How to use TikTok ads for your eCommerce

Welcome to the e commerce Growth Stories podcast. If you worry about your growth, if the business model isn't working anymore, if you're running out of ways to optimize your e commerce, or if you're looking to get the e commerce fundamentals right, then that's the show for you. Hello, everyone, and welcome to a new episode of the E commerce Growth Stories. We are live this time. We are live on LinkedIn as well. So hello, everyone. I'm here with Dennis. Hello, Dennis. How's it going?

Hello, everybody.

Excellent. So we will continue to address the topic of how an e commerce grows. Today, Denis said that we should talk about TikTok ads and other acquisition methods. Let's say, as the. Let's say the game is changing in e commerce and we need to tackle this the right way. Dennis, what do you think about TikTok ads?

You know, a lot of us have relied upon Facebook ads for e comm and they've worked great, great roas. But a lot of the data has gone away, the costs have gone up, a lot of targeting has gone away. A lot of just been more problems. Right, with support and all that. And this has been a fantastic opportunity for TikTok because they see that Facebook is having trouble and they copied Facebook's ad interface. The TikTok team actually told me this a year ago. We've been talking about some of the changes that they've been making, and we've seen this as a great opportunity. We see a lot of people saying, hey, we should just jump on TikTok because the cost of traffic is low and it is low. But there's a lot of things we see that are different about TikTok. And there's a lot of ways when we're driving sales that we need to be set up properly in TikTok. So I wanted to talk about that instead of just talking about TikTok as a channel that people jump on to try to be influencers or trying to be famous. If we're trying to drive sales for e commerce, there's a few key formulas that I think work really, really well. And if you've not run TikTok ads, then I think this is a good opportunity for us to talk about that, to set things up the right way.

Let's do that. I think there are two extremes. When I talk with e commerce marketers about TikTok ads, one is around, yeah, let's jump into this bandwagon and let's make it happen because it's an alternative to the Facebook ads and the other one, the other trend is around setting things straight with the business model because the TikTok isn't, is a channel. So if you don't have the right product market fit, if you don't know who is your ideal customer, if you, if your creatives are poor, it's not like having a poor creative from a channel and put it to another channel which, where the CPC is lower and you're going to fix your business. So let's address first the what's good about TikTok ads and why why should be considered as a, as a channel?

Dennis, TikTok ads are going to give you a higher ROI than Facebook if you have good creative. The number one thing in TikTok ads for e commerce is a really good 15 second video. So when you have a video of your customers that are using the product or an influencer that's using the product and talking about the product and it does not look like an ad, then it's going to get more attention. So the most important part of that 15 to 30 second video is going to be the hook, which is the first two seconds. So when you can show someone with the product and show the text over the top, that's going to be absolutely key. And we find that the cost per view on this, well the base cost of the traffic is usually $3 to $4 per thousand impressions. Right. So $3 CPM is absolutely fantastic. Right. When was the last time you saw that? On Facebook for example. And then if you do the video the right way, then you'll see the cost per video view, even though that's not the objective that you're bidding for because you're bidding for conversion, the cost per video view will be a penny or two pennies. And the percentage of people that will engage with that video, meaning they click like will often be 10% or even as high as 30%. We've seen. And you're never going to see that on Facebook now because TikTok's algorithm is so good at figuring out who's going to engage in, in that kind of content. And then the roas, the conversion rate, the click through rate's gonna be similar to what you typically see on Facebook. But because the cost of traffic is lower, because you get that extra organic boost, because you can boost the post from that other creator's account. Cause we use Spark ads. 70% of the spend on TikTok is on Spark ads, right?

Yep.

What, what percent of like who, who would have known, right, that Spark ads is such a key differentiator on TikTok ads. The fact that you can have all these people that are creating TikToks using your product talking about how awesome it is providing the text on tip one, tip two, tip three, right? And then here's a code or, you know, enter your email address to be able to get kind of special using native lead ads. Who'd have thought that those would work so well? But we see that TikTok has made it so much easier for us to find these other influencers. They've created networks where you can hire these folks. There's third party networks where you can hire influencers. There's tracking with companies like Hiros and Triple Whale. So you can get around attribution to see what the true conversions are. And I think it's just fantastic in terms of E Com because I've never seen traffic this cheap before and also convert. But the key is everything. I've talked to so many people, it always goes back to that 15 second creative, right? And so you have to empower your team to collect that from the customers. You have to build these kinds of relationships. It's not about the shopping cart, it's not about, you know, ads optimization, it's not about campaign structure, it's not about bidding, it's not about any of those things that you would typically see with like mechanical optimization. Everything's in the video. It's not with the targeting. There's almost no targeting inside TikTok. I mean, yes, you have hashtag targeting, yes, you can target by certain kinds of behavior and how far they watch the video and major categories like fashion and jewelry and music and those kinds of major categories. But for most, unless you're in one of those categories, your targeting is going to be done by the algorithm and by the nature of the content itself. Because there's no other social network that is learning from what, like actually, like reading what's in your video and actually taking advantage of, okay, people who watch this dancing girl or people who are trying to start an agency or people that ride bicycles or like, it's like if you were like Valentin, if you and I were to ride bicycles and make a TikTok video of us in Bucharest, it would recognize that we're on bicycles and would show it to other people who ride bicycles, like Facebook and Instagram and these Twitter, they don't do that. But TikTok is reading what's in the background of your image and showing it to other people who like that, which is scary but also kind of cool. So we can unlock such an incredible opportunity if we try to use Inception. Like, I could literally take. I can make a video and I could take like this Magic 8 ball, right? And if I use this, like it's in the background, or I have a book in the background, or I have some kind of object in the background, it's going to recognize that. I think I told you last time I showed you, we were at Jake Paul's house, and one of my friends made a video there, Jake Paul's house, and TikTok recognized the background was Jake Paul's house and showed it to all the people who are fans of Jake Paul, right?

Automatically.

Yeah, automatically. So it wasn't because we selected Jake Paul as a target. It wasn't because we tagged Jake Paul in the creative. It wasn't because we had that as a hashtag. It wasn't because we had a lookalike audience. It was because the video had something that TikTok recognized. And TikTok is. I mean, I would love to hear any of you guys if you disagree, But I think TikTok is the most addictive social network because it very quickly finds what you like. It finds what that user's favorite little. Like, if you like to play golf like me, if you open my TikTok, you'll see golf videos and magic and other sorts of things, because that's what I care about. And everyone's going to see a different feed based on that. So that means our way of doing targeting is not because we're trying to do remarketing or looking at an interest target or looking at a hashtag, but it's the content, it's the video itself that does the targeting. Because of what's in video and because of how TikTok is going to optimize to your cost per conversion, or if you set up the pixel properly, if you set up the conversion events properly, ideally set inside your Google tag manager, you're gonna find you don't have to do lots of creative, you don't have to do complex campaign structures.

And to build on that, Dennis, I think the world is moving towards what we presumed a few years back, that the jobs of the ones which are bidding, which are selecting proper targets manually, which are using their own brains to identify certain micro targeting, is not going to work anymore. So basically those times are gone. And as you've said earlier, it's all about the creative, how pilling it is, how sticky it is, and because humans are driven by emotions. And if you can recognize yourself, if it's something which is feeding your dopamine receptors, then you're there. And I think the algorithm of TikTok, to be honest, it's better because it's relying on this constant improving and as you've said, having this engine, image recognition engine behind it's fitting in something that you think that you're going to get because at the end of the day we all know that over exaggerating with the social media, no matter the channel, is not the way to actually be happy and the right dosage is the answer. But we are marketers here and our purpose is to help e commerce companies grow. At the other end of the spectrum, I think, and we've touched this subject numerous times, but I think repetition is the mother of learning. Right? So we have to make sure that our unit economics are there. So when we look at diversifying the channels we need to understand that hey, we are after revenue, so we are after growth or we are after margin, we are after profitability. Behind those metrics, behind revenue and profitability there are other metrics like what's affecting the revenue, the number of the traffic, the conversion rate, the average order value. Yeah. What's affecting the profitability? The same things plus the customer acquisition cost. So if we want to go one level beyond that we need to look at what's affecting the conversion rate, what's affecting the traffic, what's affecting the AOV and cac. And then we look at this new metrics which are important and which are not in plain sight because we might be trapped into thinking that we need more traffic or we need to lower the. Because that's our model. Right. We don't want to acquire customers that expensively but what if we can acquire customers more expensively by making them buy more by justifying the investment. So I think the unit economics should be there. And one thing to take into account is that having those unit economics sort out correctly looking at what's the main metric that it's important right now for your e commerce, which one is the most important makes the whole things way more easier for you because if you are in the game of increasing the conversion rate then look at the landing page, look at the messaging, look at the quality of traffic, look at the cart abandonment rate and so on. If you're in the game of increased increasing traffic then you could look at diversifying channels, then you could look at TikTok, then you could look at how, what kind of creatives you have. But it all starts with the right unique unit economics and with the customer Research knowing who you are, who you are targeting. And I think that's the. There is no black or white. It's not like TikTok is bad. Don't get trapped into the viral growth with TikTok. There are all these LinkedIn messages over there, which is kind of amusing because hey, there's a huge opportunity there. It's like it's a channel which is working, which is providing a better roas. Why shouldn't you try it? If you have the right creative, if you have the right products.

Yeah, absolutely true. If you don't have the unit economics and the fundamentals of what you can afford to pay for a customer and your LTV, then you shouldn't proceed with TikTok. Otherwise you're just going to create a bigger mess. So ironically, I would advise people that want to do TikTok ads make sure that it's working on Facebook ads already, right? Whatever is working on Facebook ads, try to tune that creative to fit inside TikTok's model and then all the rest of the unit economics should be able to flow. If you think that TikTok is going to be your salvation because you have a brand new product, I think you should think again. If you have something that is not tested, if you have a product that is not already driving sales, I don't think TikTok ads is going to be your answer. If you're hoping that you're going to create some fun video, it's going to go viral and you're going to have millions of people see it and celebrities are going to endorse it, I would say look another way because that's what people have tried to do with all these other channels. But if you have something that already has social proof, you have customers that are happy to talk about how much they like your product. If you have some kind of education, let's say you have a golf product and instead of just talking about the product, maybe you have here's three ways to improve your golf swing. Here is what we do in the morning when we're warming up before we go to the golf course. If you have some kind of education, some kind of helpful piece, some kind of entertainment that then builds affinity for your brand because you want to build people who follow you, or you want to feature your best athletes or feature your best customers, then TikTok can be a great place to build your brand, to grow your email list and drive sales. So if you don't have the basics in place with your unit economics and you don't have that tracking in place. You really should focus on those things before jumping to the red shiny object in TikTok.

Yeah. One more, one more thing to add here then is regarding the creative. The 15 seconds video with the 2 seconds hook. What's your take on diversifying this? We, we know, I know that we touch this subject, but I think there are some extremes here. Either There are these 15 seconds videos which are not there. So they make only one. They have this whole production. They bet their, I don't know, their life savings on doing the perfect video, you know, with some crazy idea either. On the other extreme, there are 50 types of videos, all poorly created. So where you draw the line, where you should be in the production terms.

Of the creative, neither extreme is very good. So if I were to ask you, Valentin, would you like to jump in the hot lava that's molten at a thousand degrees, or would you like to jump in the frozen lake? You know, I would not want to do either of them. So the first thing where people are trying to do this perfect creative that ends up looking like an advertisement. So everything that we're doing with TikTok creative is trying to make something that does not look like an advertisement. So therefore it's vertical, it looks like it's shot on the cell phone instead of like the perfect lighting. You can see right now I'm in the studio. That probably is not going to work as well on TikTok. It has to be like a friend that's giving advice. Right. But on the other end, where I want to be Gary Vaynerchuk and I'm constantly making videos all the time and I'm randomly testing all kinds of stuff, thinking that if I just make enough quantity of different videos that I'm going to find one that works. That's a needle in a haystack, random spray fire, blindfold approach. The thing in the middle is what has driven the sales already for you through any channel. And what are those key themes? Is it because they have a certain person that they respect? Is it because you're known for a certain feature that you have? Is it because there's a particular product and some angle about that product is what people like, then you're gonna make 15 second videos around that pillar. So you could technically reuse videos that you already have. And that sometimes works. But the trouble is, like, let's say you have a YouTube ad that's been driving a lot of sales, that's gonna be probably in landscape format. It is designed for longer form content, and it's not designed for the hook in the first couple seconds. Right, people for. I'll just give this an example of trying to repurpose from one channel into TikTok. It can be Facebook into TikTok or Google Display into TikTok or a podcast into TikTok. But as an example, if you're trying to repurpose YouTube, we know that like a TrueView ad is only charged when people get past 30 seconds. So you're trying to actually get people to leave in the YouTube ad. But on TikTok, you're trying to preserve their attention in that first two seconds. So what do you do on TikTok that's different in the first two seconds?

Yep.

You have to call out what it is. Attention golfers. Right. Attention people who have this kind of problem which, which is who you're trying to target in the text. They're big. Right. And you have to have some kind of movement or something interesting to get people to pay attention. That's something that most people aren't doing. If you're just repurposing other kinds of video or you're repurposing carousel ads that you're running on Facebook, which works well with dynamic shopping ads, that kind of thing. You're trying to repurpose static Images in the TikTok, people are going to see those look like ads and then it's get past you and thus your cost of the traffic. Your CPM is too high, your CPC is too high, therefore your CPA is too high. So it has to be a person. I know there's some exceptions where sometimes you can show the product, like show the pen and show different versions, show people writing with the pen. So certainly there's something visual about showing people using the product. But the key is in most cases you have to show a person who's using the product that looks like it's filmed on the cell phone. Of course you have to choose the music. So just choose the TikTok viral, which is the non commercial music that you can use. It's on a business account, not a personal account. You can't run ads on a personal account. Right. And then you turn the music because you can change the volume, turn the music all the way down to like 5%, keep your original audio there. Use the computerized voice, the female computerized voice to be able to say if you are trying to improve your golf game, here's three things. That kind of thing. So that hook. It's very hard if you're trying to repurpose content From Facebook or YouTube or Twitter or GDN, it's unlikely that you're going to have a hook that's going to work on TikTok in that first two seconds. So the most important part in TikTok marketing for e commerce is that 15 to 30 second video. And then the most important part of that 15 second video is that two seconds. So if you think about all the things that you do with TikTok marketing that hashtags the time of day, you know, the, the way you set up your campaign structure and your bidding and all that, like that's 10%, 90% is in that video. If you don't get these creatives proper and you need to try different combinations around themes that have already worked, right? So you're making different videos, new videos, but they're around themes that already work. So 90% of TikTok ads is around that video. And then of that video, 90% of that is in the first two seconds. So everything is in the first two seconds to get their attention. And I've seen people, because we have a course on TikTok ads that we teach with Perry Marshall. So for the last 18 months, I've been in so many people's accounts, asking them to show me because I want to learn, I want to see what things are changing all the time. And they're showing me what they're doing. They're boosting posts from other people's accounts, which is called the spark ad. That's what most people are doing. They're taking those same creatives that other people made and running it on their account. That's a regular TikTok ad. And they're reusing these kinds of content. They repurpose, they're making a lot of new content around these themes. They're doing things like, you know, calling out who their customer is. So that way people don't just skip past it because not everyone has the audio on. They're having someone who's very well recognized. So maybe you have a customer that's kind of an influencer, kind of a creator, and you're, you pay them $100 to make some videos or you go to some of these sites. So TikTok is a creator marketplace where you can hire people for $100 or $200, or there's sites for e commerce where you can pay $79 and you ship your product to them and they'll make, you know, testimonial video or they'll talk about the features, or they'll use your makeup or whatever the tool or product is that you have, it's all designed around getting that creative. But the use of your product, why people like your product, tips around how to become better in that particular thing that you're trying. So not the product itself, but maybe knowledge that's t using your product, like the. Instead of, you know, the golf club and how it's made, you know, how do you play golf? So what is that? One step away, One tip on how to do this. Right. We find that works super well, right. If, if you are, let's say, name a product, right. If you, if you want to delight your, your friend for their birthday, you can get a pair of socks with their face on them. Right. And you show examples like we have a company that we sell socks with your face on them, your pet's face on them. And we just go with example after example after example of people being thrilled where there's their pet excitement of getting those products. Yeah. So we're physically showing the product and short little bursts where we're showing lots of different customers how thrilled they are and they show their dog and they show their socks and then at the very end, the call to action. And this is something most people miss. You have to show that user going and clicking on the site. You have to show the user actually adding the thing to the cart. You have to show them actually doing the transaction. Right. Because monkey see, monkey do. And this is something we've learned in direct marketing for a long time. So on TV and radio and whatnot, you see like, hey, you know, blah, blah, blah, we have this awesome thing call the phone and then they show someone pick up the phone and actually dial the phone number, the special phone number to be. You have to actually show them doing the thing, actually.

Yeah.

Show them clicking on the thing on their phone and then it goes to a lead ad or it goes to a landing page or goes to, you know, wherever it is you're trying to send them. But whatever it is you want them to do that last three seconds, you have to show on video them doing that. Yeah, you do that, it's going to be fantastic for you. You might have to do 10, 20, 30 different videos to find the one that works the best. But TikTok will find those for you. You put them all inside that ad group and it'll find it for you.

Yeah. One thing to add over here in terms of testing is that when you do a video, I think, and let's say you start with three videos, I think it's important to look at the different KPIs regarding those and then build on the one which is, let's say the best. Because if you haven't made it from the first time, don't fall into the trap of believing that this is not going to work or vice versa to do the best production out there. One more thing is that but if we look at how the reality unfolds these days, we are now more like movie directors. Like marketers become movie directors and they use these things to catch the attention. And it's like you need to build a trailer for your product on TikTok. It's like which are those 15 to 20 to 30 seconds and how you are capturing the attention. Exactly like buzzfeed has been doing with all this. Is this thing going change the life of people doing rafting and then you, you, you, you build up from, from there. Because if you are there, if you're doing rafting, if you use a image with that thing, then TikTok is going to build on. On that.

Yeah. So clickbait headlines currently work on TikTok. Things can change because it can be here's one toy that you need to have or the one thing that the women have in the purse that they, they can't do without. And then here's the object that you show, right?

Yeah.

So definitely clickbaity sort of headlines. And what we found, a friend of mine said that whatever is working or viral on Twitter, for example, like whatever's clickbaity or you go to Reddit and you find what are the things that people are Quora. And you find like different ways of doing headlines. So you could speak those headlines, put those headlines in big text just to get the attention and the hook first two seconds and then show the product, show people using the product in different ways and then cut to the call to action. Maybe it's you know, get the 20% off coupon and it goes to a lead ad. Right. Which auto fills the form just like Facebook with the lead ads. TikTok copied it with the lead ads and then you mail them, mail them, mail them, mail them. Right. To get them to buy.

Yeah, Dennis, I suggest to move from the creative and from the ads to where you are actually converting. Because one of the biggest mistakes that I'm seeing not only on TikTok ads but everywhere is the lack of consistency and relevance. So you do a great ad, you capture audiences attention, you have people on your landing page and then there is complete disconnection. I mean you have the ad is saying something and your landing page is saying another thing. So if you don't have this consistency and you can build. Consistency is not that hard to build. Right. Look at the hook that you've used. You look at the promise, the desired outcome that you've put over there in the last seconds where you put the. A call to action and then on the landing page continue with the desired action. And this, this thing between the struggle that you are solving and the desired action that you are going to be able to achieve through your product. And I think that's hugely. I mean, it's a huge part of the success of a campaign is like the creative, it's important, is very important. But if you don't convert it on the landing page, then you're ruining your ch. Then of course you are wasting money. You are throwing money out of the window.

Yeah, that is so true. It's been a common PPC mistake for many years where they run a great creative, they make a certain promise or they run an ad that features, let's say Valentin is talking about how he really likes this particular product. And then so people see Valentin in the ad using the product and it goes to the landing page and Valentin's not there. It's like you went to some completely different site. So you have to preserve the sentence. So if you see Valentin in the ad, then the landing page, you have to see Valentin again. So you might have to do other landing pages. You have to make sure there's consistency between the two, even the same look and feel, even the same kind of colors. It has to feel like a natural extension of the ad.

Excellent. Yeah. Dennis, I think we could wrap this up. I want to tell to our audience what I've learned today. If you are on TikTok, make sure that your unique economics work. TikTok is a great advertising channel and you should be considering it. If you want to use TikTok, use videos about 15 to 30 seconds long. And the first two seconds are crucial because these are the hook. If you are on TikTok and running this, you should be thinking more like a movie director and using, let's say, clickbait headlines for your. For your videos. If you are doing this type of things, make sure that the landing page is there and you are consistently converting those customers by having the relevant landing page. And I think that's a wrap for today. Denis, thanks a lot for, for your time. Any. Any last thoughts for our audience lead.

Ads are the best thing going on TikTok because it gets around the whole data issue. Because the data is kept inside of TikTok. So if you, like, combine content that you have these influencers or your customers use and you run that to things like lead ads or you're boosting posts with spark ads, you're going to find a lot of success. And I would love to hear from you. What are you doing? Where are you struggling? What's working? What's not working? Reach out to me. And we're constantly gathering examples. I love learning from you guys because it's such a new space. Things change all the time. Reach out to me. And if you have something specific that you're willing to share, you're willing to share your ad and you're willing to share your performance, I would love to feature you. I can't guarantee you that I will, but I've been featuring a lot of people because we have hundreds of examples. I would love to learn from you what's working, what isn't working.

You've heard the man. So thanks a lot for being here today with us, Denis. And thanks everyone for watching. And we'll see each other in two weeks in the next episode of the e Commerce growth stories.

See you guys.