TikTok joins the AI-driven advertising pack to compete with Meta for ad dollars.

Officially launching today (Oct. 7), Smart+ handles everything from creative development to targeting and optimization, streamlining the entire ad buying process on the app.

In practice, marketers can let TikTok’s AI do the heavy lifting — building and delivering ads to drive conversions, leads, or app downloads. However, they also have the option to take control of important steps, as Smart+ offers the flexibility to use its features to choose.

For example, marketers can use the tool to create and optimize ads and then choose to manage the campaigns themselves or give control to AI. This modular approach allows vendors to pick and choose which features to upgrade, setting it apart from competing solutions that often require a full commitment to the entire suite.

This flexibility can ease concerns that tools like Smart+ require marketers to give up too much control to inscrutable algorithms.

However, it also highlights another important issue with devices like Smart +: while these “black box” models promise increased functionality through advanced machine learning, they require a greater degree of trust from vendors, often without the intelligence and control they are used to. .

However, many seem to want to trade less attention for faster results and improved ad performance.

That’s exactly what TikTok is banking on with Smart+. The process is simple and fast – no more weeks of guesswork and endless A/B testing, according to Adolfo Fernandez, TikTok’s director, global head of product strategy and operations, commercial.

With TikTok’s AI already trained on what drives successful ad campaigns on the platform, advertisers can expect to win faster with less hassle, he added. The same goes for design; Smart+ has partnered with TikTok’s other AI tool, Symphony, designed to help marketers create and refine ad ideas.

“Advertisers who improve value with Smart+ web campaigns get a 53% improvement in return on ad spend on average. [compared to without it],” said Fernandez.

Ray-Ban is another example. During the summer, the brand ran a beta Smart + campaign that reduced the price per purchase by 50% compared to previous companies without the device. Conversion rates rose by 47%, driving a 42% bump in return on investment for the eyewear brand.

Results like this are intended to appeal to a certain type of advertiser – the type that has avoided TikTok so far, not knowing that the platform can bring results quickly if they don’t want to spend time and money to get to know them. Smart+ is TikTok’s way of pulling them in. And if it works, it could revolutionize TikTok’s business, making small advertisers the foundation of its growth – just like Meta and Google.

“In my mind, with the advent of Smart+, the gap will close completely with Meta,” Blake Chandlee, TikTok’s president of global business, told Digiday. “That’s it [Meta’s Advantage+] has been the standard in the industry. Again, we have been strong in branding, to the point of selling our products more than anyone else in the market. But our products do [especially including Smart+]I think, it can be equal. “

However, closing that gap won’t be easy – TikTok’s ad business still has more to do with Meta.

TikTok’s global ad revenue is expected to reach $233 billion by the end of the year, and increase 27.3% to $28.42 billion by the end of 2025, according to Marketer’s March 2024 report. By comparison, Meta’s global ad revenue is expected to reach $154.16 billion by the end of this year, increasing 23.2% to $173.92 billion by the end of 2025, per Marketer.

“Automation is an important step for us as we enable advertisers to continue to invest in TikTok and achieve a greater return on investment,” David Kaufman, TikTok’s global head of product revenue and solutions, said during the TikTok event.

The store remains serious in this process – so much so that it has rolled out its own AI tool to boost sales for retailers. Called GMV (Gross Merchandise Value) Max, the AI ​​tool automatically tests and picks the most effective products for retailers. It leverages traffic, organic content, paid ads, and affiliate posts to reach customers across all of TikTok’s marketable real estate — from the For You Page to the Shop tab and even search results. It cannot, however, maximize the return on sales, only the overall ROI within TikTok. But TikTok execs don’t see that as a draw — in fact, they think it’s a feature, not a bug.

“If you put that into perspective – from ROAS to total ROI – it’s a huge step forward in our vision of going from being a media partner to being a true business partner for our customers,” said Fernandez.

Put another way: TikTok wants to emphasize big business results – like long-term growth and successful marketing within its ecosystem – over just driving sales quickly through advertising. And the first test results show that there may be something: marketers using GMV Max saw an average of 30% increase in sales value, according to Fernandez.

Taken together, all signs point to a change in TikTok’s pitch to marketers. The company wants to be seen as more than just an entertainment app where users kill time watching viral videos. It is becoming a platform where people choose to spend their time – and with that shift in mind, they are increasingly searching, searching and buying what they see.

To prove it, TikTok’s chief measuring product feedback and performance pointed to some compelling numbers. “Research shows that 75% of purchases driven by TikTok are not accounted for on the platform, and conversions are underestimated by 73%,” said Ann Nguyen, TikTok’s head of measuring product solutions and operations.

According to the judge, this trend has been building for a while – existing measurement tools have not been able to capture it. So, instead of waiting for third-party metrics to catch on, TikTok built its own.

If the external data does not tell the story it wanted, TikTok created its own narrative – supported by its tools, including development studies. These studies measure sales that would not have occurred without TikTok advertising and use a randomized controlled trial method similar to what is done in scientific research. TikTok execs encourage Smart+ marketers to add these lessons, although marketers will have the option to use their own tools.

“They always show that TiKTok is a scalable platform that provides demand and results that go beyond the last click,” said Nguyen. “Advertisers, for example, see on average an increase of about 25%.

This is not a new technique – Google and Meta have both used similar methods for years to build a “no value, no money” list. But TikTok is trying to stand out with its focus on privacy-enhancing technologies, such as data cleanrooms and trusted execution environments, to protect marketers’ data while still proving its worth.

And as TikTok establishes itself as a serious player in advertising, the pressure is on to show that it can deliver on what matters most: the bottom line.