TikTok’s Role in Performance Marketing: What We Learned from SXSW

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At a recent SXSW masterclass, industry leaders explored how TikTok is reshaping digital marketing strategies beyond traditional engagement metrics. Jamie Bolton (VP of Growth, Fospha) and Matthew Barbarasch (North America SMB Marketing Science, TikTok) joined the conversation, examining how brands can rethink their approach to TikTok as a full-funnel performance channel and reassess the way they measure digital success.

Rethinking TikTok as a Full-Funnel Growth Engine

TikTok’s influence in digital marketing is widely acknowledged, yet many brands still treat it as primarily a top-of-funnel awareness channel. The discussion at SXSW emphasized that a more holistic approach—spanning brand awareness, demand creation, and conversion—is key to unlocking its full potential.

Recent industry data suggests that advertisers who allocate at least 20% of their TikTok budgets toward mid-funnel strategies tend to see stronger long-term performance. Bolton highlighted a common pitfall: “Many brands still rely on outdated attribution models that over-index on last-click performance. This means they fail to capture TikTok’s ability to generate net-new demand—especially when it comes to long-term customer acquisition.”

The Role of AI in Driving Efficiency and Scale

As advertising costs continue to rise across major platforms like Meta and Google, AI-driven optimization is becoming a crucial tool for marketers looking to improve efficiency. Bolton pointed to machine learning models that analyze vast amounts of digital ad spend to better predict performance, dynamically allocate budgets, and refine creative strategies.

“Brands that integrate AI into both creative development and targeting will be in a stronger position to scale sustainably,” Barbarasch noted, emphasizing that automation is now a necessity rather than an option. He cautioned that marketers relying on manual optimizations and static audience segmentation will likely struggle to keep pace with evolving consumer behavior.

Beyond Direct Conversions: Measuring the ‘Halo Effect’ of TikTok

One of the more underappreciated aspects of TikTok’s impact is its influence on consumer behavior beyond direct website conversions. Discussions at SXSW underscored the need for brands to rethink their approach to measurement, particularly in the context of third-party marketplaces like Amazon.

Bolton highlighted emerging data indicating that TikTok often drives purchasing decisions even when transactions don’t occur on the advertiser’s website. “If brands assess TikTok solely through last-click attribution, they risk underestimating the broader sales uplift happening across platforms like Amazon,” he explained. This evolving concept—sometimes referred to as the “Amazon Halo Effect”—has prompted marketers to explore more advanced measurement techniques to fully capture TikTok’s value.

Strategic Considerations for Q4: Preparing for Peak Periods

Looking ahead to Black Friday and Q4, early investment in TikTok can provide a competitive advantage. Barbarasch pointed out that advertisers who build their presence ahead of peak periods tend to achieve stronger conversion rates and higher overall ROAS than those who only start scaling in Q4.

Key strategies discussed included:
✔ Spark Ads – Leveraging creator-driven content to enhance credibility and trust.
✔ Branded Effects – Interactive, immersive ad formats designed to boost engagement.
✔ TopView Ads – Premium placements that maximize visibility during high-intent moments.

“Brands that integrate TikTok into their Q4 planning now will be better positioned to capture demand efficiently,” Barbarasch noted. “Those who wait until November to scale will likely face higher costs and tougher competition for attention.”

Final Thought: TikTok’s Expanding Role in Performance Marketing

TikTok’s role in performance marketing is evolving rapidly, challenging brands to rethink their investment and measurement strategies. Discussions at the masterclass highlighted two key takeaways:
1️⃣ Brands must move beyond outdated attribution models to fully measure TikTok’s impact.
2️⃣ AI-driven insights will be essential for optimizing both creative and budget allocation.

As the digital marketing landscape shifts, advertisers who embrace new measurement frameworks and leverage AI-driven tools will be better equipped to drive sustainable growth. “TikTok is no longer just a discovery platform—it’s a full-funnel performance channel,” Bolton concluded. “The challenge for marketers is ensuring they measure it in a way that reflects its true value.”

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