Ep 528: Cracking TikTok Shop: The GMV Max Revolution and How Pilothouse Builds Affiliate-Led Content Sales Engines | AKNF

0:00Debbie: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. 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 unreliable. Where the magic of TikTok is, is in community building.

0:35On TikTok, that part hasn't been quite figured out yet, except for brands who can have strong organic voice. That's how they're leading the charge.

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1:48Debbie: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 are you doing? I'm good. Thanks, Eric. Can you describe a little bit of your focus right now at Pilot House? 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.

2:26and, 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 DTC, but keeping everything on platform.

2:40Debbie:TikTok 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 still 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? 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.

3:15And 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 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.

4:06but 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.

4:32Debbie: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 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, you know, 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.

5:02Yeah. So I think the kinds of content I'm making actually really varies on the brand and the sort of like audience that 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 in 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 um like tiktok users respond to that on the organic side but then i have like another brand that you know i i'd say is more in like maybe like the medical or like the skincare 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.

6:03So 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.

6:12Debbie: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 content, 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? So 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.

6:48So 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.

6:56Debbie: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 entails? 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 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 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.

7:58So 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.

8:07Debbie:And then when they're running affiliate offers for you, is their call to action your shop? Yes. Or do they, yes. So basically they're driving directly to your shop. They're driving traffic to a product link that does sort of, it's the product listing, but they can also place it in their showcase. So it'll be alongside like a variety of products. Okay. And we're traditionally 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. Yeah, that's correct. Which makes sense ultimately for them. They already are succeeding at, like I was saying, like taking more and more of people's time.

8:43Debbie:And now they're positioning themselves like a marketplace like Amazon, right? So why would you ever want to leave? I guess the challenge is so often people aren't in that buying mode, right? When they're on TikTok. I guess 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. 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.

9:23And I think on the other side of it too, that TikTok 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.

9:46Debbie: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, 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? 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.

10:18I think the live market is very difficult to enter because one, either 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 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 GMV max campaigns. So you can drive additional traffic to your live campaign through that.

10:49Debbie: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? 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 on other channels, but they want to explore TikTok and or maybe, you know, they come to us because other channels, they feel like they've sort of like limited their reach.

11:27They 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 and spikes in performance.

11:59Debbie:Which can be a challenge. 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 feels like TikTok. I think for a lot of brands, it feels like TikTok is just like unreliable in that sense. 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.

12:31Debbie:I think that's something we talked about on your presentation too, is there is a, you know, whenever you spend on meta, you're, 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, 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, we'll 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.

13:05I think what the magic of TikTok 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.

13:48but TikTok has this halo effect in terms of helping you find new customers just because a customer doesn't necessarily convert on TikTok doesn't 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 off brands that have a presence on TikTok and then stop it compared to brands who know you'll have a present at all.

14:16Debbie: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 uh da pine is in my dreams after you uh mentioned it during the the call out early this week I looked up the Pine all account and honestly like a good hour of laughs at truly unhinged stuff very unhinged yeah not as unhinged as sour patch kids i don't know if you're yes i was literally just gonna bring up sour patch kids because another one that i think is just progressively just getting better and better but also crazier and crazier sour patch yeah where they're mixing sour patch kids with mustard it's just like hideous stuff that like a really brand sensitive person would be like Like, what are you doing?

15:37Debbie:But it just sticks in people's minds and the brand, they're delicious. So I don't know, 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, we 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.

16:18Debbie:Can you describe, like, I know we've had a few viral hits 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? Yes. The best way to describe it is you've got to get people in like the first like two seconds. So usually the content 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.

16:56Like don't buy this. This is garbage.

16:58Debbie: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 a, we work with like a mushroom coffee brand and the hook was like, Hey, this, this is a rip off. This didn't get me high. Obviously, that's not the intention of the product, but it makes people stay a little longer. 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.

17:39Yeah.

17:40Debbie:How much of the content that we're doing is organic? Because we're doing paid ads as well, and the paid ads can still drive to external parties. Is that right? Or does everything on TikTok have to just drive to shop now? 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.

18:18So 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 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 points etc but allowing them ultimately to do what do they do best and that's

19:05Debbie:to sell yeah um 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. 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.

19:43We 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 did an audit for recently who has zero presence on the platform 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 if 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 and gmb through mass affiliates uh i think oh 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 uh 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.

21:11The 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, you know, 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're really fun.

21:32Debbie:Speaking of slop, how are Are we using AI in the process on TikTok these days at all? Or is this all human touch? So far, it is only human touch. I think AI does help in terms of like strategizing for like content ideas and briefing. But ultimately, 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. How are you liking working on TikTok? Because I guess you didn't start on TikTok. You've been with Palo Alto quite a while now, I think. You didn't start on TikTok. How are you liking working on the platform?

22:10I love TikTok. TikTok is awesome. I think the creative is great. The way that people engage with the platform is great. And it's 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 leading towards. And I think that maybe adds an extra level of chaos to it.