A brand asked us last month why their ad costs had jumped.
So I pulled the numbers to answer it, and something jumped out:
The ad dashboard said the ads made $4,211.
The whole shop made $4,214.
Your ads made every sale. Apparently.
$3 short of the whole shop…..
One of our brands, 1 to 26 August:
Ad spend: $3,191
Ad revenue, according to GMV Max: $4,211
Total shop sales, every channel: $4,214
So the ads "made" 99.9% of everything the shop sold.
Meanwhile creator videos drive 78 to 95% of this shop's sales. Every single week.
Both can be true. That's the problem.
GMV Max runs your creators' videos as ads. So the same sale is counted twice, and the ads dashboard only shows you its side of the story……
So what actually grew the shop?
You need a different perspective
Same weeks:
Creator videos went from about 15 a week in July to 80 plus. Some weeks 160.
Active creators went from a couple of dozen to 500 plus.
Samples approved went up more than 10x.
Sales per day are up 54% on July.
The ads were surfing that wave. And taking a bow for it 😂
One honest note. A single creator still does around 70% of this shop's sales (Yes, I know……That's not a good sign. We're working on it).
"So were the ads a waste?"
No. We made a trade, on purpose
Rewind to July.
Before we took over the ads, this brand was paying $45 to $50 per order. Burning cash.
The first fix wasn't clever. We cut two thirds of the catalogue from the ads, every product with zero videos. ROI jumped past 3. Under $8 an order.
Then we asked the brand: high ROI, or more sales?
They picked sales. Fair call.
So we dropped the ROI target in steps and doubled the budget.
Sales went up. Cost per order went to about $20. ROI dropped to around 1.3.
That's exactly what "chase sales" costs. Nobody got it wrong……
But judge that trade from the ads dashboard and you'll crown the ads the hero.
The ads are the loudspeaker. Your creators are the band.
Time for some napkin math
Where the dashboard flatters you
On Amazon you learned this years ago. ACoS looks great, then you check TACoS.
Same thing here.
$3,191 on ads against $4,214 in total sales.
That's 76 cents of every dollar the shop made, gone straight back into ads.
That's the price of chasing sales. Fine, if you chose it. Dangerous if you are not watching the P&L.
Know your numbers
Everything adds up. Eventually……
On TikTok Shop, every number is connected.
Creators and affiliates make the sales. Ads amplify them.
And every dashboard wants the credit.
Your creator numbers, your affiliate numbers and your ad numbers all feed the same total. So when the pieces add up to more than the whole, something is being counted twice.
Before you move a budget, drop a creator or crown a campaign, check it against total shop sales.
Always double check. Your dashboard won't.
Go and check yours. Five minutes.
Thanks for reading.
- Paul 👊
PS. Checking dashboards like this is exactly the job I've handed to our TikTok Shop agents. Thursday 24 September, 6pm BST, I'm going live to show you how. Free, capped, and everyone who registers gets the recording. Save me a seat