TikTok is done nudging its e-commerce advertisers toward AI — it’s now pulling them headfirst into a future in which algorithms, not marketers, call the shots.
The platform’s guidelines say that starting September 1, brands that want to pay to advertise products for sale in their TikTok Shops will have to use a tool called GMV Max, ad buyers tell Business Insider. Introduced in 2024, the TikTok tool uses an AI algorithm to decide how to get advertisers the most bang for their buck.
Merchants pick products in their TikTok Shop they want to advertise, set a budget and target return on investment, and then let TikTok’s algorithm take over. It decides how to spend the money — boosting existing ads or spinning up new ones — to maximize sales.
The shift from TikTok’s standard ads manager to GMV Max has ruffled feathers in adland, since it forces brands to relinquish some strategic control to an algorithm. It also makes it harder for brands to gauge TikTok ad performance beyond the closed ecosystem of TikTok Shop, ad buyers said.
“TikTok’s GMV Max is asking for us to put a lot of faith in the platform,” said Dwight Bush, director of paid social at the marketing agency Doner Partners Network.
TikTok’s strategy echoes similar moves by Google and Meta. But TikTok’s is compulsory rather than optional, and on a quick timeline. Big Tech platforms are increasingly pushing advertisers to use AI-powered tools that create ads and determine which users to target and where to place those ads.
“It’s the direction the whole industry is moving,” said Neil Baker, head of media at the digital ad agency TUG. TikTok offers a suite of other AI tools for advertisers, including options to produce ads using AI-generated avatars. It also offers Smart+, an AI tool similar to GMV Max, which automates and generates campaigns to achieve goals like video views or website visits.
Automated tools have been a boon for Big Tech platforms. Tech giants say they save time and drive performance for advertisers. Some marketers say they’re black boxes that strip them of control. These algorithms don’t always offer a complete picture of which ads worked and where they appeared, making it harder for marketers to use the data to guide their broader strategies. And ad agencies are also wary that automating many aspects of marketing could severely disrupt their own businesses.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
Five ad buyers told Business Insider that while they accept that the industry is moving in this direction, they feel the new TikTok mandate was premature since GMV Max has not yet proven itself effective for every advertiser.
While the push to GMV Max has irked some big brands, it’s been more warmly adopted by smaller Shop sellers, a TikTok Shop agency partner said.
Dan Whateley/Business Insider.
Direct-to-consumer brands that drive the bulk of their sales on TikTok Shop care less about off-platform tracking, and the product includes some guarantees that small sellers appreciate. For example, TikTok created a feature called “ROI Protection” within GMV Max designed to assure advertisers that their campaigns would drive results. TikTok automatically issues ad credits if the return on investment for a particular campaign falls below 90% of the target that the advertiser chose.
Katy Hallam, head of client services at TikTok commerce specialist agency Onyx, said the tool has been a “game changer” for some merchants’ sales and a time saver.
Why the AI black box makes some big brands uneasy
The ad buyers who spoke with Business Insider said that some large advertisers they work with had misgivings about TikTok Shop’s forced shift. They said that TikTok had already moved the original deadline from July to September after complaints from the ad community.
“Household names are more hesitant,” said Jack Johnston, head of social innovation at the ad agency Tinuiti. “They have very big creative and media strategies, and they want to be able to control everything.”
Amanda Perelli/Business Insider.
An exec at one ad agency said TikTok granted additional extensions to some of their clients who were unhappy about the change.
Ad buyers say GMV Max lacks key insights — in areas like geography, audience, and influencer data — that marketers rely on to shape campaigns beyond TikTok.
“It’s very frustrating because we can’t necessarily determine what is working and what isn’t,” Doner Partners Network’s Bush said.
Bush said the agency provided this feedback to TikTok, but felt it “wasn’t really impactful.”
Another point of contention: TikTok credits all Shop purchases during a GMV Max campaign to the tool, even if the consumer never saw an ad, according to company documentation viewed by Business Insider.
A TikTok spokesperson said the company offers both first- and third-party measurement solutions and partners that help advertisers measure on- and off-platform sales. They did not dispute the specific measurement complaints made by ad buyers but pointed to a page on TikTok’s Business Help Center that details the metrics GMV Max provides. The page says that some metrics may not be available to all advertisers yet.
TikTok Shop faces challenges in wooing big brands
The GMV Max pushback is one of several obstacles TikTok Shop has faced when trying to woo larger brands, current and former TikTok employees said.
Dave Benett/Getty Images for Garnier
While a variety of big brands have embraced the platform — including Anker, Maybelline, Philips, Garnier, and Crocs — TikTok has had an easier time pitching smaller sellers. TikTok said in June that over a third of all TikTok Shop purchases in the US each month in 2024 went to small businesses, and that 171,000 local and small businesses had opened TikTok Shops globally.
One current TikTok Shop staffer said finding the right team within a big company to pitch TikTok Shop can be tough, as the platform blends social media and e-commerce functions that may fall under different divisions at a brand.
Brands also sometimes complain about “dupes,” or fake versions of their products, showing up in the Shop feed, one current and two former staffers said. And it can be hard to sell a big brand’s team on tasks like hosting livestream sell-a-thons when the return on investment may not pan out, the staffers said.
