Meta Just Entered the TikTok Game…Here’s What It Means for E-Commerce | EP. #229

Meta just stepped into the TikTok Shop game, and it could change social commerce fast.

In this 229th episode of the E-Comm Show, Andrew Maff breaks down Meta’s new affiliate and product-tagging features, how they compare to TikTok, and why this shift matters for both Amazon and DTC brands. If you’re testing TikTok, working with influencers, or building an affiliate strategy, this episode will help you understand where things are heading and how to stay ahead.

What You’ll Learn:

• How Meta’s new affiliate features work
• Why TikTok struggles with profitability
• How affiliate is becoming a primary growth channel
• What this means for Amazon vs DTC strategy

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Transcript

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Andrew Maff: 0:03

This opening up of this channel is going to be very interesting for E commerce now, because you could, you've unlocked being able to access this audience in a lot of an Welcome to the E comm Show podcast. I am your host. Andrew easier way. Maff, owner and founder of BlueTusker, from groundbreaking industry updates to success stories and strategies. Get to know the ins and outs of the e-Commerce Industry from top leaders in the space. Let's get into it! Hello everyone. Welcome to another episode of the E comm Show as usual. My name is Andrew Maff, and today I am going to talk to you about something new that's out so at shop talk this year, which was end of March, Meta officially announced that they are going to play in the same space as Tiktok. So Surprise, surprise, Zuckerberg has basically just copied someone else. You know, let's be honest from an E commerce perspective, one of the greatest things about Tiktok is, especially for Amazon sellers, is the ability to put product on Tiktok shop. You don't necessarily need to have a website, although, God knows, I highly recommend it. And you can work with affiliates who you can set a commission, you approve people, and then you're set and go, right. You're in a good spot. They can sell product, they make content as much as they want, and they try to help sell your product. They get a commission for every sale you make. Problems with Tiktok is it is a younger audience. I know, before you get mad, I know there is an older audience there. Relax. What I'm referring to is a majority of the users are a younger audience. There is an older audience, but they are on the platform less frequently. That is a fact. Please don't fight me. And so the issue is with that being a younger audience, a Gen Z is not very brand loyal, so the LTVs tend to be a little bit lower with them. Obviously the available income is lower because they're still young, so they're not spending as much. Typically, we've found that, like, I think it's like 30, $35 or under. Type of products do well, do better, I should say on Tiktok. So the other side of things being in the past, and which now is we'll consider the past, Meta, Facebook and Instagram has been better for slightly more expensive products, because it's an older audience. It tends to be your millennials, your your boomers, that type of thing. So to clarify, here's here's where we stand as of today. So as of this recording, it is mid April, because I don't think it's going to be out yet by the time this episode launches, but so we've already started playing with it. We've already started using it. It's it's a step ahead. It is not exactly comparative to Tiktok just yet. So in the States, Meta has now officially integrated with Amazon to certain extents, where people can search directly within Instagram, tag Amazon products, and be able to get a commission from it, similar to kind of a connection through create connection through, yeah, it's through creator connections. It's similar to that you can still also work with influencers affiliates, supply them with your Amazon attribution link, or supply them with, obviously, their own referral link, and that will now also work as well. So when you go into when you go into Instagram, you have, you need to have 1000 or more followers, you have to be 18 or older, and you have to have a professional account. So you have the professional dashboard in there. There's like a monetization kind of section. It's got to get turned on things like that. But what you can do now is just like on Tiktok. So on Tiktok, if you've seen it, someone tags a product, and there's like a little floating thing that kind of shows the product and the name price and stuff like that, right? So now meta has started to allow that there's nothing you can really do within your catalog as of yet for most people, there's no direct like D to C integration for this affiliate element. However, what you can do is, if you're using your third party affiliate platform, and you're working with an affiliate, and you supply them with a link to a specific product on Meta, for since day one, you've basically told the post always had to be if you're interested in this, check out my link in bio, right? And so they would go to the link in your bio, they would click on that, and then there'd be a laundry list of stuff that they had talked about recently, and you'd have to find it. Now you don't have to do that. So now what they can do is, once it's primarily through reels, once they get to the end, they have the ability to put that product link with their affiliate link at the end, and it will populate th main product, image, the title, the price, and then any traffic that they're sending to your website, just your traditional D2C site, they will get a commission for right? So basically, they're taking it out of the link in bio, and they've made it a functionality within directly within reels. So they announced this at shop talk. The goal is, from what I've understand, is that it will eventually function a lot like Tiktok, where you'll be able to kind of set your commissions and use it directly within the actual shop. But for now, it's not there yet. The interesting thing is that it's it's happening, right? So this becomes very intriguing for, I'm going to say, probably a lot of Amazon sellers. It's already intriguing for a lot of D2C sellers, but Amazon sellers, they really just don't like the idea of having their own website a lot of times, which I still to this day, find absolutely ridiculous. But basically what, what they'll be able to do now, and why they a lot of Amazon sellers like Tiktok, is you could use something like MCF or whatever. And so when someone actually converts through Tiktok, Amazon would fulfill it, right? And so they don't have to have their own website. They still don't have to have their own warehouse. They basically get to, you know, pretend to be E commerce sellers. Sorry, on the meta side, you can't do that just yet, but you can now have affiliates and influencers use their link in meta and tag certain Amazon products and send people directly to Amazon. So Amazon obviously will still fulfill it. You have deal with all Amazon's fees and all that fun stuff like you normally would, but if you're using a Amazon attribution link, they get the 10% which is fantastic. So it's a nice thing, right? The bigger benefit is going to be once they actually move this to having the same functionality as Tiktok shop, where you can set up the whole affiliate concept directly within Tiktok shop. That's going to be where it becomes very interesting, because this opens up a very easy sales channel for Amazon sellers. Here's here's something I spoke about this, I think last episode, maybe a few episodes ago. You know, the the interesting thing that I found where a lot of brands really like Tiktok, but also where they hate it, is, I still, to this day, do not really know any brands that are extremely profitable on Tiktok. I know a ton of brands that do like ridiculous volume, but they're not exactly the most profitable, mainly because if you want to get the best affiliates, you have to have a very nice commission given to them. You still have some fees, and your fulfillment fees, and if you're, especially if you're using MCF, or even if you're fulfilling yourself like you've got those costs, you have your COGs, and then you probably want to run some ads around that stuff. So when you start to really look at it, the issue also becomes like you basically are breaking even. But a lot of brands don't care. They want to break even. They use Tiktok as an awareness channel. They use that to acquire new customers, and then ideally, your retention is in a good position to be able to upsell them, cross sell them, or maybe you have a consumable, in which case, like the LTV is fantastic and it's totally fine, so it's a great way to kind of keep customer acquisition costs really low, but that initial purchase, there's typically not a lot of profitability behind it, and Amazon sellers hate that, because Amazon sellers can't, because it's Amazon, they had a lot of this data. They can't really evaluate what their actual customer acquisition cost is, and what their LTV is, and, like, Amazon hides all that stuff, so you can't really figure that out. So that's why we see a lot of Amazon sellers get super excited about going to Tiktok, because they hear about the revenue, but they don't really hear about the profitability side. And so they go there, they try it out, they burn a bunch of cash, and they go, Wait, I don't want to do this. And then they get out, that's what we typically see. D2C side. It's a little bit different, still breaking even, but you can actually evaluate what your LTV is and be able to control that customer journey, which is why I tend to lean in on that the Meta side is going to be very interesting. The reason I think the meta side is going to be really interesting is a boomers and millennials tend to be a lot more brand loyal boomers, more so than millennials. But the the customer acquisition cost on Meta tends to be a little bit higher, but you also tend to have a significantly longer LTV. However, not only is your customer acquisition costs tend to be a bit higher, but you can definitely get away with selling stuff at a higher cost like, I mean, we will work with several brands that sell things and 1000s of dollars, and Meta can sometimes be one of the top performers. So this opening up of this channel is going to be very interesting for E commerce. Now, because you could, you've unlocked being able to access this audience in a lot of an easier way. Now, in my opinion, I think that where it will eventually end up going is I could potentially see how, if, if I'm accurate, where you're going to see higher price point stuff sold on Facebook and Instagram, and they eventually release it where it's a lot easier and you know, you can do basically, it's just a rinse and repeat of Tiktok shop, which is what Zuckerberg does as a living. I think what you could actually end up see happening is you could see a lot of really good Tiktok affiliates and influencers and things like that start to make their way back to Instagram and Facebook only because they're going to see more success with higher price point products. So the commission that they get should be higher, in which case they will get paid more to be on Facebook and Instagram.

Narrator: 10:39

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Andrew Maff: 11:12

It's a theory. It's obviously extremely early to figure that out. But I think the other thing that's very interesting here is that ability to just tag products in general, even if you're even if you're just tagging your own in your own business profile, and you're not using an affiliate side, it just makes it so much easier. Sending people to your LinkedIn bio is always so stupid. It used to drive me crazy, especially if you had like, a big product line, or if you had, like, a bunch of stuff that you wanted to promote. It was kind of a nightmare. So I find this very interesting. I think it's, I think one of the things that shocked me the most, because this was, like, the first time I've ever seen meta do this, at least in a very long time, where they just announced it and released it. I didn't know of any, like, beta program. Usually there's like, a, oh, we're slow testing this. I'm sure they did, but I didn't even, I didn't even hear about it this time. So typically, you know, you kind of get, like, a few people get it, and then others don't. And then I've got this new issue where, like, we have some brands that have it, other brands that don't, then you get people that are upset about it. But now I think that what's kind of interesting is this one, they just, they just, here's it. Here it is for everybody. So everybody's got it now, but it's just through reels, really, in your catalog, nothing has changed. It's the exact same thing. You still now. You have to go into reels and you have to, like, just manually put the product link in there, ideally, your affiliate link. I think where this becomes also very interesting is you're going to see you're I think also what's going to happen, especially through like the Amazon side a little bit right, is these influencers are going to want to make as much money as possible. And so they know that some of their content on Tiktok does really well on Instagram, and so they basically make the same thing, or they literally just copy and paste it and put it on Instagram. And where Amazon sellers are going to struggle is basically these influencers are probably going to want to work with a brand that they can put this product on multiple channels. And if you don't give them the ability to do it on meta and get a commission through that as well, they may lean more towards brands that have that offering. And I think, you know, the other thing that could be really interesting is like, will, Will influencers all of a sudden now, especially the ones on Tiktok right now, they can send people directly to Tiktok shop. They get a commission from it, right? But if now that Meta has opened it up, they want to be able to make a commission from it. I'm wondering if we're going to see A, they're going to lean towards brands that have that functionality. Or B, if we're going to see that these, these affiliates, want to just go ahead and use like, a third party platform and get a link that they can then just rinse, they can copy and paste wherever they need it right? Because the issue is, is like, if they work with a brand, and let's say they do have the capability to also sell on Meta, because the brand has an affiliate program, they now have to get approved on the Tiktok side to get a commission through there. But then they have another direction that they have to go, where they get another affiliate link for all their other channels. I think that, I'll bet you that all these third party platforms like we typically lean towards using like impact, but there's, there's a ton out there. I think my guess is they're probably thrilled, because there's probably a ton of opportunity here for them to now open up meta Instagram just easily. It's not like it didn't exist before. It was still in the Lincoln bio concept. It was just kind of a pain. You know? The other thing too, being like, you'll see some of these influencers will send people directly to their store. It's just going to be, it's going to be interesting how it shakes out. So what I would say is affiliate is really starting to take off, like the more and more that we start to look at that, you know, affiliate. Years ago, you had share sale, which was just utter garbage, because it would basically get ripped off by coupon companies, you you know, and then you had, like, a few other things, but ever since TikTok shop turned to affiliate, and I think that brands got a little burnt out from influencers, right, like they got so tired of, you know, I'm gonna pay an arm and a leg for this influencer, and then possibly find out the hard way that, you know, they their audience isn't as engaged as you thought, or they're going to find out that, you know, they just didn't have the audience that you thought. So I think there's a ton of different problems there that obviously can can begin to shake out. But, you know, the affiliate side is definitely becoming a lot more intriguing, especially now that all these platforms are finding ways to help their users monetize their content so that they don't necessarily have to pay them as much. And so it It's, I think it's just where it's going. So, you know, with makes a ton of sense. brands, the affiliate side, it Tiktok was like now it's like a micro example of, still, what I think that a lot of brands need to focus on, if you want, like the best affiliates, the ones that are really excited to push your product, they need to get paid, and they want to get paid as much as possible, so you have to give them a pretty good size commission. So many brands look at affiliate as how would I put this like a middle maybe, like a middle market channel? I don't know how to explain that. I'm using the wrong word here. But basically, like so many brands, look at affiliate as a profit center, and it's not like it should. It shouldn't be there. Your goal is to use affiliate marketing to introduce your product to new people. But if you have a product that is like a one time purchase, and the chances of you, you know, getting another sale from that that customer, are slim. Affiliates going to be kind of tough. And then, yeah, you're going to have to, you know, only offer a certain percentage, and that's just going to be the case. But you're also going to see residuals from it, right? Like you're going to see that rising tides lift all boats general concept, the more affiliates you work with, even if you're getting slim margins or you're breaking even on it, you're still going to get that awareness. And the user may not purchase right away, but now you've gotten the awareness, and then eventually they may decide to go to Amazon, buy from you, there, go to your website, or whichever. But I think that the brands that have consumables, CPG space, of course, brands that have great upsell, cross sell opportunities, or if it's just something that, like, yeah, people tend to buy our stuff, like, every couple of months, or every, you know, couple times a year, whatever. And you can actually evaluate your LTV, that's where affiliates are becoming extremely interesting, right? Because you can basically look at, if I know that shit, let's just say that someone only comes back twice a year, right? They may they only buy our products two times a year, and then that's it, whatever. Let's just say that's the case. If that is the average, you automatically know, like, cool. I can break even on this first order. So I know, because they're on average, they're going to come back and they're going to purchase me a second time. It's a very small example, but let's say that's the case. So now what I can do is I can look at my affiliates, and I go, All right, here's my cogs. Here's exactly what's going to take me to ship the product. Here's, you know, maybe I factor in a little bit of a hard cost or something like that. And then you say, Cool, here's x percent left. I'm just gonna give it to the affiliate. And so the affiliates like, cool. You know, 30% commission, 45% commission, something ridiculous like that then you're in a good spot. The thing that becomes a little bit of a struggle is affiliates also, typically, at least, this is how you tend to see it on Tiktok, is not only do they want to commission, but they want to tell their users, like, oh, and it's currently, like, 50% off, or something like that. So now you're like, in this new issue of, do I have to over discount it and then give an affiliate a commission and that's a different beast. This tends to be the problem on Tiktok, because you see a lot of these overseas sellers that have come in and basically just been like, Oh, we're going to do 60% off the product, and we're going to give the affiliate, you know, 30% and we're going to lose money on this first purchase, just because A, we want to flood the market, and then B, I know I can sell them, this and that and the other, and I can get all the data right. So it's, it's still kind of a data play. So I think that that's kind of where, you know, obviously, brands need to be very careful. I think that, you know, a lot of people might be kicking themselves for not hopping on Tiktok early and, you know, getting into the affiliate game and starting to do that. It, it might rejuvenate, I don't know so much about Facebook, but it might rejuvenate Instagram a little bit more. We're going to, you know time will tell, it's really going to evaluate, where do these creators go? If the creators all decide, like, Okay, we're going to hop over to Instagram too, then all of a sudden we might see, like, an influx on the Instagram side, which also means any Meta ads that you're doing should start to perform a lot better, ideally, because then you've got more real estate, right? It could be fantastic. It could be crap. Who knows? Like we're going to find out. I think that it's very interesting play. I would say that if it was my call, and basically what we're talking to all the brands we work with right now is start using it because all of the bad sides of Tiktok, all of the problems that you tend to see, all the things that you're worried about, they're not going to happen for a while. It's going to be a long time before things start to shake out that way. And before it be kind of, it kind of level sets. So we've already started like, Alright, let's take some of the affiliate links. Let's throw them into Meta. Start to use that. You know, what can we do to use them, even on our existing profiles that we're that we're controlling? So there's a lot of different elements there, but either way, like now is definitely a good time to start leaning into affiliate and looking at, how can you develop a really nice affiliate program. Yeah, I would definitely, I would highly recommend it where I still, personally just don't like the idea of using affiliate to send people to Amazon. You got creator connections. And there's some stuff that like, yeah, you can hop in there and get it, but creator connections really isn't that great. But I think that the biggest difficulty is, like I just mentioned, for the Tiktok side, and it's going to happen on the Meta side, is you might have to over discount, you might have to give a pretty nice size commission, and because Amazon's already eating a ton of your margin as it is, because it's definitely not a cheap platform, it like leaves you with it's definitely going to leave you with nothing if you do it right. But then you can't even evaluate the LTV, so you don't really know what's going to happen. So sending people to Amazon, I just, I'm not a huge fan of doing it through affiliate. There's certain scenarios where it makes sense. There's also, like, great scenarios for like, if you need to sell through product, or if you decide you want to do a sale and you know that you have a nice Subscribe and Save list. But otherwise, like, it's not as frequent I'd rather own the customer data that's my own personal preference. But it's going to be interesting. It's gonna be really intriguing to see what happens as this starts to shake out, and as we start to realize, like, Hey, what's going to happen to the Tiktok influencers as well, and is it going to become kind of a cross thing? That's my thoughts. That was the news for today. So thank you all for joining me as usual. Please make do. Please do the usual thing. Go, rate review, subscribe all that fun stuff. Head over the podcast. Head over ecom show.com check out all of our previous episodes. We're on pretty much every podcast platform you want but as usual, thank you all for joining me See y'all next time. Have a good one!

Narrator: 22:52

Thank you for tuning in to the E comm show. Head over to E comm show.com to subscribe on your favorite podcast platform or on the luetuskr YouTube channel. The E comm show is brought to you by bluetusker, a full service digital marketing company specifically for E commerce sellers looking to accelerate their growth. Go to bluetuskr.com now for more information, make sure to tune in next week for another amazing episode of the E comm show you.