I Was Wrong About TikTok

January 23, 2022

Hey there. Hope your 2022 is off to a great start and you're ready for week 2. I know I am.

Since last week's issue about my 2020 Facebook Ads strategy got some good feedback, I figure I'll discuss TikTok today. If you're thinking about launching on TikTok or are already running TikTok ads, this is going to help you.

This newsletter will be have a few sections:

  1. My learnings after a few months of TikTok ads, and what I was totally wrong about in my second newsletter.

  2. Why I think attribution is going to get worse, and my plan for figuring it out

  3. A multi 6 figure bet we are about to place

First, a brief disclaimer. As always, this is what I am finding, not necessarily "investment advice". Also, TikTok advice and best practices are changing so rapidly because the platform is so new. But let's get into it...

Section 1: I Was Wrong About TikTok

So what was I so wrong about? After writing an issue that detailed our entire 2020 growth strategy, I asked a few people I respect what they think I would end up changing my mind on. I wanted the feedback. A few of them said I was undervaluing Google, Youtube, and SEO. I don't disagree. But no one, including myself, said I was wrong about TikTok. In it, I said that we're already spending there, and it's going well but I don't think it's going to be huge for us. My initial prediction was that we'd get up to $30k a month and then tap out. I just didn't think that TikTok was going to be all that for us.

Guess what? I was dead wrong. We're already spending over $1,000 a day very profitably, and I'll have us up to $2,000 a day by the end of January. I imagine we'll blow past $100,000 per month in TikTok spend by the end of Q1 no problem.

Why such a change? A few reasons.

First, I still had the notion that TikTok was for younger people, and our best customer wasn't on there. Our AOV was significantly lower than all other channels, and conversion rates were lower too. But I now think it's more of a result of the channel, and not due to the type of customers on there.

How do I know? With a few simple tests, we’ve been able to increase our AOV from $79 to $95. If there were truly bad customers, that wouldn’t have been possible.

It’s really easy to look at a lower AOV, lower conversion rates, and shorter time on site and assume the quality of traffic is lower but I think there’s another factor: momentum.

It is very difficult to change one’s momentum. We mostly fly through our day on autopilot, so when we’re on TikTok we’re in a mode of consuming content very quickly, and having everything done for us. We aren’t even choosing who to follow for crying out loud. They’re also accustomed to changing their focus every 15 seconds. Hard to place an order when you can’t focus for more than 15 seconds.

Contrast this with Youtube. I come from a true direct response/ info product background. You know what types of funnels do really well on Youtube? On Demand Webinar funnels. People on Youtube are in long form consumption mode, so even if cost per webinar registration is higher, cost per call booked was usually the same or better because Youtube leads would stay around to watch the whole thing. If I was running native/display traffic that people would see while reading articles , I would likely test running to long form advertorials. The point?

Asking prospects to change their state or behavior is asking them to do too much. Also, it’s not that TikTok audiences are low quality traffic; they’re simply in a certain state of behavior that is not the most conducive to placing an order. That doesn’t mean that it is not an extremely effective top of funnel awareness platform.

I just think asking prospects to do too much on TikTok is not going to work. On Facebook, we can run traffic to our PDPs and still have an AOV over $100 because they’ll usually get 3-4 products. On TikTok, our AOV was $79 running to PDPs. That’s not going to cut it.

There Are Three Main Conclusions, And 1 Solution.

  1. TikTok traffic contains pockets of potential high value traffic, but it needs to be “saved” for when they’re in a better state of mind to purchase.

  2. Sometimes it’s better to not ask your customer to buy right away, and wait until they’re ready. If we asked them to buy right away by sending them to the PDP, they might buy but it would be an impulse decision, which would result in a lower AOV and likely more of a sale than an acquired customer. If you’ve read my previous newsletters, you know I’m in the business of acquiring customers for our brand, not just getting a sale.

  3. Creating a funnel, or customer journey has to match their mental state while browsing on TikTok to be successful.

The Solution:

A Listicle + Quiz Funnel

If you follow me on Twitter, you already know how bullish I am about quizzes and editorial style landing pages. They have both been working extremely well for us on Facebook individually, so why not put them together?

Here’s why, based on my thought process above, this funnel type is perfect for our goals on TikTok

  1. Quizzes and advertorials usually improve AOV and CVR in my experience.

  2. The quiz captures email, so we can follow up with our email flow with education and strike while they are in the correct state of mind.

  3. If we truly are reaching a new pocket of people, they’re not familiar with us so they’ll need some time to think about it and consume content. Wouldn’t we want their email and zero party data so we can personalize that content to them?

  4. We’re not asking them to do too much. Think about it. The listicle is written to be very passive. It doesn’t feel like a sales page. And the layout means they only have to read a few headlines to get the point. No work on their end. Next, the quiz. Say we sent them to the PDP or homepage. They would have to look around, browse the products, and think about which ones are best for them. For us, they’d even have to pick their shade, which is asking wayyyy to much. The quiz is great because it literally does all the work for them, just like their accustomed to on TikTok. They click on a few buttons and pictures, and then we literally say “here, this is exactly what to get.”.

I know I’m going to get a ton of questions about what we use.

I build the landing pages on Builder.io and our quiz is on OctaneAI. They’re both the best for each, respectively.

Here’s V1 of our Listicle, and here’s V2.

I am super bullish not just on this funnel structure, but on TikTok. I was a late adopter. I thought it was a fad and only for kids. After spending a lot more time on the platform, I think it’s truly incredible. I’ve talked to a few big name VCs and founders lately whom I respect a ton, and they both were super bullish on TikTok.

If you’re not on there yet, you are probably missing out, on both organic and paid. If you are, I hope this email gives you some ideas of what to test for your business and goals as well as some context for thinking about the platform and your prospects state of mind.

What questions or feedback do you have?