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- [00:01]
Ralph Burns
Hey, folks, Ralph here with something that could seriously upgrade your Top of Funnel ad game. If you've been a PT listener for any period of time, you know that we talk about Top of Funnel all the time and how challenging it is for you to get quality Top of Funnel clients or leads or customers and then convert them typically at Bottom of Funnel. Well, TV advertising is one of those areas that we haven't discussed here on PT all that much. But our friends over at Ad Critter have figured this stuff out. They do connected TV ads so you can be everywhere without spending millions on super bowl ads. But they pair it with display retargeting. So you're hitting the audiences with a complete approach. You reach them, then you remind them and then you collect the revenue. It's a strategy designed to deliver and let me tell you, it really works. We're testing this at tier 11 and so far the results have been very impressive. Now with Ad Critter, creating custom audiences are so easy. You don't need to reformat files, you don't need to mess around with complex spreadsheets. You just upload any file in any format and you're ready to go. And the match rate is awesome. They make it easy to connect with the right people, the actual people that have interacted with your ads in the past, and then allow them to naturally flow through your funnel so you can convert them at Bottom of funnel. Now, the folks at AdCritter, we twisted their arm to get us a great deal for you, the PT listener. They are offering a special deal for y'all, and that is you can get a $500 campaign credit, meaning $500 in free money to test out the platform or dollar for dollar matching on any TV campaign, up to five grand. Imagine the impact of that match spend five grand, then they'll add another five grand in display. That's a huge opportunity here. Now it's only offered to you, the PT listener. Head over to AdCritter.com PT and check it out. Now, our friends over at AppSumo started with one simple idea. The tools you need to grow your business shouldn't put you out of business. That's why they work directly with developers to get exclusive discounts of 80 to 90% off software, the software that you're probably going to be buying anyway. You might as well buy it through AppSumo and save yourself a bundle. In fact, they have saved entrepreneurs over half of a billion dollars since 2010. That is $500 million for those of you who can't do the math at home, some of the biggest names in tech like mailchimp, Zapier, Dropbox, all got their start on Appsumo. With a rotating selection of hundreds of tools, the ones that you're using anyway and probably paying too much for, you'll find all the software you need to make your life easier in 2025. Plus, with a 60 day money back guarantee, you can try any tool risk free. Oh my God, what a deal. Appsumo rarely offers discounts, but they are going to offer a deal here for you, the Perpetual Traffic Listener. Because prices are already so low, but we got the biggest discount we could possibly get from them anywhere. You get 13% off your first order with the code TRAFFIC13. That's right, that's code TRAFFIC13. All lowercase. And yes, you do have to spell out the number 13 traffic 13 for 13% off your first purchase. Over at Appsumo, these guys have been saving entrepreneurs like you and marketing people like you hundreds of millions of dollars since 2010. Don't miss out right now because they don't offer discounts like this. Head over to appsumo.com, enter the code TRAFFIC13, all lowercase, and get 13% off your first purchase at appsumo.com.
- [03:48]
Lauren E. Petrulo
You'Re listening to Perpetual Traffic.
- [03:56]
Ralph Burns
Hello and welcome to the Perpetual Traffic podcast. This is your host, Ralph Burns, the founder and CEO of Tier 11, alongside my awesome co host with great hair by the way.
- [04:07]
Lauren E. Petrulo
Thank you, thank you, Lauren. Ian Petrillo, founder of Mongoose Media with obviously the best hair compared to previous co hosts.
- [04:16]
Ralph Burns
Previous co hosts, that's right. Who we love but didn't have greatest hair as you do. See, we have to make up for my lack of hair with a co host that has great hair. So to see Lauren's hair, head on over to our YouTube channel@Propri ProfessionalTraffic.com YouTube and you'll also want to do that for today's episode because today we're pretty excited. This is the third in the series of three episodes we have done with TikTok. Can you believe we have these people on this show? These are the A list celebrities of TikTok and we've got them on Perpetual Traffic and we're going to grill them on all the new stuff going on at TikTok. Can you believe it, Lauren?
- [04:53]
Lauren E. Petrulo
It's super cool that we get to have this chance because when we talk to reps like we both have agencies and the reps we talk to aren't senior up in the food chain as these Two individuals who are like directly related to the products that we have questions about that we're testing. For me, it's a Goosebumps moment for sure. But when you say, can you believe it? I'm like, at this point, I'm believing it in everything. Because Ryan Reynolds is going to be on this podcast as well.
- [05:17]
Ralph Burns
So yes, he is. Absolutely. He's next. But he would be a step down, I think, from our guest today. Really as far as like the celebrities go.
- [05:25]
Lauren E. Petrulo
It's like a Canadian three star review.
- [05:26]
Ralph Burns
Yeah, like the Canadian three star review we're still reeling from. Anyway, we want to talk about that. We have gotten actually a fair number of reviews since we've mentioned the three star review and they were not three stars, by the way, Lauren. They were really good. So we'll read those out on our next show so you can become podcast famous for at least 15 seconds here on perpetual traffic.
- [05:47]
Lauren E. Petrulo
Yes, please.
- [05:48]
Ralph Burns
For our 15 plus million downloads. So the point is, is definitely wherever you listen to podcasts, leave a rating and a review and we will read it here on the air. But without further ado today, like I said, We've got TikTok on today talking about two new features in TikTok which I guarantee you don't know about. And right now is a time where you should be looking for ways to scale up your advertising. And this platform right now is exploding, especially with these two features that we're going to talk about today with two of the senior product commerce experts at TikTok. We've got Jose Villalobos and Michelle Kagler here on Perpetual Traffic. Welcome to pt.
- [06:33]
Jose Villalobos
Thanks. Both excited to do this.
- [06:35]
Ralph Burns
We're really excited for Michelle coming on, by the way. Not really you quite as much. No, I'm just kidding.
- [06:41]
Michelle Kagler
Yeah, super happy to be here. Would also love an invite back when Ryan Reynolds is on as well. If you need a third co host.
- [06:48]
Lauren E. Petrulo
Not as great hair.
- [06:51]
Michelle Kagler
I'll blend right in.
- [06:52]
Lauren E. Petrulo
Exactly.
- [06:53]
Michelle Kagler
You won't see me.
- [06:54]
Ralph Burns
That's it. That's it. Another guy with good hair. So, yeah. So let's get right into it, Lauren. Let's grill these guys on all these new features and why the PT listener should know about it. And also start utilizing TikTok in their advertising armamentarium, so to speak.
- [07:11]
Lauren E. Petrulo
For sure. I mean, like it's the start of 2025 and we've had so much success from TikTok, stuff from Black Friday, especially just after Q5. And like, I know Jose, Michelle, like you, you guys are product experts and I'm sure for you, you've seen tremendous success off of those huge holidays. Why is TikTok the platform to jump on in 2025?
- [07:34]
Michelle Kagler
I think what we've seen on the platform specifically for TikTok Shop, where advertisers are generating a lot of success, is specifically through these moments like Black Friday. So, for example, this past Black Friday, we generated $100 million in sales on TikTok shop, which is three times more than last year. On top of that, we've also seen 165% increase in shoppers year over year on TikTok shop. So I think what that's telling us is that user becoming more and more comfortable with buying directly from TikTok shop or just from TikTok in general. And a lot of that is fueled by ads, by Shop ads, by driving traffic to your shop from discovery to consideration to purchase. So I think that if you weren't on TikTok shop last year, in 2024, this year, 2025 is definitely the time to get on TikTok shop.
- [08:25]
Lauren E. Petrulo
Well, 165%. I mean, dang, that's huge growth.
- [08:29]
Michelle Kagler
I know, it's huge.
- [08:30]
Jose Villalobos
Look, I couldn't be a bigger fan of everything Michelle said and TikTok shop in particular. It's a great place to be where your clients are to be where your target audience is. And more people are on TikTok to shop than ever. It's a really great place to be. But Even outside of TikTok shop, we're seeing a ton of commercial activity happen, not just over Q5, but really like Black Friday Cyber Monday. It's been a real gangbuster couple of months for us and we're really excited about this opportunity for advertisers to really share authentically their story. And we've seen a lot of success with Smart plus a lot of success with Spark ads, which is our creator first format. And yeah, really excited to share more with you all and additional people who are looking to share their story on TikTok.
- [09:11]
Ralph Burns
So for those of our listeners who don't know what TikTok shop is like, I told you guys, I go for the guy that's never used it. They're on meta, they're on Google, they're on all these other platforms. Maybe they haven't integrated TikTok in specifically. Who is it for? Tell us just a little bit of background. If this is the first time you're hearing about TikTok shop, well, shame on you, first off. But secondly, I'm not going to shame you, but we are here to educate you as well. So maybe just give us a high level overview of what it is, what you need to be, how you set it up, all that sort of stuff. Just very high level.
- [09:46]
Michelle Kagler
Yeah. So TikTok shop is basically helping businesses create a net new e commerce channel. So it is a new sales channel similar to your website, how you generate sales there. It's an additional channel that you can generate sales that's integrated directly into TikTok. So it's not just an endpoint. So don't just think of it as one place to make a purchase or one place to sell, but it's really an entire ecosystem that runs on different user behaviors. So TikTok shop really gives you access to tools and products that make making sales on TikTok a lot more easy. So you have access to things like the affiliate program, which is a huge network of TikTok talk creators who are finding your product, promoting your product, and essentially helping you drive sales of your product. But we also have live shopping, so you can go live and you can actually have users buy products directly from your live streams all the way down to like unique product pages and obviously shop ads, which is a key driver of growth for any TikTok shop. So it's really a new sales channel for any e commerce advertiser or seller who wants to unlock more sales and tap into the unique power of TikTok as a platform.
- [10:59]
Ralph Burns
I think one of the biggest things that we do this as a service, we have a content creator service, but so many businesses that come to us and, or just in general, they don't have somebody to actually sell their stuff online and then it's like, all right, I gotta go find these people and all that other sort of stuff. Tell me about a little bit more about the affiliate program because that's. I don't think people realize that even exists inside TikTok shops.
- [11:22]
Michelle Kagler
Yeah. And I would even say that the affiliate program is probably one of the most unique factors of TikTok shop and also one of the strongest points. So the affiliate program is basically you put your product, you make your product available to TikTok Shop affiliates and there are certain criterias that you need to have in order to sign up as an affiliate for TikTok shop. So we've kind of already vetted the super small creators and it's just a great program for working with content creators to promote your product through the platform. How it works is you add your product to the affiliate marketplace and then affiliates will find your product and then Create content and tag your product directly into their content and then they publish it and then it appears in users feeds and then users can click on that product and purchase it. And you're basically just paying a commission rate that you set for every product that is sold through that creator's content. So it's really low risk because you're only paying per sale, which is great. It's also great because you're basically outsourcing your creative content generation, which works to your benefit when you want to run ads, because you can use that content to then fuel your ads. So it's an extremely powerful program and product within the TikTok shop ecosystem. And you do have to do a little bit of work to find creators to promote your product. So there is that initial sort of cold start reaching out to creators and there's lots of unique ways that sellers do it, which I can talk a little bit more and give some sort of insider tips if that's interesting. But yeah, I think the affiliate program is Chef's Kiss.
- [13:00]
Ralph Burns
Yeah, I mean, that's killer. I knew there was an affiliate program, but I didn't realize that that was the solution here. So you talk about like the cold start and then it sounds almost too good to be true. It's like, you know, you post it, you post your product and then affiliates come to you. Or is it more the seller going after the individual affiliates? Like, how does it kind of work as far as how to pair the product with the right influencer slash affiliate out there in the marketplace?
- [13:28]
Michelle Kagler
It's kind of a little bit of both. So you put your products on the platform and then affiliates can find your products. But you may need to, depending on, you know, where you are in your life cycle of being activated on TikTok Shop, you may need to do a little initial effort in the beginning. So, for example, like some tactics that I've heard some advertisers do is like finding the affiliate in their feed and then going to their videos and commenting and being like, hey, I'd love to collaborate with you. And another thing I would recommend is not focusing on your strategies that you've used on other platforms and bringing them to TikTok shop and specifically with affiliates. What I've seen a lot of advertisers do when they first start with TikTok Shop affiliate, they'll say like, okay, the creator needs to have at least 10,000 followers and they need to have like certain engagement rates and they have all this very strict criteria that they would have on other platforms. But that doesn't really work on TikTok. What we've seen work really well is micro influencers. So those really small influencers that you never would have thought would have kind of like helped you generate sales, all of a sudden become your top selling affiliate. So I would say like, when you're coming to TikTok shop and you're thinking about the affiliate platform and the affiliate program in general, keep an open mind. You know, don't take your previous experiences with other affiliate platforms to TikTok shop because you really never know who's going to blow up your product.
- [14:53]
Lauren E. Petrulo
And so win win, you have a fleet of sales agents that are promoting your product and they're getting paid for it. Like with other. I mean, we've worked with TikTok affiliates, Ralph, and we've worked with affiliate programs and influencers alike. And there's not the tracking component. So what I have found really powerful is when you've got the shop set up, that seamless coordination, that negotiating aspect, like that's really difficult for a lot of brands that we've worked with. And because you set up the commission rate, you have all of that tracking enabled to empower the creator to make the money that frankly they're due because they created influence. And then the seller, the brand owner gets immediate impact on the sale. And because you're paying on a per purchase, it's almost this magical paradise of advertising.
- [15:42]
Ralph Burns
And then you can use that content because you then own that content for that micro influencer, in this case for your paid ads, for your paid traffic, as you own the.
- [15:51]
Michelle Kagler
Exactly. Yeah. So. Well, you don't necessarily own the content. You still need to get authorization from affiliates. But most affiliates are willing to give that authorization because when you run ads on their content, they're also winning as well because they're getting more traffic to their content, they're getting more sales, they're getting more views, and that's really what affiliates care about. So it is a win win. And especially on a platform like TikTok, and I'm, I know, I'm sure Jose will talk about this as well, is like creative volume, like being able to test and scale creatives on TikTok is very important. It's kind of very different than other platforms. Like you need to have a good amount of creative volume coming in that you can constantly test. And when you're working with affiliates, you have access to a huge volume of content that can go into your advertising campaign. So it's really a win win.
- [16:39]
Ralph Burns
Yeah, yeah, it is. We've talked about influencers and sort of the levels of influencers a couple of times on the show here. Lauren, as you know like so many brands come to us is like so I need to get like the big influencers and the big influencers are first off expensive. The mega influencers, the macro influencers, like the Kardashians of the world, the rocks of the world, like forget those people, those are for the big brands but we found is like the mid tier micro and even like the Nano influencers, those are the ones that actually have very close knit groups. They don't sell a whole lot of stuff. So your product is fresh and they haven't burned out their audience. So it's like those micro influence between like what, 10,000 and 50,000 followers I believe. And then below that is nano smaller. It's like those are the ones that's the sweet spot oftentimes. So don't think so big think niche and the type of influencer that is in direct relation to your product.
- [17:33]
Lauren E. Petrulo
You don't have to be an influencer to be influential. Yeah, that's the key component when you have a smaller audience. I have found those micro and even Nano influencers are more authentic in their ads. They're more genuinely interested in a long term relationship because they're the start. Whereas when you get into these higher influencer counts of 500k plus they have management and they have more people that have their hands in the pot. And so like at least with this, what we're talking about is if you've got a shop directly connected they can tap into your products, become your sales agents for you and then you can pay them a commission. You're not having to pay per video, you're not having to set up expectations on how the video performs and have all these dialogues back and forth. But that specifically is only for the commerce stores with shops.
- [18:21]
Michelle Kagler
That's right, yeah. So it's only available within the what we call closed loop ecosystem on TikTok which is the TikTok shop part. And we are thinking about ways that you can use that content also to power your other solutions like power driving traffic to your website. Now those don't exist today but we've heard what advertisers are asking us and we're exploring ways that we can help solve the needs that we aren't able to fulfill today with the current solutions.
- [18:48]
Lauren E. Petrulo
But Jose being the product expert. So like Michelle's all about shops and that direct closed loop side. But Jose, you support those that don't have shops because let's be real, a lot of people that aren't advertising on TikTok in 2024 they can't set up the TikTok shop and we'll have resources to help people out but it doesn't mean that there aren't still a whole host of resources. And Jose, you really help drive off platform to web experiences. It's like amazing. We have like the two leaders on the shop and then the website of commerce support. So if you're an e commerce store owner or you're working with e commerce clients, have these humans on LinkedIn and try to be their best friends because they are at the tippy tops of this pyramid.
- [19:29]
Jose Villalobos
Yeah, thanks Lauren. That was a really good tee up for something that's important to me which is helping all commerce advertisers in between. Michelle and I, we really are here to help make sure that any Advertiser on and TikTok is able to find their target audience. We're really excited about the opportunity in front of us for 2025 TikTok shop is a really great way to find people that are interested in your business and on site they find, they discover, they purchase straight up TikTok and as a business you can make your shop, you can advertise and measure all directly on platform. But for many businesses they still want to share their story on websites, they still want existing platforms where they can tell more compelling narratives about what their solutions are and have richer product detail pages or maybe even different ways to reach their audience. And so we've built Smart plus campaigns as a solution to make that more performant and easier on TikTok.
- [20:25]
Ralph Burns
Well that leads to our next question then. So tell us about some of these new features, Smart plus being one of them. Obviously TikTok shops, if you've got a commerce store, I think it's kind of a no brainer to do that, especially with the affiliate program which is absolutely killer. So we'll leave links in the show notes for all this stuff by the way over@perpetualtraffic.com but maybe just tell us a little bit about some of the newer features. So Smart plus specifically, that's one that you're kind of a product expert on, so drop the guts.
- [20:52]
Jose Villalobos
Yeah, I work on Smart plus campaigns which just launched in October and let me give you a little bit of history here. So I've been in the digital ad space for a little bit and we've tried to add so many different features, different parameters to allow businesses to really set up their campaigns in the way that's most meaningful for them. But that's made it really tricky to successfully advertise on campaigns. Sometimes there's so many different parameters you need to tweak. There's so many secrets to success that you really need to learn to be performant on all these different platforms. So what we're doing with Smart plus campaigns is trying to really simplify by ensuring that you have only a select number of parameters, only the ones that believe most matter to your business. And then in the back end we're really leveraging a large amount of AI. All of the different AI solutions available on TikTok performance advertising are built in straight into smart plus campaigns. So you get all the benefits of all of our AI and best practices for free. We're really excited about this. It's right now one of the easiest and most performant ways to reach people and drive them to your website on TikTok today. So really excited about the success we've seen over these last couple of months. Black Friday, Cyber Monday as well as Q4.
- [21:57]
Michelle Kagler
5.
- [21:58]
Lauren E. Petrulo
Smart plus is using AI for easy campaign setup where if you're a commerce store and don't have a TikTok shop, which is again sorry Michelle, but that's like the hardest part. I mean all that stuff, if you don't have your shop set up, set it up. But Jose, you're saying like with Smart plus which we've talked about in since October, I mean all the case studies that keep coming in are just like mind boggling but it's easier, it's leveraging AI and it's tapping into new markets and all opportunities for media buyers where it's like other places can be complicated. The Smart plus is the one where you don't have to have a shop, you can go straight to the website. And plus there's ways to do it beyond just e commerce. But Smart plus is like your go to automation right now for campaign setup.
- [22:42]
Jose Villalobos
Exactly. And the one thing I'd like to build on which Michelle really touched on TikTok is a content first platform. Authenticity for us is the name of the game and in Smart plus we want to make it easy for you to authentically express yourself. So we're powering it with all the features available to to tell your story. One of the biggest success stories has been Spark ads which are these creator first stories that businesses are using to authentically reach their audiences. And it's been really compelling to see how Spark ads and Smart plus has been a winning combination for businesses driving customers to their website. So on top of performance, we really want to make creative made easy. We know that to be successful on TikTok sometimes requires a large amount of creative and really quality creative, and we want to help make that a little bit easier through the solutions we're offering on Smart Plus. We're really excited about our roadmap, but a lot of what we're doing behind the scenes helps your existing creative last for longer.
- [23:37]
Ralph Burns
So Smart plus, we'll leave links in the show notes, obviously, on how to use it, but it's like, I hate to say stupidly simple, but it seems like it's stupidly simple. Are there any drawbacks to it? Because, like, we always talk about the algorithms for all the individual platforms and trust them to a certain degree, but still have an element of human control. Having said that, with Smart plus, somebody said, yeah, that just sounds like another AI platform where they're going to steal my money. All right, that is the perpetual traffic listener, the ones that probably give us three star reviews, Lauren. That's what they probably say. So it's not representative. But what are the upsides? What are the downsides? What are the sort of the keys to success when coming to use Smart Plus?
- [24:18]
Jose Villalobos
Yeah, that's a great question. So the beauty of leveraging AI behind the scenes to help automate your ads is that we're able to leverage these incredible systems to tweak and optimize campaigns in the back end without you having to touch any buttons. And that makes things a little bit more simple for you to not have to tweak the myriad number of ads that you have to ensure you're getting the right performance. We try to do that on your behalf as much as possible. So you could just focus more at the campaign level, at the creative level, which are really more, I think, what a lot of businesses are trying to control. Instead of making decisions at the daily, hourly, minute level, these are really making decisions on which ads are performing best, how to scale budgets to the best performers, which ones aren't working and maybe need to be paused at the microsecond level. And you benefit from all of that through better performance. And as we learn more strategies to ensure that you can get more success, you get that for free as you continue to use Smart plus with no changes, no tweaks needed on your end, which is how we've been able to feel so much success for advertisers to date. We've seen in our closed betas a lift of 53% on return on ad spend for advertisers optimizing for value when they use Smart plus relative to when they use their business as usual setup. On average, 70% of advertisers benefit whenever they use Smart plus for their performance KPIs relative to their BAU. So we absolutely think it's worth trying. Some businesses right now don't always feel comfortable giving up such a high degree of control for Smart plus companies.
- [25:45]
Lauren E. Petrulo
Of course not. They're like, I don't want to trust the platform. The platform's just here to make money.
- [25:50]
Jose Villalobos
And we totally get that. We have all of the existing metrics and reporting available so you can verify that it works for you. But at the same time, we still have manual campaigns there in case you really want that higher degree of control. But it's definitely worth testing and seeing if it makes sense for you.
- [26:04]
Ralph Burns
With everything that we ever talk about here, whenever it's something like you've got business as usual campaigns that are performing for you, you set aside a certain small portion of your budget, maybe 10% or less, and test out these other areas because this is the future of all the platforms. The point is, if you're getting the results that you're talking about here, like 75% improvement in performance, there's some significant ceiling there in addition to what you're currently doing. And I think it is a fine balance. And we always sort of say this, it's a fine balance between you controlling and also letting the algorithm do its work. So figure out where that balance is for your business. And with something like this, that's a new tool, we always say test it out and test it with a smaller budget than what you're doing when your business uses usual campaigns. But at least it's there. If you're on TikTok, you might as well use it anyway. Is that safe to assume? Is that how you sort of advise folks who are dipping their toe in the water?
- [26:57]
Jose Villalobos
Okay, I'm a big believer in test and scale, measure twice, cut once kind of philosophy here. And while I'm happy to share that we have tons of advertisers that are spending 100% of their budget on plus campaigns, that doesn't work for everyone. A slow and steady approach makes sense for most advertisers. One thing I'm excited about, we've just started the slow release of Smart plus self serve split testing. So really just test it out for yourself, trust the data and see where it goes. If you have any feedback, feel free to reach out. We want to make this better for you.
- [27:27]
Lauren E. Petrulo
But Michelle okay, so we're talking about Smart plus, which we were excited about. We dropped an episode about this with Jose before. But Michelle, you are specifically, like, all about this GMV Max, like, there's an additional automation tool going back to the shop side of things. We're like, okay, Jose, yeah, like, Smart plus is amazing. Lots of stuff to check. But it's not the only automation tool that's come out and like, it's one of the more powerful ones to come into 2025. The number of people that have ever left us three star reviews is probably the number of people who have ever. Sorry, I'm gonna keep bringing up the three star review, but it's probably the number of people that are familiar with.
- [28:01]
Ralph Burns
What G mansplaining is. You're a mansplaining, ma'am.
- [28:04]
Lauren E. Petrulo
I. Ma'am, ma'am.
- [28:06]
Ralph Burns
Explaining.
- [28:06]
Lauren E. Petrulo
Explaining. What is it and why is it the bee's knees for 2025?
- [28:11]
Michelle Kagler
So first, let me explain maybe what GMV means, because the feedback that I've gotten from a lot of advertisers that I've spoken to is they're not really familiar with that term, which makes sense because it's not a typical advertising term. So GMV stands for gross merchandise value, which is essentially how a seller measures their revenue. So we could also just say revenue. GMV Max, it's got that ads component, but it's also got that organic component which makes it extremely unique. There's really no other solution on the market that does that. So you're really getting incremental GMV or incremental revenue for your shop just by using GMV Max to promote your products. So a couple of really cool features with GMV Max that a lot of our advertisers love. The first is it's extremely easy to use. So whether you're experienced in advertising or not, like, setup is one and done. Like, you have three inputs, you set an ROI target, you set your budget, and you decide what products you want to promote. And that's basically it. And then what GMV Max will do is it'll look for all existing creatives within the TikTok ecosystem that have that product linked to it. So if you're working with affiliates, this is really great because all that affiliate content that you have is now getting pulled into your ad campaign automatically, and it's testing and scaling those creatives in a much faster way than any human possibly could. So very similar to the. To what Smart plus is doing, like, being able to. I think, Jose, you said something really Interesting. Like was it micro testing or nano testing or something along those lines, but basically able to test, scale, pause, you know, whatever your manual operations would be for creatives, but doing that in a much faster and much scaled way. So the creative automation is definitely a huge benefit for a lot of advertisers. But the other thing, which I think is a really new concept for advertisers is really what, what GMB Max is operated under like a cost cap, which means that you set a target ROI and it will only spend if it can reach that ROI target. But what essentially that's guaranteeing you is let's say you set an ROI target of 3. Now remember, this is a closed loop environment. So that ROI target of 3 is basically translating into I don't want to spend more than 30% of my TikTok shop GMV on ads. So regardless of the day and regardless of how your shop is performing, you will always only spend 30% of your GMV on ads. So if you're extremely conscious about overspending or you really want to make sure that your spend is efficient, then that gmv, GMV Max can really help you do that. So it's ensuring that you're always profitable regardless of external factors.
- [30:57]
Lauren E. Petrulo
So it's a campaign type. So because you said you could use all the available creatives, this is a shop only if you don't have a shop enabled because it's a closed loop environment. But it's a campaign where you're not having to set up the creative, it's sourcing all creative that's available in the TikTok universe related to your product, that's tagged to your product to be able to push that. And the part, Sorry, I'm like, what do you mean this is helping organic? Because I know there's a pay to play system everywhere else and you can boost an app and you can try to like get in front of each other and. And they don't work. What?
- [31:33]
Michelle Kagler
Yeah, I know. And that's a component that has been very difficult for people to understand because again, something like that doesn't exist on the market. So if we go back to the objective of GMV Max, it's really to maximize GMV for the product or products that you're promoting. And the way that we do that is by optimizing your paid traffic to get as much GMV as we can from your paid traffic, but also optimizing your organic traffic to ensure that we're also getting as much GMV from that source from organic sources. All under your ROI target. So we're really trying to reach that row ROI and maximize your GMV by optimizing all available traffic sources that we can because we want to provide you with incremental gmv. And one way by doing that is by making your ad campaigns more efficient, but also by tapping into more organic traffic. Again, because we're trying to maximize GMV for the total shop. And that's why ROI is very important to understand that it's different from roas because ROI in this instance is total GMV for the products you're promoting divided by GMV max spend. Whereas with traditional ad campaigns, you're really only looking at ad GMV divided by ad spend. So that's kind of the biggest difference between running like a Smart plus campaign or running a standard shop ad campaign where GMV max is really taking into consideration your organic performance as well. It's a little bit of a learning to understand. But what we're seeing is once advertisers adopt GMV max, they typically start by only putting like a couple of their products. They're not investing all of their shop ad spend into GMV max. But once they see the power of GMV max, they quickly move majority of their budget, 100% of their budget over to GMV max because they're getting more business, they're getting more sales, more revenue, their bottom line is growing.
- [33:25]
Lauren E. Petrulo
This is your mer. This is your marketing efficiency ratio. This is exactly.
- [33:30]
Michelle Kagler
Yep, exactly.
- [33:31]
Ralph Burns
Okay, hold on. Just your reaction. I'm sorry, I got to get a reaction on that as well. Like, holy cow, I didn't realize that that was even possible. Now the other guys, I'm not going to say who they are, but you can guess. Like, they separated out by like, if you have good tracking, you can see organic versus paid, but you're talking about the entire ecosystem together, which is what we talk about so many times. Marketing efficiency ratio, media efficiency ratio, Depending on how you sort of break it down. That's exactly what it is. And it goes back to our original premise here on the show. What we like as two or 11 marketers, we always say like in app or ROS, don't really trust it because you don't know really where the sales are coming from. At least inside the TikTok system, you are looking at both organic and paid. So right off the bat, it's far more efficient. And that's why you're saying ROI as opposed to roas. That's insane. That's so cool, right?
- [34:26]
Michelle Kagler
It is really innovative and I think that's what's so exciting about TikTok today. And like where we're going in the future is we're really bringing innovative solutions. So it's such an exciting time just for like Jose and myself. We're really working on like incredibly forward thinking, very different products within the advertising ecosystem. So it's really exciting. One thing I will say about GMV Max, which has been a bit of a learning for advertisers moving over, is that advertisers really want to hone in on like what is my ad roas, how much performance is my ads driving. With GMV Max, we really want you to take a step back and just look at your shop performance and your GMV Max performance holistically. So we provide blended reporting so we don't have that breakout between paid and organic. And the reason being is because we're not pushing one or the other, we're working very dynamically to see like, where do we need to improve organic, where do we need to improve paid so that we can deliver that ROI target that the advertiser has entrusted us with. So a really important thing to call out when you do go to test out GMB Max for the first time, you know there's going to be a little bit of like uncomfortable learnings that you might need to make. But once you see the power of it, I mean your numbers are going to speak for themselves, right?
- [35:36]
Ralph Burns
Does the paid help boost the organic? Do you get some kind of lift when you do the two of them together or it's hard to say because you're basically, you're throwing it all in one bucket. Like what's your sense as far as like how the algorithm works with it?
- [35:50]
Michelle Kagler
What GMB Max does is it looks at how organic content is performing and it'll look at where the threshold is for that campaign's roi. If it needs to improve traffic to a specific organic piece of content in the feed, it will do that to maximize GMV coming from that organic piece of content in order to reach that ROI target. So it's doing a little bit of both. It's improving your organic performance and it's also improving your paid performance.
- [36:17]
Ralph Burns
That's cool. Sorry, just saying.
- [36:20]
Lauren E. Petrulo
I was like, wait a second, Jose. So if you're using this revenue maximizing advertising opportunity, a lot of people are shifting their budgets like so something to start testing and then you start to see like the greater success on that channel. But then like Jose, do they also use smart plus campaigns in addition to the gmv or are you Just shifting all your budget to your GMV campaigns because it's a blended automation tool.
- [36:43]
Jose Villalobos
Well, I think our perspective is you should meet your audience where they are. And right now we know that they're both on their website and they're on TikTok shops. And increasingly we're excited about how many people will be discovering and transacting on TikTok shop. But it's always important to be everywhere your clients are is one of the truisms that I've learned about marketing. And so we still see that Smart plus campaigns are an effective part of people's advertising mix because people are still going to websites, reading reviews, they feel they build up, they have accounts with specific websites that they trust and love. So we see these as two secret powers for businesses that really want to reach this TikTok audience where all authenticity is core and performance is critical. And that's what we hope people are trying out in 2025.
- [37:29]
Ralph Burns
So let's talk specifics here, you guys. Obviously you're commerce experts with TikTok, but maybe let's talk about for us right now, health and wellness. Health and beauty is a big deal right now in Q1 and obviously the first quarter of any year is huge in that space. Can you talk to any case studies or specific performances that you've gotten through using some of these tools in the past three to six months or maybe through the beta version? Talk to us about specifics.
- [37:59]
Jose Villalobos
Oh, it's such the right time to be thinking about it. I know I've already exhausted a little bit more of my wallet than I should have in that new year New me mode. But one of the things I'm excited to share, it's very timely. We actually had a case study from a client called Good Protein who use Smart plus as well as Spark ads. These creator first authentic advertising formats with an emphasis on these maybe more micro influencers that are sharing their own recipes, sharing their own reviews, giving their own responses to comments on the brand's website to more authentically connect with their audience and leveraging Smart plus to just throw all these videos into a campaign and let us figure out which one of them are resonating most with their audience and scaling the ads appropriately. And it's been a big success for them. They they saw about a 28% lift in return on ad spend. 20% roughly lower CPA. But really most importantly is that they found it to be a critical tool for helping them scale budget. I know that so many. One of the most common things I hear from Commerce Advertisers day by day is, hey, it works for us here. But when I try to add more budget, it's not really sticking to the plan. This solution helped them to both hit their target KPIs while still growing. So we're really excited to see them win. And it's a big client in the health space. So yeah, that's one thing I'm excited to share.
- [39:20]
Ralph Burns
In that case, when they were scaling, they got initial results with some of the other platforms. We noticed at a certain point when you just continuously add budget, we call it budget scaling as opposed to, it's really sort of vertical scaling as opposed to horizontal scaling. Horizontal scaling is when you pick different markets, different niches, different messaging and then that's how you scale out from just the market that's buying you for one specific purpose. When you scale up some of these budgets, what are some of the tips and what are some of the insider knowledge that you folks have as far as is it just straight up adding budgets? Is it more creative? What's the key to scale when using these tools?
- [39:56]
Jose Villalobos
Well, it starts by letting Smart plus have as many levers as possible. How many? We call it degrees of freedom internally, but just as much space to explore the target audience that you really want want that is really critical to your business as well as as much space to explore creatively. So we just say stick it all in there and allow the deep AI to learn what sets of combinations of creative to specific audience really work best. So that's the first trick here is just allowing the AI to explore as effectively as possible. The more data you give it, the better it can do for you. I think that's another thing we've learned over time with big data and AI. The second thing is really lean into authentic creative and stories that most matter to your business. Business it's really important. Again, you've heard from Michelle, you've seen from Good Protein that what's really resonating is hearing directly about why this product matters to your audience in the most relevant way possible. Increasingly that means creators, but do what makes sense for your business. Good Protein shared recipes on how to leverage their protein powder to make shakes, they shared user reviews, and that seems to really matter and helped customers feel more confident through their customer journey. The last thing that we're really excited about over here is using Smart plus and catalog ads. Catalog ads are a really great way to tell a product first story, leverage some new product delivery capabilities. So show the right product to the right person. Smart Catalog ads has also Been a winning recipe for businesses that have a number of different products want to use more of an always on strategy for their campaigns while still scaling budgets as they see success. So I'd say those are the three tricks and tips top of mind for me these days.
- [41:34]
Lauren E. Petrulo
So there's just a lot of campaigns. I'm like, I'm thinking of the person who's probably not advertising yet on TikTok or they're advertising a little bit and it's like, okay, you can make campaigns for Smart plus, you can do Smart plus catalog, you can do a GMV type of campaign. For the person that's just going to start. I was just asking Michelle and then Jose, so the person who's just starting like, awesome. They've got their TikTok shop set up and this is probably going to be like an uncomfortable question, but I'm going to ask it anyways. Michelle and then Jose, the E commerce brand is $200 a day. Where would you recommend that they kickstart their $200 a day, start testing the viability of TikTok as a channel? Like what would you recommend? Michelle, they've got a TikTok shop. Where would you recommend that they put that $200 and what is that time frame to give it a fair amount of evaluation? Because this is a new platform, the pixel is not seated. There's obviously a grace period. You can't just turn on and expect TikTok to become an ATM overnight. That's not what we' say. Just the person who's listening who's looking to do it. Where would you start with their $200 when they have a TikTok shop approved?
- [42:35]
Michelle Kagler
Yeah, so I would definitely start with GMV Max. The beauty of GMV Max is that it combines all of our shop ad formats into a single campaign. So if you're familiar with our shop ads, we have video shopping ads which are basically video ads that appear in the feed, but we also have product shopping ads which are basically the product card images that appear within our shop tab on TikTok or within like search results. So they're two different types of ad formats. And when you're running a GMV Max campaign, we're basically automating the creation and promotion of both of these ad of your products in both of these ad formats. So that already off the bat is a great place to start because you don't have to think about having a separate budget for a PSA or vsa. You can put one budget into a single campaign. The second thing I would consider is making sure that your ROI target is reasonable because that's ultimately going to determine how much you're going to be able to spend. So if you're not generating, you know, thousands of GMV on TikTok shop yet, then you probably don't want to have like a 5 ROI target because it's not going to spend and then wants the five.
- [43:45]
Lauren E. Petrulo
They're like give me 40 times return employees. But reasonable is a huge component. So reset it 5. If you don't have it there, you can build up towards where you start. What is a reasonable start?
- [43:58]
Michelle Kagler
I would say start around maybe a two. Maybe a two. But remember, this isn't return on ad spend, this is return on investment. So you're really saying like if I'm putting in $200 and I have a 2 ROI, then I want to see $400 in GMV. I would approach GMV math less of like an ROI and more of a gmv. Like how much GMV do I want to generate? And then put your ROI that way. Don't let your traditional advertising lessons in life guide how you set up a GMV Max campaign. Try and think about like how much GMV do I want to generate for my TikTok shop and then let that guide your ROI setting because these are.
- [44:36]
Lauren E. Petrulo
New customers you're likely attracting that you'll be able to ROI even stronger on the return. Whether you have subscriptions or email campaigns, SMS campaigns, you bring in lunar New Year sales that are happening in a few weeks, whatever those pieces are, that's where you're trying to set again. And Ralph goes back to NPIs. What is our marketing efficiency ratio? Like, what do we care about? At the overall halo lift to your brand success, where is that revenue coming in? So a 2 is a conservative place to start. That's where you would do GMV campaign. You put the $200 there. Again, we're not holding you accountable to this. This is just, just where you would go.
- [45:10]
Michelle Kagler
But now, Jose, that's what I would do.
- [45:12]
Ralph Burns
It's reasonable.
- [45:13]
Jose Villalobos
Okay?
- [45:13]
Ralph Burns
Start lower. Don't expect a 10x overnight. But if you put in 200, is it 2 or 200? Is it technically for GMV max, your.
- [45:24]
Michelle Kagler
ROI target would be 2 and your budget would be 200.
- [45:27]
Ralph Burns
Got it, got it.
- [45:28]
Lauren E. Petrulo
So I know why you're saying that.
- [45:30]
Ralph Burns
I know, I'm just, just making sure.
- [45:32]
Lauren E. Petrulo
We're just making sure.
- [45:34]
Ralph Burns
No, no, but remember, if you tuned out the first part of that, that's actually 200% ROI on ads and organic with GMV Max, which is very, very cool. I'm still sort of wrapping my head around that because I've never heard anybody talk about that before. So start low and then scale up as you see success. Is that typically how you would do it? Test it out at 2 and then, hey, maybe I can get it to 3, maybe I could get it to 4. And then you probably reach some kind of diminishing returns at some, some point in time. Is that a safe way of utilizing it for the first time?
- [46:06]
Michelle Kagler
Yeah, exactly. And you could think about it like, when should I start scaling? You should start scaling when you start to see that your campaign is actually spending your entire budget. So you could even set like a $5,000 budget. And that doesn't necessarily mean that it's all going to get spent, because it's only going to get spent if we can achieve your ROI target that you've set, which is basically a percentage of your GMV going into marketing spend. So if you notice that you're spending like $180, then that's like, oh, hey, this is working really well. I can either increase my ROI or I can stick with my ROI and increase my budget and try and scale that way.
- [46:43]
Ralph Burns
Okay, yeah, that makes sense. That's super tactical.
- [46:46]
Lauren E. Petrulo
Wait, that's so good though. It's like you're looking at it and you're like, how do you scale? You can scale of. Are you trying to acquire net new customers? Have you found yourself a profitable range? Because if you're willing to keep that lower roi, you're going to penetrate a lot more opportunity. But then if you're like, okay, I need to cash flow right now because of a big order I need to do, then you can scale up what your ROI number is. I mean, it's empowering the brand owner to make decisions based off of where they can. Because E Commerce is such a cash strapped business that you can create a bigger Runway where you have net new customers. And if you know that you're converting, you know the lifetime value, you know all the other MPIs, Ralph. Right. You get to set that up for success for scaling long term or scaling short term, depending on what you need.
- [47:29]
Ralph Burns
Yeah, 100%. And you need to know your numbers at the end of the day, like this is truly, you really do need to know your numbers and you need to know your returning customer rates, you need to know your ltv, you need to know what your average order value is. All of these things, which we preach all the time, which if you have not gotten Your MPI checklist, for crying out loud. Go over and get it right now@perpetualtraffic.com MPI Lauren how many times have I think said that because it's so important?
- [47:54]
Lauren E. Petrulo
Only once today.
- [47:55]
Ralph Burns
Only once today. But it hundreds of times before because the business metrics are the things that really matter here. And that's what's so cool about GMV Max. And I'm not trying to turn this into a TikTok commercial, but I'm just saying like, I've never heard of any platform doing that.
- [48:07]
Lauren E. Petrulo
So that's literally slacking to my team right now just being like, okay, I can't believe I'm so unfamiliar with GMV Max. We've got TikTok accounts that have influencers on payroll creating content. And I'm just like, oh my gosh, they could just pull in all that stuff. We don't have to keep chasing those things.
- [48:26]
Ralph Burns
Us too.
- [48:27]
Lauren E. Petrulo
I'm just going to slack and be like, fix this right now. But all that is only for those with shops. So Jose, in Italian we say tocca te, which I know is not the same, which means your turn in Italian. But so it's actually something very different. But your turn. How would you take it for $200 for someone who's just starting, they're an E commerce brand. They don't have their shop set up for whatever reason, likely because they need to get on it. But do it. But okay, where would you go? Where would you go?
- [48:55]
Jose Villalobos
Totally path of least resistance. Advertise on the platform that you already have set up. If you do have a shop. Michelle's told you all about what to do if you have a website. And if you have a website and you're really trying to get your customers to visit your website, Smart plus is a really great solution. But like, let's start at the fundamentals. What you really want to do is make sure you have your pixel set up. We want to make sure that we're able to like optimize and measure effectiveness for you on the outcomes that really matter. We'd love if you have the ability to make a catalog to get one set up so that you can inform your ads. You can build ads that are sharing these rich product first creatives in formats that are really shoppable. Lastly, creative is key here. I'd work on figuring out what kind of organic messages really work well before starting up with advertising. So this successful strategy for reaching the people that are already connected with your business. And from there, when you have $200 to spend. If you're choosing between Smart plus or a custom campaign, as we call it, a non Smart plus campaign, highly recommend going the Smart plus route. We've designed it so that it can avoid a common problem that small businesses have whenever they face smaller budgets called cold start. So you optimize for the result that matters to your business, let's say purchases on your website. It's very rare and it can be very expensive to get these. So sometimes the campaigns don't deliver effectively. We're actually building strategies into the backend in Smart plus to help businesses overcome this. So it's definitely worth trying out. Making a Smart plus campaign is as simple as about eight fewer steps. Eight or seven last time I counted. You can choose whether or not to turn on your catalog and if so, it'll automatically set up carousel ads on your behalf. So images from your catalog sharing your product will be created as a format in your campaign. It's all automagical and done on your behalf. From there, pick the audience that matters most to you. We allow you to select your geography and location. Just be as broad as possible while still selecting what matters most for you. Set in your $200 budget the KPI that matters most to you. Select your creative and then you're done from there. That's really what we'd Recommend for a first time advertiser with $200 budget. Creating a smart plus campaign as well as just make sure that you're measuring and monitoring as effectively as possible. One trick here is that we do find that the learning phase for automated campaigns can be a little bit longer, something close to seven days. So there's certainly a little bit of a trust factor that we have to overcome. But if you give the campaign five, seven days, we find that it really kicks in around that fifth day and should hopefully deliver what you should expect on a go forward basis around that time.
- [51:31]
Ralph Burns
Super helpful. Well, I mean this has been educational to say the least. Shocking in some ways because we don't usually hear some of the things that you guys have said today with guests that come on the show, especially talking about the platform. And if you're listening and you're like, oh my God, perpetual traffic has now become like a TikTok shill. Well, you know what? New stuff matters. And I think as we continue to progress, you as a business owner need to start looking at all the other platforms. TikTok in particular especially. We talked about commerce today. We've got two of the top commerce specialists at TikTok here. These are like really Good tools. The thing about TikTok that's always impressive to me is just the algorithm itself. I don't want to make people think that that's the only place where you should advertise if you're not an E commerce store. We have plenty of advertisers that are non e commerce that are using TikTok to create success. The point is, like, some of these new tools here are real game changers. So we really appreciate you guys coming on to Perpetual Traffic and dropping all the knowledge bombs and all the new stuff happening, which is pretty cool.
- [52:31]
Lauren E. Petrulo
I love when we get to learn this stuff. And I'm like slacking my team because, look, Black Friday Cyber Monday was so expensive. Oh my gosh. The constant need to find channel diversity is something that we look for. And you know that I have always been platform forward for another one just because that's where I have the most experience on. But I'm so grateful to have learned so much today. Seriously. Like Michelle and Jose, I'm sending them the biggest, warmest hug, virtual hugs from Florida all around.
- [53:04]
Michelle Kagler
Thanks for having us.
- [53:06]
Jose Villalobos
Anytime y'all want us here, we're here.
- [53:09]
Ralph Burns
Fantastic. Well, we're going to leave lots of links in the show notes. I've got seven or eight links here for stuff that you can follow up on everything that we talked about here today. So if people wanted to connect with you guys individually, where's the best place to do that?
- [53:21]
Jose Villalobos
You can Find me on LinkedIn. My handle is JoseVialobosinSF with some hyphens in between.
- [53:28]
Michelle Kagler
And you can find me on LinkedIn as well. You can just search for my name. Michelle Kaggler. I think there's like three of me in the world, but I'll be the one that works at TikTok.
- [53:36]
Ralph Burns
She's the only one at TikTok though. Only one. So awesome. We'll leave all those links in the show notes here over at Perpetual Traffic. So thank you so much again for coming on the show. Make sure that wherever you listen to podcasts, you leave a rating and a review. We will read it on the air. Like I said before, we will make you Internet famous. Podcast famous for 10 or 15 seconds here, unless you give us a one star review. Lauren, you can read those. We haven't gotten one of those in a long time, but anyway, I'm not prompting that here, but wherever you leave, wherever you listen to podcast labor review, we want all honesty. At the very least, we do read the bad reviews, guys, which is hysterical.
- [54:15]
Lauren E. Petrulo
Opportunities to improve.
- [54:16]
Ralph Burns
Ross that's it.
- [54:16]
Lauren E. Petrulo
There are always opportunities to get better.
- [54:18]
Ralph Burns
We love constructive feedback. So anyway, so we'll leave links over on the show notes@perpetualtraffic.com for everything we mentioned here today. On behalf of my awesome co host, Lauren E. Petrulo, ciao until next show. See ya.
- [54:38]
Lauren E. Petrulo
You've been listening to Perpetual Traffic Leg.