Amazon ups its spending on TikTok
As TikTok develops its e-commerce strategy it also has to be careful to work more closely with advertisers such as Amazon, so as not to make changes that could sour their relationships, according to Rachel Tipograph, CEO of MikMak, an e-commerce platform for brands, which helps retailers analyze sales through links across social media sites.
“TikTok needs product innovation and a product strategy,” Tipograph said, “and when you’re a major ad spender [like Amazon], you will have advice to help shape that product roadmap. And it seems like Amazon is a large advertiser on [TikTok], and the person leading the Amazon account for TikTok not only has commercial responsibilities but has to make sure Amazon is represented at the table.”
TikTok is trying to balance how much it pushes sales directly inside the app and how much it allows links to send shoppers to websites where it’s harder to take credit for the sales.
“I think they’re probably trying to figure out ways to not cut off advertiser and partners at the knees, by not cutting off links,” DeBrunner said, “but also find ways to direct consumer through their own revenue channels.”
As TikTok figures out its e-commerce strategy, Amazon continues to see it as a lucrative path to winning shoppers.
Amazon has increased advertising on TikTok, according to Sensor Tower, to promote products such as Prime Video, its streaming service and Shop Amazon, which is its e-commerce arm. Amazon’s U.S. TikTok ad spend rose 30% in the first half of 2023 compared to the first half of 2022, according to Sensor Tower. Meanwhile, Amazon’s U.S. ad spend declined 25% on other social media channels that Sensor Tower measured for this story.
In all, Amazon, including brands such as Zappos, Audible, Whole Foods and MGM, spent $3 billion across all measured media in the U.S., according to data from Vivvix, up from $2.9 billion in 2022. TikTok accounted for 8% of Amazon’s U.S. ad spend in the first half of 2023, up from 5% in the first half of 2022, according to Sensor Tower’s analysis.