Brief:

• TikTok announced a partnership with the e-commerce platform Shopify to help brands and retailers advertise their products through shoppable videos, according to announcements from both companies.
• Shopify clients can now access the self-serve platform in the TikTok For Business Ads Manager without having to leave their Shopify dashboard. From there, they can install or connect a TikTok Pixel with one click, making it easier to track conversions, and also create campaigns, target audiences and measure performance in the video-sharing app. TikTok is offering a $300 advertising credit to eligible Shopify merchants to run their first campaign.
• The TikTok channel is now available to Shopify customers in the U.S., and will expand throughout North America, Europe and Southeast Asia early next year. TikTok and Shopify also said they will continue to test new shopping features in the coming months, indicating social commerce will remain high on the agenda for the fast-growing app owned by ByteDance as it looks to round out a fledgling ad business.

Insight:

Beyond signaling another bet on social commerce, TikTok's partnership with Shopify marks a significant move by the video-sharing app to broaden its nascent advertising ecosystem. As part of the deal, marketers with a TikTok for Business account will be able to deploy in-feed shoppable video campaigns directly within Shopify — the type of cross-platform integration that could be important for TikTok's efforts to establish a larger advertising network that can match those of social media rivals.

While a possible ban of TikTok in the U.S. is still scheduled to go into effect on Nov. 12, the collaboration between TikTok and Shopify could be a sign that the companies don't see it as a big threat as the courts weigh whether to a grant an injunction against the ban. For Shopify, the TikTok deal would make less sense without access to the highly lucrative U.S. market for consumer goods, though the company has a global presence.

The news shows TikTok moving quickly to build out TikTok for Business, the global marketing platform it introduced in June. The offering centralizes TikTok's marketing services in one place, but opening new capabilities that are accessible on Shopify represents a degree of flexibility that mobile marketers may welcome as they look to link their advertising closer to sales.

Preserving the user experience that has turned TikTok into a cultural phenomenon and favorite of young audiences will remain an imperative, however, and the partnership could serve as a major test of whether users will be receptive to more performance-based advertising.

"[This] will test whether TikTok can turn viewership into clicks out to the advertiser's websites, to generate online sales. But rather than trying to copy the format of its competitors, TikTok should focus on delivering better brand building for advertisers," Kole Ogundipe, client strategy director at the agency Croud US, said over email. "The allure of TikTok — and therefore its biggest advertising potential — is seamless, user-generated content.

"When you have a platform that is built on creative and engaging content the focus needs to not be on clicks, but instead on how your brand can leave a lasting impression that works with the environment," Ogundipe added.

Other recent moves have shown TikTok trying to grow its advertiser base and revenue opportunities. In July, it rolled out a self-serve advertising platform to help small businesses create campaigns, mirroring the steps that other social media companies have taken to mature their ad networks and expand their purview beyond deep-pocketed big brands. Last month, the app also debuted a program to showcase approved third-party providers of campaign management, creative development, branded effects and measurement solutions. And in August, it tested its first shoppable livestream with Ntwrk, a home shopping network targeting Generation Z.

If TikTok plays its cards right, it could evolve into a powerful e-commerce engine, which is one of the reasons why Walmart is interested in acquiring a stake in the app as it scrambles to iron out a U.S. deal. Eighty-eight percent of TikTok users said they discover new content through the service, while about half said they find new products through ads for products or brands, per a Nielsen study commissioned by TikTok. Those levels of engagement are likely positive for Shopify merchants seeking to reach a Gen Z audience whose spending power is growing.

Shopify aims to help its more than 1 million merchants promote their products in shoppable video ads on TikTok, which now has more than 100 million users in the U.S. With many consumers avoiding stores during the pandemic, e-commerce is also surging alongside the increased usage of social media, making the integration between Shopify and TikTok more compelling for mobile marketers.

As part of the agreement, TikTok and Shopify announced they would run the first co-branded "hashtag challenge plus" campaign. Running from Nov. 10-15, the #ShopBlack push promotes Black-owned businesses that have been disproportionately affected by the pandemic, letting users see products from more than 40 Shopify merchants by using an accompanying hashtag and branded effect. The in-app campaign will include music and content from top creators, according to TikTok and Shopify.