Forced Grand Total Sales Volume (GMV) on Advertisers by TikTok Marketplace
In a move aimed at streamlining digital commerce, TikTok has announced that starting from September 1st, all TikTok Shop advertisers will be required to use GMV Max, an AI-powered tool for campaign management and optimization. This decision, however, has sparked unease among advertisers, who are expressing concerns about transparency, targeting, and strategic control.
The power struggle in digital advertising is becoming increasingly evident, with platforms like TikTok intent on consolidating control and betting on automation as the future of commerce. On the other hand, advertisers are wary of being locked into a black-box system that limits their ability to steer strategy and measure true performance.
Brands select the products they want to advertise, assign budgets, and set a target return on investment. TikTok's algorithm then determines where to spend the money. However, the concern among larger advertisers is that GMV Max provides insufficient visibility into key dimensions such as audience targeting, geographic breakdowns, or influencer-level performance.
TikTok's mandate to use GMV Max risks alienating the very large brands that lend credibility and scale to its ad business. Major brands and agencies resisting the introduction of GMV Max at TikTok Shop include WPP, Omnicom, Publicis, and several leading global advertisers such as Unilever and Procter & Gamble.
The broader context reveals that digital advertising platforms are centralizing control through AI and automated campaign tools. These tools promise higher efficiency and consolidate data within the platform's own ecosystem, limiting reliance on third-party measurement and reinforcing walled gardens.
However, not all reactions to GMV Max have been negative. Smaller direct-to-consumer brands and independent merchants who depend heavily on TikTok Shop for sales have welcomed the use of GMV Max. The tool offers time savings and consistent sales growth to these sellers. TikTok has also introduced "ROI Protection," a safeguard that issues ad credits if campaigns deliver less than 90% of the advertiser's targeted return.
The controversy surrounding GMV Max comes at a time when brands are scrutinizing their investments in social commerce channels. A tool that restricts transparency and data portability may prove a tough sell, especially when those same brands are juggling competing demands across Meta, Google, and Amazon.
The outcome will depend on whether GMV Max delivers undeniable results across diverse categories and scales. If TikTok can prove its AI consistently drives higher returns, resistance may soften. However, if the tool fails to satisfy larger advertisers, the backlash could threaten TikTok Shop's ability to compete at the highest levels of digital commerce.
One concern raised by advertisers is TikTok's practice of crediting all Shop purchases made during a GMV Max campaign to the tool, even if a customer never actually encountered an ad. This has raised concerns about inflated performance reporting and weakened ability to measure true incremental impact.
As the digital advertising landscape continues to evolve, the debate over GMV Max is likely to shape the future of advertising on TikTok and beyond. Ad agencies fear erosion of their role due to the automation of campaign management, but the question remains whether these tools can deliver the transparency, control, and performance that advertisers demand.
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