TikTok intensifies dispute with Google and enters sponsored search in Brazil

TikTok has included a new option within its ad management tool that will make your “dances” not only generate more revenue but will also intensify the dispute with Google.

The short video social network brought Search Ads Toggle to Brazil, a feature that will allow brands to run ads on the platform’s search pages. This functionality was currently available in the United States and is being tested in other markets.

“Today, there is a process of community commerce, which is like a huge ‘digital word of mouth’”, says Daniela Okuma, general director of TikTok’s business in Brazil. “People use the app to recommend products or review ones they already have and, in this way, influence the community.”

With 1 billion global users, TikTok enters the competition for the great financial lode of sponsored searches. In Alphabet’s results for the third quarter of this year, for example, the company’s total revenue was US$76.7 billion. Google Ads alone contributed $59.6 billion.

But Bytedance, owner of TikTok, is not so far from its competitors. Recently, the website The Information showed that the Chinese company’s revenues are approaching that of Meta Platforms, owner of Facebook and Instagram, as it generates more advertising sales.

According to The Information, ByteDance’s revenue increased more than 40% to $29 billion in the second quarter from a year earlier. This is a higher growth rate than Meta, which increased 11%, to US$32 billion, in the same period.

Now, it’s time for TikTok to boost its revenue with sponsored search with an eye on companies from different segments that have started to use the platform as a product promotion tool.

Study published in the journal Marketing Science, which is linked to the Institute for Operations Research and the Management Sciences, showed that TikTok has the power to increase visits to the physical stores of advertising brands by up to 2.9 times. Another survey, carried out by Ipsos, showed TikTok that three out of four users of the social network purchased a product after seeing it on the platform.

“This finding highlights the platform’s significant influence on the consumer journey,” says Okuma. “On average, it takes just 22 days for a TikTok ad viewer to visit a related brand’s physical store.”

When Search Ads Toggle is turned on, existing video ads appear alongside users’ organic search results and are identified as sponsored. In this way, the new tool will allow brands to expand the reach of their campaigns and connect directly with consumers who are actively seeking information related to their businesses and products.

Okuma lists what she considers to be some differences from TikTok’s sponsored search competition: personalization, with an algorithm that “understands” users’ interests and delivers results that are relevant to their interests, and in-app trends, which show the most popular videos of the moment, which can be useful for users who are looking for new and relevant content.

The arrival of TikTok in the world of sponsored searches was a fear of Google itself. Last year, Prabhakar Raghavan, senior vice president of Google, admitted that the Chinese social network and Instagram were the biggest threats to the company.

“We keep learning, over and over, that new internet users don’t have the expectations and mindset we’ve become accustomed to,” Raghavan said, adding that young people, TikTok’s preferred audience, look for people, places and products on social media in instead of turning to Google.

This is not TikTok’s only move to gain market share. At the end of last year, the company was preparing the arrival of its e-commerce in Brazil, as reported by NeoFeed.

The strategy was to invest in live commerce with local partners and suppliers from China. The investment was in live shopping formats that are not linked to digital influencers.

Although they are quite popular in Asia, live commerce began to gain traction and relevance in Western countries less than two years ago.

In an article recently published in NeoFeed, advertiser Nizan Guanaes recognized the power of the social network to boost a brand. In three days, an iFood campaign reached more than 100 million views on TikTok.

“There are two things that some people turn up their noses at: the jingle (“you have no idea”, lol!) and TikTok (“it’s not creative”, lol!)”, wrote Guanaes. “These 105 million views today include 1,500 pieces of content created by consumers themselves, translating the reality of iFood into their lives.”

The iFood “gum jingle” is an example of a successful campaign that used TikTok Ads Manager. What the social network wants now is for brands to create creative and engaging campaigns using their sponsored search option.