TikTok’s big Shop push hinges on getting users to click on advertorial videos—and so far, they’re reluctant, study finds

TikTok had to weigh conflicting priorities in introducing TikTok Shop, its recent push to get influencers to hawk products in the videos they post.

On one hand, the social media giant wants users to post viral clips that get millions of views—as has been the goal since the service’s launch in 2016. With the newer Shop, on the other hand, the company is emphasizing e-commerce more than clicks. Under the initiative, TikTok splits a commission on any products influencers help to sell through their videos. Those clips are inevitably more about shopping (a fitness hula hoop, for example) than buzz.

Thanks to a new study conducted for Fortune, that difference in buzz between the two TikTok priorities can now be quantified. Users interacted or engaged with 2.7% of regular videos posted on the service by the 120 influencers tracked, but only 1.4% of their Shop posts, according to the study's author, influencer marketing company Captiv8.

The gap shows users are less interested in TikTok Shop videos, but TikTok will likely keep them nonetheless because of the money they bring in. “Automated monetization opportunities is a trend that TikTok is leaning into…so you can expect to see more and more of that from TikTok,” says Krishna Subramanian, Captiv8’s cofounder and CEO.

TikTok Shop, launched in September 2023, appears in its own tab on the video platform, allowing users to shop for products that are showcased and endorsed by creators. The shoppable videos also appear in other feeds and are identified by an orange shopping cart symbol that users can click on to get more information about featured products.

If a product sells on TikTok Shop, both TikTok and the creator who inspired the user’s purchase earn commissions. It’s one key way TikTok is trying to encourage creators to post on the service and therefore attract users to TikTok. In addition to making money for creators, the system also helps creators establish relationships with marketers by letting them demonstrate their knack at selling merchandise. Plus, creators on Shop sometimes get additional perks like free products that are relevant to their audiences.

In response to questions about Shop, a TikTok spokesperson described it as a work in progress and declined to comment about the data from Captiv8's study. This person added that creators are core to all TikTok products.

For Pragathi Guruprasad, an influencer with 139,000 TikTok followers and the founder of perfume and skincare company Soma Ayurvedic, TikTok Shop was a boon—until recently. At first, TikTok Shop let Guruprasad market her products in ways that “didn’t come through” on Instagram and that it led to strong sales. But those strong sales on TikTok started tanking in December. “In the last month-and-a-half or so that has pretty drastically changed…although TikTok Shop videos are high in viewership, the engagement is certainly low,” Guruprasad says.

TikTok's representative said this sales decline is abnormal, and that many other creators are growing monthly revenues on Shop. To emphasize the point, the spokesperson noted that 5 million new shoppers on TikTok made purchases through Shop during the holiday shopping frenzy from Black Friday and Cyber Monday.

What does this mean for TikTok Shop’s future?

TikTok Shop can be quite lucrative to creators. On average, active ones earn $5,000 to $7,500 monthly. Meanwhile, the biggest earners, who have large libraries of content that feature popular products, can average $10,000 to $20,000 per month, according to Captiv8, which connects 10 million influencers with 1,500 brands.

On Thursday,  Captiv8 debuted its own shopping product. Called Creator Storefronts, it helps brands find influencers to hawk their merchandise and makes it easier for creators to post videos on their own websites or social media, including TikTok.

Though users are less likely to watch TikTok Shop videos than organic TikTok content, Shop videos are often more engaging than traditional video ads on the platform. The older video ads, identified as “sponsored” and integrated into users’ feeds, garner engagement rates of 0.2 and 2% depending on the campaign, according to Captiv8.

Jacob Wallach, who worked at TikTok for over two years managing brands’ advertising campaigns, thinks TikTok Shop is “natural” fit for TikTok despite users being less likely to click on those videos. Many people use TikTok to learn about new products and trends, he says, so integrating e-commerce into certain content makes sense. Compared to traditional collaborations with influencers in which brands often have final say on what's in videos, "creators on TikTok Shop get more free rein in how they approach the content,” says Wallach, who is now the founder of marketing agency Social4TheWin.

For now, TikTok’s big bet on Shop is a big money loser. Last year, it was expected to hemorrhage $500 million.

To help narrow the losses, TikTok plans to increase the commission it collects from merchants on each sale from 2% to 8% by July 1. It also hopes to increase the commissions it collects by increasing the total value of merchandise sold through the service to $17.5 billion, according to Bloomberg. (TikTok disputed the report.)

While TikTok Shop posts may not be as engaging as organic posts, advertorial content still represents a significant opportunity for TikTok to tap into the burgeoning creator-led shopping trend. In Asia, the sector already has major momentum.

For example, e-commerce sales on Douyin, the Chinese version of TikTok that is similarly owned by ByteDance, hit $272 billion in 2023, according to Insider Intelligence. If TikTok can get American Gen Zers to shop on its service, it could seize a substantial part of the $1 trillion U.S. ecommerce market. Says Subramanian: “It’s only a matter of time until commerce just explodes here similarly to how it has been in Asia.”

This story was originally featured on Fortune.com