TikTok Shop mandates AI-powered GMV Max for advertisers

TikTok is rolling out a major change to its advertising model, mandating that brands promoting products through TikTok Shop use its AI-powered tool, GMV Max, starting September 1. The move, aimed at automating campaign management and maximizing return on investment, has drawn mixed reactions from advertisers-especially larger brands.

Launched in 2024, GMV Max enables merchants to select products from their TikTok Shop, set campaign budgets and ROI goals, and then hand control over to TikTok’s AI algorithm. The system automatically allocates spend, boosting existing ads or creating new ones to optimize sales performance.

While TikTok positions this as a streamlined, results-driven solution, some advertisers view it as a loss of strategic control and a potential “black box” challenge in measuring ad effectiveness outside TikTok’s ecosystem.

The mandate mirrors broader industry trends as platforms like Google and Meta push AI-powered ad solutions. However, TikTok’s approach is notable for being mandatory rather than optional, and for its fast implementation timeline.

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TikTok has also introduced ROI Protection within GMV Max, which issues ad credits if campaigns fall below 90% of an advertiser’s target ROI. Smaller merchants and direct-to-consumer brands have welcomed these safeguards, with some reporting significant sales gains.

Despite this, several major ad buyers argue the tool has yet to prove consistent results across all advertisers. The platform has already extended its original deadline from July to September in response to feedback from the ad community.

The GMV Max mandate adds to TikTok Shop’s challenges in attracting larger brands. While global names like Anker, Maybelline, Philips, Garnier, and Crocs have embraced the platform, TikTok has seen faster adoption among small and local businesses. In June, the company reported that over one-third of TikTok Shop’s monthly U.S. purchases in 2024 came from small businesses, with 171,000 SMBs worldwide opening TikTok Shops.