As its operational fate in the U.S. wallows in uncertainty, TikTok continues to roll out new features. The latest is a set of ad formats for promoting and selling cars. Known simply as Automotive Ads, this is a purpose-built and templated ad format for both auto manufacturers and local dealers.
Those two intended personas define the new format’s dynamics, with optionality in geographic scope that ranges from national to regional and local. In other words, the new program caters to upper-funnel brand advertising, as well as mid and lower-funnel marketing such as displaying dealer inventory.
In all cases, the company is framing the new program as a performance solution. And its effectiveness is likely greatest when it blends all stages of the funnel to include brand-building and calls to action to display local dealer inventory. This casts the widest possible net and leaves the rest up to user intent.
It seems to be working well so far as TikTok’s test period showed cost per acquisition decline by 40 percent on average compared to benchmarks. Click-through rates and engagement meanwhile grew 78 percent and 40 percent respectively. These metrics are aligned with the funnel breadth noted above.
Standard Slate
Going deeper, the new Automotive Ads are available in two main formats: Model ads and Inventory ads. The former is all about upper-funnel awareness, showing off car models and trims. Inventory ads meanwhile focus on specific listings from nearby dealerships, which scratches the lower-funnel itch.
The options are further bisected into two main ad types: Video+ Product Cards and Multi-Link Carousel Cards. The former lets advertisers blend video and personalized recommendations that are clickable and shoppable. The latter tosses aside the video option and gets right to the auto listings.
In all cases, auto manufacturers and dealers can expect the standard slate of advertiser-facing levers, including setting a fixed budget and letting things programmatically execute from there. This involves tapping into TikTok’s interest graph and targeting, based on the robust first-party data it has.
Speaking of which, TikTok underscores the potency of the new program with its users’ auto affinities. Specifically, 37 percent of 18+ users are in the market for a new or used car. 56 percent watch reviews and discover new cars on TikTok, and 44 percent feel that creator content is influential in car buying.
TikTok & the Local Landscape: A Conversation with Damian Rollison
Aura of Uncertainty
As for the user experience, they will see Automotive Ads during TikTok sessions, from which they can drill down to engage and browse inventory. This entire clickstream importantly is contained within TikTok, so there’s no fast switch to a browser or other cumbersome handoff that can lose users.
That last part is also key for the factor noted above: first-party data. One tenet of the social commerce movement – as seen on Instagram and others – is first-party transactional flows. Among other things, this lets them keep the entire UX under one roof, and thus subject to data collection and use.
Coming full circle to TikTok’s fate, it’s not treating an uncertain future as a reason to take its foot off the gas for product development. Meanwhile, the company is likely encouraged by the recent move to let its app back into U.S. app stores. But everything it does has an aura of uncertainty. We’ll be watching.
