TikTok and then driving digital conversions for tickets. We think that our solution, particularly with some of our premium brand offerings like Top View, which is sort of a digital billboard, your first experience when you open the application, really compelling to introduce things like movie trailers. So we're seeing a lot of growth in those sectors, but it's not limited to those either. We're seeing cpg, we're seeing some improvements in health, we're seeing some improvements. I mentioned E commerce and retail, travel, auto financial services, really across the spectrum. But those are the ones that really stand out where we've introduced new vertical solutions that have helped accelerate growth.

[Alison Schiff]

How are CPMs?

[David Kaufman]

They're good right now. Everyone should get on the platform.

[Alison Schiff]

Okay. Is my impression that they're kind of a deal right now? Actually, they're down at the beginning of the year because of some of the uncertainty, but the engagement isn't down. So it actually does feel like kind of a good time to get in there.

[David Kaufman]

Yeah, absolutely. And of course, our inventory is also rising because our user growth is up as well. So we have the ability to try to keep these things in balance and make sure that we can find value for advertisers across all budgets and across all objectives. But yeah, it's a very good time to invest.

[Alison Schiff]

Is it more like a supply constraint, demand constraint, or, you know, is it.

[David Kaufman]

You know, at the moment, we're very lucky to have pretty aggressive user growth. We have more than a billion users worldwide, more than 170 million in the US lines are up into the right, which is really good for us, and that's driving a lot of new supply. We're also seeing new inventory offerings on the platform as we make innovations with our ad solutions. So things like Top View introduced new forms of inventory, new ad formats. As we think about the connection between commerce and content, that might open up new inventory as well. We're thinking about when the creators promote products inside their own feeds. So we have a lot of opportunities for advertisers to invest that are keeping supply and demand a little bit in balance.

[Alison Schiff]

And what's your perspective on concerns from parents or experts who worry about the. The addictiveness of TikTok? I mean, I asked that as a monetization guy, but also as a parent yourself.

[David Kaufman]

Yeah, as a parent. So my children are under 13, so they're not on the platform at all. Of course, we think about from the monetization side, obviously we want to make sure that we're getting good value for our advertisers, but we also care very deeply about the user experience. We care about ads integrity, we care about whether or not the message is resonating, and we try to refine those things over time. I think strictly on the user side, what we've seen is that TikTok is a compelling entertainment destination, and we've shipped some additional parental controls and user controls to make sure that people keep their usage in balance and aligned with their interests.

[Alison Schiff]

What's a recent TikTok trend that you just didn't understand? I have one.

[David Kaufman]

Let's start with yours. I might need to think for a minute.

[Alison Schiff]

It was the spinning microwave filter one. Do you know that one?

[David Kaufman]

I don't know.

[Alison Schiff]

Yeah, it's like, really bizarre. So basically people are using. It's kind of fun though, too. But it's strange to me, like, I don't know why they're doing this. People started using AI cap cut, like a template to make themselves or objects or like their pets spin slowly as if they're in a microwave.

[David Kaufman]

Oh, interesting.

[Alison Schiff]

Just over and over again.

[David Kaufman]

Okay.

[Alison Schiff]

Like, that's the video.

[David Kaufman]

That's the video.

[Alison Schiff]

Yeah.

[David Kaufman]

But getting a lot of engagement, apparently.

[Alison Schiff]

Enough that I was exposed to it and I live under a rock, so.

[David Kaufman]

There'S a. I haven't seen that one yet. I'm gonna have to go do some searches after this. There is one that I've run into which might be a demographic thing where children are having their parents speak Gen Z lingo into the camera and struggling to keep a straight face as the parents completely butcher this content. What I would say is I understand the trend, but not most of the words that are being used. That one I have slowly picked up. I still don't know what's is.

[Alison Schiff]

Oh, it's a toilet.

[David Kaufman]

Is it really?

[Alison Schiff]

Yes.

[David Kaufman]

Okay. Glad we got that on the podcast.

[Alison Schiff]

Yeah. Cool. It's. It's like. I thought it started as a. It's a YouTube trend, I think, originally. Skibidi toilet. I don't want to talk about Skibidi toilet. I should not be the one explaining what it is because my understanding of it is pretty tenuous and it's super bizarre.

[David Kaufman]

Okay, Beth.

[Alison Schiff]

Bad. All right, so I'm going to wrap us up so I can send you back on the quasit to take more meetings. But I know it's only about halfway through, or not even exactly halfway through your first can, but what's one really inspiring thing that you've heard so far and what's one thing that made you secretly roll your eyes?

[David Kaufman]

One really inspiring thing I heard so far. I think one of my colleagues, Hartun, who runs the North American global business, shared an example of a creator filming an organic video where they. Where she ran out of shampoo conditioner. Excuse me, ran out of conditioner. And the way the brand responded to that was to create a special one off of out of stock conditioner. And it went completely viral and exploded all over. I think Alex Earle was originally the creator who filmed the first video. And this is a Pantene example. And the interaction between a creator and a brand that was driven by an organic observation I thought was really compelling because the speed at which that happened is something that really you only see on TikTok, which I thought was really cool. On the other side of the spectrum, you know, I think the interest in AI has led to a lot of very ambitious, not particularly well formed ideas of what might happen next. And I've been in a couple conversations where people will pitch me an AI idea and 10 minutes later I'm not sure I could tell you what the picture is. So I try not to roll my eyes. But I've seen some really compelling ones and I've seen some that are quite ephemeral.

[Alison Schiff]

I've had the same experience briefing with probably some of the same companies. So I don't know how to end a live podcast. So I think we just like high five or something.

[David Kaufman]

Hey, I like it.

[Alison Schiff]

Thank you very much. Thank you. Yeah, that was resonant. Thanks.