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Ep 528: Cracking TikTok Shop: The GMV Max Revolution and How Pilothouse Builds Affiliate-Led Content Sales Engines | AKNF
00:24:25
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- [00:00]
Eric Dick
TikTok is a real enigma of a platform. It's the fastest growing in terms of number of users, but it still isn't really on the same page as meta when it comes to being able to spend and scale.
- [00:12]
Debbie
Organic is important, I think, for a brand to have a voice and to make like a footprint. But when it comes to conversions on TikTok shop, that's not where they're at. TikTok has this habit where you'll hit a viral moment. That viral moment will take you three, four, five, six months and then all of a sudden it'll just stop. For a lot of brands, it feels like TikTok is just like unreal reliable. Where the magic of TikTok is, is in community building. On TikTok, that part hasn't been quite figured out yet. Except for the brands who can have strong organic voice. That's how they're leading the charge.
- [00:52]
Eric Dick
You're spending real money to drive traffic to your site, but the truth is 98% of that traffic leaves without buying or giving you an email. Meta knows who they are. You don't unless you use Instant. Instant helps brand identify anonymous visitors so you can send more abandonment emails, build stronger retargeting audiences and actually recover that lost revenue. Liquid IV TRX and Truly Beauty. These are all massive stores that use Instant to see an average ROI of 21.7x. Instant will even guarantee you a 4x ROI or your money back. With Q4 around the corner, now's the time to double your email revenue and lock in smarter retention. Instant only takes minutes to set up and you'll start seeing results in just hours. Want to see it in action? Sign up by August 1st to get your first month free at Instant1DTC. That's Instant1DTC. It's all killer, no filler. I'm Eric and I am here on this lovely Friday afternoon with Debbie, senior account manager on the TikTok shops and social side of Pilot House. She gave a presentation to our sales team and to the D2C team maybe two weeks ago. Now, about some of the updates with TikTok shops and we thought, what a great opportunity to bring this to the podcast. Welcome to all Killer, no filler. Debbie, how you doing?
- [02:11]
Debbie
I'm good, thanks.
- [02:12]
Eric Dick
Eric, can you describe a little bit of your focus right now at Pilot House?
- [02:15]
Debbie
Yeah, so right now I'm sort of leading up our new TikTok shop division, primarily just focusing on helping brands establish a presence on TikTok and, you know, taking their commerce side of things as Our sort of like guide to TikTok rather than sort of like our traditional sort of sending traffic to their D2C but keeping everything on platform.
- [02:41]
Eric Dick
TikTok is, is a real enigma of a platform, I think because it's like the fastest growing in terms of maybe number of users, but also in terms of how much more month over month it's taking of people's attention versus maybe some of the other apps. And yet it's isn't really on the same page, I guess as Meta when it comes to being able to spend and scale. Is that still accurate?
- [03:03]
Debbie
I would say so. I think there's some brands that have found a lot of success but in terms of the way that most brands can access the platform, it's still very new and they're still sort of like trying to figure those things out. And that's sort of, kind of also what I touched on during our meeting on Tuesday is that one of the bigger changes that they've made literally this week, week to try to help brands really tap into the viral nature of the platform is actually changing up how they're allowing you to run ads. Typically TikTok has like an ads manager that looks and functions similarly to what you would expect on like Meta and Google. But then you know, a little while ago they introduced something called GMV Max, which I guess is like somewhat comparable to like PMAX or like Advantage plus but with its own TikTok spin on TikTok GMV Max sort of works by taking your like paid learnings, your like organic engagement and also like your affiliate engagement and allocating spend based on, you know, an ROI target that you set, but using all of these creatives and all this creative pool and information. And TikTok has now made it so that that's going to be the only way that brands can run ads on TikTok shop. And it's going to be so much more important to take creative seriously and like feeding your creative engine and figuring out your creative strategy as sort of like the forefront of how TikTok wants you to think about running ads on the platform.
- [04:32]
Eric Dick
It's ads and it's also organic content, which is something that I think that we're doing for clients right where they'll come in. They have no presence on TikTok and kind of you'll work with them to help with their voice and talk to. Talk to me a little bit about the kinds of content that you're creating for brands because I know traditionally Pilot House is focused on ads more first and foremost but it's kind of interesting that we're kind of evolving more into this organic content because of this kind of switch to GMV plus. So talk a little bit about the kinds of content you're making.
- [05:02]
Debbie
Yeah, so I think the, the kinds of content I'm making actually really varies on the brand and the sort of like, audience that they, they have naturally, and they're naturally, like, attuned to. I think, you know, for sort of one of the food and beverage brands that I'm working with, things like leaning into the TikTok trends, having like a more like humorous and like comedic tone seems to like super well and people like really engage and like that content especially anything has like a really like shocking hook or even something that might feel like a little bit like typically like off branded that's a bit more scrappy or playful. I see a lot of, a lot of like TikTok users respond to that on the organic side. But then I have like another brand that, you know, I would say is more in like, maybe like the medical or like the skin care space. And the kind of content that really seems to resonate for them is more on like the educational side, more, you know, informative, more long form, more, you know, explaining why things work and how they work and what the different ingredients are. So I think it's organic is all about finding the voice, your own brand voice and what your audience is actually coming to you for.
- [06:13]
Eric Dick
Interesting. And it's cool that we're able to help build that for some of our clients. And then what. How are we seeing that translate into TikTok shop sales? What, what con? I guess it's going to vary, of course, across clients. But how are we seeing the conversion from organic content to TikTok shop sales?
- [06:29]
Debbie
So it like, in all honesty, organic is important, I think, for a brand to have a voice and to make like a footprint. But when it comes to conversions on TikTok shop, that's not where they're at. The conversions come from your affiliate network. I would say about 80% plus in sales come from affiliates. So it's really like feeding your affiliate network and like fine tuning that and how you're getting content from them that makes the most impact.
- [06:57]
Eric Dick
Can you, I don't think we've actually talked about, really about the affiliate environment on TikTok. Can you kind of give us an overview of what that, what that entails?
- [07:04]
Debbie
Yeah, so TikTok essentially allows, you know, creators with a certain amount of followers to apply for their affiliate program being part of TikTok's affiliate program means that you can request samples from brands on TikTok shop in return for making content for them and promoting their brand. This allows you to monetize your content either through the video or by, you know, promoting the product in your showcase, a creator showcase. And that's sort of like the bare bones how it works. A brand can have an open collaboration set up where essentially any creator can come and request a product or, or they can be more targeted and say hey, you know, we want to look at, you know, affiliates that have made more than 10k in GMV per month and those are the ones that we want to target to send collaborations out to, to send, you know, special partnerships to, et cetera. So you, you can engage with it either in sort of like this passive way where people come to you or you can be more aggressive in pursuing a relationship.
- [08:08]
Eric Dick
And then when they're running affiliate offers for you, is their call to action your shop?
- [08:12]
Debbie
Yes.
- [08:13]
Eric Dick
Or do they. Yes. So basically they're driving directly to your shop.
- [08:16]
Debbie
They're driving traffic to a product link that does sort of is, it's the product listing but they can also place it in their showcase so it'll be alongside like a variety of products.
- [08:27]
Eric Dick
Okay. And where traditionally you used to be able to drive that to off platform to a landing page and now you can only keep it within the TikTok environment.
- [08:36]
Debbie
Yeah, that's correct.
- [08:37]
Eric Dick
Which makes sense ultimately for them. They already are succeeding at like I was saying, like taking more and more of people's time and now they're positioning themselves like a marketplace, like Amazon. Right. So why would you ever want to leave? It's, I guess the challenge is so often people aren't in that buying mode right when they're on TikTok. I guess that's, that's a big part of the challenge. People are there. TikTok is probably competing more with TV than it is with maybe anything else because that's how people do it.
- [09:02]
Debbie
It's super funny that you mentioned that because TikTok is having like a very strong sort of like live selling platform. And when you take a look at the sort of lives that are working, they do have this like very like infomercially feel where there's like a set and people have products and they're just rapid fire deals and flash sales and stuff like that. And I think on the other side of it Too is that TikTok I still feel, still right now feels like an impulse purchase type of thing. People aren't going there to buy like, you know, 50, $100, like purchases. You're looking for smaller things, not that you can't make bigger deals, but you have to sort of like build that trust on TikTok, which is a bit harder to do.
- [09:47]
Eric Dick
The live, I think is a great show we had at our event, I guess it was last year, but we did an event in Victoria and we had a guy there who was selling men's underwear. Um, but he was just blowing up lives and so everyone wanted to talk to him about how he was doing it. I feel like lives really are that kind of way into selling on the platform. Well, is that something that we're doing with clients as well, or is it something that they're doing internally and we're helping promote?
- [10:10]
Debbie
So we aren't really working with any brands that are hosting lives directly off of their platform that we do have affiliates that do lives for them. I think the, the live market is very difficult to enter because one either if you're as you. If you're a creator, I think it's a lot easier because people are used to tuning into a live for that reason. But as a brand, you essentially have to like, break a bunch of barriers and have like a very like, laid out plan. Though TikTok is helping brands do that by introducing like live GMB Max campaigns so you can drive additional traffic to your live campaign through that.
- [10:50]
Eric Dick
And then what are brands when they come to us, like, what are their reasons? What are their positions for? Like, they already have meta kind of sussed out. They've got great product market fit and they want to expand to a new channel. Are people focusing on TikTok as something they want to build for the long term? Like, what are, what are people's mindset going into working with you on TikTok?
- [11:09]
Debbie
I feel like right now I've seen essentially two groups of people. One is that they have absolutely no presence on TikTok. They're doing well in other channels, but they want to explore TikTok. Or maybe, you know, they come to us because other channels they feel like they've sort of like limited their reach, they want to grow. Or the other one is that you have people that are on TikTok already but can't essentially sustain their growth. TikTok has this habit where you'll essentially hit a viral moment and then that viral moment will take you three, four, five, six months of like consistent sales, and then all of a sudden it'll just like stop and then you'll essentially have no spend no creative sort of like influx until you hit another viral moment. So you have like these big dips.
- [11:58]
Eric Dick
And spikes in performance, which can be a challenge.
- [12:01]
Debbie
Yeah, you can imagine that being especially if you want to scale the platform and have some sort of like predictability in terms of what you can expect like for forecasting. For most brands it's feels like TikTok. I think for a lot of brands it feels like TikTok. It's just like unreliable in that sense.
- [12:17]
Eric Dick
That, that can be problematic. But again it's one of those things. I bet a lot of the people that want to be on it are maybe on it personally and seeing how what an impactful platform it is for them. And so it's like it's, it's inevitable that they're going to crack it and so like investing in it early makes sense. I think that's something we talked about on your presentation too, is there is, you know, whenever you spend on Meta, you're always spending and it's not really giving you any residual value other than the sales and traffic you might get to your website, your ability to market to them after the fact with retention. Whereas it feels a little bit with TikTok subs. Although what you just said maybe contradicts that a little bit in that you're investing in this platform and you are building an audience that kind of might, you know, will see your stuff again and again. But as you were saying, with these viral moments, if it kind of goes back down to zero each time, you've got to relaunch these viral moments. I could see it being a bit of a challenge.
- [13:06]
Debbie
I think where the magic of TikTok is, is is in community building. When you go on other platforms, I feel like you build audiences to find this community and that's sort of like how you deliver ads. I feel like on TikTok that part hasn't been quite figured out yet. Except for the brands who can have essentially like a very strong organic voice or a very strong voice in terms of how they're building their affiliate communities and that's how they're leading the charge on TikTok. And the great thing about TikTok too is that right now the platform might not be like immediately like monetizable for a lot of brands in like a long term sustainable way. But TikTok has this halo effect in terms of helping you find new customers. Just because a customer doesn't necessarily convert on TikTok, does that mean that they're not like after knowing your brand, knowing your voice knowing what you're about. They're not going to like convert on your need to see on your Amazon and whatever. And there is like a measurable sort of effect that you can see of brands that have a presses on TikTok and then stop it compared to brands who know you'll have a presence at all.
- [14:17]
Eric Dick
We shared some examples of brands doing it well and the one that really sticks in my mind and I can't get the theme song out of my head is the Pine Sol account, which is like, it's like the oldest school brand in the world. It's like, you know, my grandma used it kind of thing. And then I haven't even thought of Pine Sol or buying Pine Sol. I'm looking for something like natural, organic or, you know, scent free or whatever. But, you know, Pine Sol is just sitting there staring me in the face. And all of a sudden they come out with this like uproarious account where it's like all of a sudden it catapults the brand back into the conversation where a generation of people were kind of ignoring it even though they knew about it. Now all of a sudden, these wacky videos which you gotta go find Pine Sol is in my dreams.
- [15:01]
Debbie
After you mentioned it during the, the call out earlier this week, I looked up the Pine Sol account and honestly, like a good hour of laughs. Truly unhinged stuff.
- [15:14]
Eric Dick
Very unhinged. Yeah. Not as unhinged as Sour Patch Kids. I don't know if you're.
- [15:19]
Debbie
Yes. I was literally just going to bring up Sour Patch Kids because another one that I think is just progressively just getting better and better, but also crazier. Crazier. Sour Patch.
- [15:28]
Eric Dick
Yeah. Where they're mixing Sour Patch Kids with mustard. It's just like hideous stuff that like a, a really brand sensitive person would be like, what are you doing? But it just sticks in people's minds. And the brand, they're delicious. So I don't. Maybe they would be good with mustard. I don't know. The thing that I see all the time too these days, and I wonder how orchestrated it is, is when a brand. Or when it's like, my mom said she'd buy me this pickup truck if I could get 50,000 likes and if Ford will comment or something. Right. And so. And then Ford will be like, oh, guess that truck is yours kind of thing in the comments. And I'm waiting to. I don't. I guess you kind of need like a really established brand for that kind of thing to work. Whereas, like, you couldn't go with, you know, one of our clients that's, you know, even a $10 million company maybe because no one will, you know, you couldn't, you couldn't try to replicate those types of moments. Can you describe, like, I know we've had a few viral hits with, with the content we're making. Can you describe a little bit of the anatomy or even the kind of ads that we've made that have had viral growth?
- [16:32]
Debbie
Yes. The best way to describe it is you got to get people in like the first like two seconds. So usually the content that, that stands out, that sort of has that long term growth is either like super controversial or super shocking. One of the pieces of content that worked really well for us was we essentially had someone like open a bag of like the product and immediately just like dump it into the toilet. Like, don't buy this. This is garbage. Like this is, you know, poo, like don't eat it. And that worked really. And the rest of the video was just like, I think maybe anatomy wise, more typical to like a sale ad video where you're going into like the anti hook. But that visual hook of just dumping into the toilet super worked. Like really, really worked. Another one was, you know, we do, we work with like a mushroom coffee brand and the hook was like, hey, this, this is a ripoff. This didn't get me high. Obviously that's not the intention of the product, but it makes people stay a little longer.
- [17:33]
Eric Dick
Yeah. And that's all you need is just sometimes just that extra little bit of time across millions of views is what you need.
- [17:39]
Debbie
Yeah.
- [17:40]
Eric Dick
How much of the content that we're doing is organic and then because we're doing paid ads as well and the paid ads can still drive to external parties. Is that right? Or do they. Does everything on TikTok have to just drive to shop now?
- [17:53]
Debbie
Everything on TikTok should just drive to shop. Generally they don't really like it when you're sending traffic both off platform and on platform at the same time. I think for obvious reasons they want you to keep everything on platform. Also with the introduction now of just GMV max being your way to run ads on the platform, we actually have very little control over which ads get spent. So what we focus on and what we control is how we're talking to affiliates, how we're building our affiliate community and then finding what, you know, the platform calls high GMV affiliates. So there are affiliates that are making 150k in GMV every single month or more. And these are the ones that we want to work with. We use a tool that allows us to find these affiliates in every category, reach out to them and offer them deals and retainer collaborations to work with us and essentially solve our products. And that's super valuable, being able to find those right people, collaborate with them in terms of content, ideas, talking forms, etc. But allowing them ultimately to do what do they do best and that's to sell.
- [19:06]
Eric Dick
Yeah. Okay, walk me through. So we've got, you know, thousands of brands maybe listening to this podcast, hopefully maybe some that don't have any presence on TikTok. They want to jump on, they want to work with you. Walk me through the process of a brand that maybe has product market fit, has a strong meta Google account, hasn't really been on TikTok. Walk me through the process that you would take a brand through to get them kind of live and rolling on TikTok.
- [19:30]
Debbie
Yeah, absolutely. So I think typically we would take a look at what their sort of like organic presence is off the platform and see if we can see a common tone of voice or a way that people are engaging with them already. We also want to see if on TikTok, organically, if the platform is already mentioning them, if they're already products that might be a bit viral on the platform. There was a brand that I did an audit for recently who has zero presence on the platform and very little presence organically, but they've had a product and even and it's a product that is not even part of like their main product line that went absolutely crazy viral on the platform. And to this day people still make content about. So it's finding sort of like these little gems of nuggets that help us construct a brand voice or identity. And we start hiring creators to work on their organic content on their organic feed. There's always like trial and error testing in terms of finding what content is going to resonate both organically and in ads. So that is part of the process is figuring out what works. And then when it comes to the affiliate side of things, we start with open collaborations. You know, obviously the top products that you want to focus on, we have anybody that wants to apply can apply, but we then start Targeting creators with 10k in GMB through mass affiliates. I think we run bots that are sending out like something like 10k to 20k messages per month with detailed briefs and information about the product in a way that's easily consumable and readable. These views are kind of like our secret sauce. But I Think that's what gives your ability to have like high quality content come back. The reality is that when you're doing this kind of mesh outreach and briefing with creators, like a lot of the stuff is going to be slop and you're going to have to dig through a lot of the slop to find the gems. But briefing them and giving them support when making content really gives you your best shot for the majority of the content being like top tier and that's what we focus on.
- [21:32]
Eric Dick
Speaking of slop, how are we using AI in the process on TikTok these days at all? Or is this all human touch?
- [21:39]
Debbie
So far it is only human touch. I think AI does help in terms of strategizing for content ideas and briefing, but ultimately we, we run maybe some like chatbot automations to help with customer service on the platform. You know, some like CRM automations, but I think the human touch is still super important.
- [22:02]
Eric Dick
How are you liking working on TikTok? Because I guess you didn't start on TikTok. You've been, we've been with Pilot House quite a while now. I think you didn't start on TikTok. How are you liking working on the platform?
- [22:11]
Debbie
I love TikTok. TikTok is awesome. I think it's. The creative is great. The way that people engage with the platform is great and something that I'm really passionate about. I love that we started this department. I will say it has been a lot more chaotic than I first anticipated. They're going through a lot of changes. I think it's somewhat obvious that they're preparing for some sort of like merger or acquisition or something just in the way that a lot of the regulations and policies and updates that they're making are leaning towards. And I think that maybe adds an extra level of chaos to it. But overall it's really great. And all the TikTok reps and people that work there really are trying, working very hard. They really are.
- [22:55]
Eric Dick
I won't ask you to look in your crystal ball too, too much, but when you say that is it, is that related to like the, the threat in the US of it, of it needing to become a US company, or do you think there's something else happening where a big player might be acquiring them?
- [23:11]
Debbie
I think it probably has a little bit more to do with them having to make a deal with some sort of like US entity or corp to corporations in the US that's more likely it.
- [23:21]
Eric Dick
Where are we at with that? Is that. Was there like a. There was like a stay of execution or something. Or they're like, oh, you got another six months or something. How did that work?
- [23:29]
Debbie
Yes. So I think quite recently, maybe end of last month, maybe earlier this month, Trump I think did give another extension on that. It seems like they there is a deal in the works and things are being finalized. That's my standing so far.
- [23:44]
Eric Dick
Watch this space. Well, you'll have to come back on when that when the dust settles on it and we can Talk more about TikTok. Thanks for coming on the All Killer and All Filler podcast today. Debbie, this was great.
- [23:53]
Debbie
Thank you so much for having me on.
- [24:00]
Eric Dick
Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer co. And if you want to learn more about Pilothouse's All Killer no filler services, take off to Pilothouse Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time, Sam.