Guest Bio:
Sam Royle is the founder of SoSquared, an influencer marketing and social commerce agency. While his agency was one of the first ones to become a TikTok Shop partner, it is now also build a tech platform that facilitates how brands work with agencies and creators in the social commerce space.
Summary:
In this conversation, Sam Royle and Moritz Schröder discuss the intricacies of TikTok Shop and social commerce, emphasizing the importance of working with content creators rather than just paying commissions. He highlights the significance of brand safety, tone of voice, and the opportunity costs associated with choosing content creators over traditional production studios.
He also goes into detail about the tech platform that SoSquared has been building and that will facilitate and streamline the way brands, agencies and creators in the social commerce space can work together.
Takeaways:
- You can’t just pay creators a commission for social commerce.
- Brand safety and messaging are crucial in influencer marketing.
- People resonate with other people, not just brands.
- Working with content creators involves opportunity costs.
- Quality content requires investment, no exceptions.
- Influencers have built audiences over time, adding value.
- Content creators can produce organic social media content.
- Choosing creators over studios changes the marketing strategy.
- Understanding your audience is key to effective marketing.
- Investing in quality content pays off in the long run.
Full Transcript:
Moritz Schröder (00:01.656)
Sam, lovely to have you on the podcast. Warm welcome. I’m excited to be talking to you today because you’re the founder of SoSquared. And not only are you a very successful agency working with influencer marketing, working with social commerce, but also you actually launched a tech platform, a SaaS product to facilitate how you can work with
influencers nowadays, how you can work with creators. So I’m excited to dive into all of these topics, but maybe let’s get a little bit of background on you. What got you first interested in creator marketing, in affiliates and the whole space? Because it seems like it’s a little bit of a black box for a lot of people. You know that there are influencers, obviously everybody’s on social media all the time.
But it’s not something where I would say that there’s a very clear career path. So what got you into it and how did it evolve from there?
Sam Royle (01:04.047)
Yeah, great to be here. So I think from my perspective, it came from a bit of an obsession around consumer behavior and what influenced people to make purchasing decisions. I think what’s really quite interesting around the creator economy is if you look at influences in particular, like the term influencer is to, or the term influence is to influence somebody’s purchasing decisions, decision making, et cetera. Like this is not a new phenomenon.
we’ve had influences for as long as the dawn of time, right? Prior to social media, was celebrities, sports professionals. In the UK, we had David and Victoria Beckham, with this huge worldwide success that would influence everything. Growing up as a teenager, my hairstyles resonated with whatever David Beckham had at the time. But pre-this, you had like…
political figures, you know, when you look to like campaigns that are being run around like JFK and stuff like that, it’s like, how did he influence people like, so like, influencer marketing isn’t new, like it’s been around forever. It’s just the way that we look at influence marketing now is social media influence marketing, you know, attention is now on our devices, attention is now on social media, whether that’s Instagram, TikTok, YouTube, Snap, whatever that might be.
the influencers are the people there who hold influence that are influencing our purchasing decisions. So I guess that’s kind of where it all really stemmed from was the fact that everything that seems to be new in the advertising world just isn’t actually new at all.
Moritz Schröder (02:39.149)
And I mean, the big difference that I can see to the Victoria and David Beckhams from 20 years ago is that now it’s a lot more democratized, right? Everybody can just turn on their phone, turn on the camera and post something that potentially might go viral. Most likely not, but there’s a chance. And you can actually approach that very strategically, which I’m sure we’re going to dive more into later. But you saw this…
possibility to enter this space, what then made you decide that, okay, this is actually where I would like to go professionally. And maybe also were there any pain points that you already saw worth solving or was it more that you were just drawn to that out of pure interest?
Sam Royle (03:24.515)
For sure. mean, just to kind of double-click on you, democratizing, two of the largest creator economies in the world are Nigeria and Brazil, Literally the ability to have a smartphone, create content, and to grow a whole career out of that. So it really has leveled the playing field in terms of access to one, earning potential, and two, also your ability to bring in an audience. From my perspective, really pushed me into this was as…
Moritz Schröder (03:28.299)
Sure.
Sam Royle (03:54.671)
As consumers, choose to consume media in different ways, with that being mainly social media, with the rise of the social media influencer and the creator economy. I looked at the space and whilst influencer marketing isn’t new, the creator economy was very infant, right? And naturally with all infant industries tends to come a lack of infrastructure. So I was looking at this space and I said, as more and more businesses on a professional level want to work with more creators,
how are they going to enable those transactions, not just from an actual monetary transaction perspective, but actually the execution of the campaign. So what is the most pragmatic way to execute campaigns at scale? And that was kind where the original idea for SoSquared came in. Now, SoSquared has had many evolutions over the last three and a half years. But for us, the initial idea was, OK, more and more businesses want to transact in this space.
we need to add that professional infrastructure layer to it. The way to do that would be through technology. Obviously, naturally, technology is built once, sell a million times. That’s kind of like the whole SaaS methodology. But effectively, scaling human capital became bloated, inefficient, et cetera. Which the irony of that is that we could pivot now to an agency. So the irony is we could actually pivot to the human capital side of things, which we can go into in a bit later. But ultimately,
we needed to provide the infrastructure that would allow businesses to scale, influence, or create campaigns. So how do we do that? We look at other labor force marketplaces. You look at things like Fiverr, Upwork, these kind of businesses where you have the ability to hire talent on one side and execute campaigns throughout. So that was kind of like the big push for us, recognizing that things like
terms of businesses, contracting, general procurement and project management. Things that are so standard in every other form of business just didn’t exist within the influencer and creator economy. So that was a big push into doing it. And that’s version 1.0 of SoSquared started, which was the SaaS tool, was the creator marketplace, the connecting brands with creators.
Moritz Schröder (06:11.625)
Right. Yeah, it was kind of weird actually to see how much of a wild west influencer marketing was in its early days. Because as you said, there are so many other examples of infrastructure or marketplaces in other industries that were already well established and anyone could look at that and see that that would make sense for influencers as well. And yet it took surprisingly long in my opinion.
Sam Royle (06:24.719)
you
Moritz Schröder (06:38.218)
for this second wave of influence and creator marketing to really be launched.
Sam Royle (06:42.007)
I yeah, I mean, I’d still say it is the Wild West. Like it still completely is. Like we’re currently expanding into the GCC region right now. And like it still is the Wild West. I look, it’s still the Wild West in the UK. Into the UAE, Saudi, those kind of regions, yeah.
Moritz Schröder (06:54.739)
What is GCC? Sorry.
Right.
Moritz Schröder (07:02.59)
Yeah, I mean, also depending on which geographic location you look at, right? There are more advanced and certainly way less advanced areas. And I think you kind of got lucky to happen to live in the UK, which was very early to launch TikTok Shop, was the first market for TikTok Shop in the West. And then certainly is a very well.
Sam Royle (07:18.775)
I was dreaming that.
Moritz Schröder (07:25.226)
established market as well, also English speaking for influencers. So I’m sure that helped you get so squared off the ground, right?
Sam Royle (07:34.305)
sure. mean, we had, we never intend like, so social commerce was something that was, wasn’t even on my radar, right? We were looking at kind of like straight, like influencer marketing was the original goal, right? At the time of bringing first product to market, so still to create a marketplace, we had the privilege of working really closely with TikTok. Like they just launched TikTok shop in the UK. We were like kind of like within the first cohort of partners, like the first five like partners to kind of come in and really reshape like what is,
affiliate marketing, also that kind of social commerce. that prior to the TikTok shop, we’d had like Instagram shop tried to launch, didn’t really work. know, Facebook has its marketplace and all that kind of stuff. There has always been like shopping throughout social media, but it was really kind of closing the loop on the user experience for the end buyer. So focusing on the end buyer, like how can we make, how can we allow this person to make a purchase in app in the most seamless way possible? Like Uber’s whole like kind of
strap line was like, you can order a car, it’ll with you in three clicks, tap, tap, tap, and it’s on its way, right? TikTok is kind of very similar thing where it’s like, I can see a product, tap, tap, tap, and it’s on its way to me. The best thing that, obviously TikTok has got all these years of understanding, from Douyin in China, understanding consumer behavior, obviously in Douyin, live shopping is enormous, live social commerce space across China and also Malaysia and Indonesia and countries like that.
But they had that kind of like, they had the execution muscle and they also had like the data to support that like, look, this is next gen customer. And we say social commerce equals next gen customers. The next generation of buyers who have spent their time growing up on social media. So that’s how they’re being influenced to make purchasing decisions. Now I don’t want to type in a code, Sam 10 at discount to get my little discount and track influence marketing that way.
I don’t want to click on an affiliate link like now and then be redirected to a third party website where the UI UX is terrible. The checkout experience is crap. Like, you know, there’s not even Apple pay on there. So like, you know, I churn straight away because I can’t find my wallet, right? TikTok just knew this. And when they launched TikTok shop, it was like, okay, we’re going to allow this seamless shopping experience where the customer, me and you can view content, can engage with content, and they can actually make that purchase straight away.
Moritz Schröder (09:26.6)
Right.
Sam Royle (09:54.681)
The way that I kind of look at the whole evolution of commerce is traditional bricks and mortar, experiential shopping, you’d go out, enjoy yourself, stuff like that. That was replaced with e-commerce. E-commerce, we kind of replaced experiential with convenience, like the convenience of being able to shop on our devices instantly, et cetera. Social commerce is like a hybrid between experiential and convenience. You have the experience of, whether it’s live shopping, whether it’s affiliate videos, et cetera, like that experiential.
side of things, but you also have the convenience of e-commerce. And I think being involved with TikTok from such an early stage in the Western world has literally given us like a passenger side ride to like how this is all exploding right
Moritz Schröder (10:39.898)
And were you familiar with social commerce before TikTok approached you? Or was that something that you had to then go and read up on, do some discovery work on what was actually happening in China? Was that on your radar before you heard that they plan to launch in the UK?
Sam Royle (10:56.725)
Not really, no. I think it’s always kind of been on a lot of people’s radar. I’m 32 years old, right? So I grew up in the era of once TV programs had finished running, we had QVC, right? And people were selling things through TV. Realistically, that was very, very early stage social commerce. Technically, it wasn’t social commerce because it was through TV. But that whole idea of…
you know, selling through affiliate models, through creators, through, you know, lives or whatever that might have been has always kind of been like in the back of my mind. But it wasn’t until the penny drop moment was the moment that, you know, we sat with TikTok, we understood like, right, this is a really big market. And then when you go away and you look at like China, Malaysia, Indonesia, and you go, this is a really big market. I mean, the global social commerce industry is like currently valued at something like
1.6 trillion or something crazy like that. And that’s only going one way because if we look at the Western world, TikTok as a platform are the only real platform that have mastered the whole experience, that closed experience from affiliate or from live stream to making the purchasing transaction. YouTube are testing in India, Metra testing in a few states in America.
Snap will probably introduce it at some point. Pinterest is going to be, I think it’s called Pinterest Lens or something like that, right? We don’t really do much work on Pinterest, like, know, Pinterest is testing it. You’ve then got things like CTV, right? You’ve got like Disney +, Hulu, Discovery, Peacock, like all testing like in-app streaming, shopping. Like this is the future of how we choose to shop. And that 1.6 trillion is going to be a tiny figure in the next, you know, it’s going be tiny compared to the end figure.
in the next sort of five to 10 years.
Moritz Schröder (12:51.42)
It’s also interesting that TikTok kind of carved out that niche of discovery commerce for themselves, right? Where you as a consumer get product recommendations or got introduced to new products and new brands through your feed. And you’re actually able to then use the app to not only discover products there, but then also shop it.
Obviously there’s a halo effect around the TikTok shop experience where still a lot of people are somewhat hesitant to then buy within TikTok itself and instead go to Amazon or go to the brand’s website itself. But I think as TikTok becomes more established as a shopping destination, it’s also gonna…
somewhat eliminate that halo effect, right? Where you’re more more inclined to then buy directly through the app just because of the convenience.
Sam Royle (13:47.075)
mean, the gap between advertising and commerce is pretty much non-existent. And like you just said, like discovery commerce, we say, the point of discovery is now the point of sale. Like, meeting your customer where they’re at has never been more important. But then when you look at kind of like consumer sentiment, like, people will feel more confident shopping through Amazon. They will feel more confident shopping through other platforms, right? But that’s why, like, when we look at now how SIRS-WHO has evolved, so like talking about kind of how we’ve kind of moved and kind of pivoted, like,
we were this creative marketplace and we can go back and discuss why that didn’t work. Where we are now is this kind of all encompassing like data analytics platform specifically for social commerce. So really helping marketing teams and commercial teams like bridge that gap, speak the same language by using data to inform commercial decisions within the business, commercial and marketing decisions, right? And it’s that halo effect that you talk about. Like for example, when you look at MMM models, like how is TikTok sharp? When you look at econometrics.
how is TikTok Shop really driving purchases elsewhere? You see it like, you know, go into like a, you know, some like a super drug or you go into a boots in the UK and you see point of sale with certain kind of cosmetic products who says TikTok Shop viral product is at the point of sale in retail because people are leveraging that awareness through TikTok Shop to drive other channels because ultimately if you’re a commerce business, right, you don’t, unless you’re…
Unless it’s through your own website and you own all the customer You don’t want to be too reliant on Amazon. You don’t be too reliant on tick tock shop You don’t be too reliant on eBay, right? Because all of a sudden like then your entire revenue stream is coming through one source that you do not own That’s a scary place to be as you know as a DC brand
Moritz Schröder (15:33.67)
Yeah, couldn’t agree more. When we go back a little bit to the tech platform that you build out for SoSquared, can you walk us a little bit through the functionalities that you have built into it, the problems that you see it solve already with your customers, and then maybe also the different types of customers that you have, because I know you have agencies work with it, but then also have the influencer and the creator part work with it on the other end.
Sam Royle (15:39.801)
Thank
Moritz Schröder (16:03.173)
sort of a two-sided marketplace. Can you walk me through how that is actually used?
Sam Royle (16:07.939)
Yeah, so when we first launched SoSquared, was a pure play, two-sided marketplace, brands on one side, creators on the other. We raised some capital like early stages, and we really kind of pushed forward with wanting to grow a marketplace. Now, when I look back on this experience, we didn’t raise enough capital, like marketplaces generally needed a lot of cash to grow, like building that network effect until you hit escape velocity is a really challenging thing to do.
What that meant though with limited resources is that it meant we had to really roll our sleeves up and really get into the nitty gritty of the users on the platform, both creator side and brand side. There’s a few things that we noticed which really influenced the pivot. And if you look at kind of the actual creator economy, a lot of creator marketplaces have made a very similar or adjacent pivot because pure play creator marketplaces just
Haven’t seemed to really take off in the way that you think they would So there’s a couple of reasons for that and this is what we kind of like look back on like when we do an autopsy of our business in its first couple of years is one The creator economy is it’s an infant industry as we said which generally means like, know in some instances It’s not as sophisticated as other marketplaces, right? So what you end up having is the labor force on one side which traditionally under the labor force marketplaces might have been like
developers, graphic designers, that kind of stuff, a relatively less sophisticated labor force. And then on the other side, you’ve got basically marketeers that are entering this whole new world of marketing that they’ve not traditionally transacted in. And often a lot of campaign specification and briefs were effectively being copied from other people, So you effectively got lack of strategy on one side.
less than normal sophistication on the other side from a labor force perspective, which ultimately led to, you know, basically campaigns not being completed in the way in which the brand wanted. The creators getting frustrated because the brand doesn’t know what they want. And it’s this spiraling circle basically where effectively like it’s not really happening. then on the other side, what we, what we also noticed was that most B2B marketplaces
Sam Royle (18:31.073)
are used by SMEs. Now that’s fine. We didn’t want to sell into SMEs, right? My background is working with larger enterprises, et cetera. We wanted to sell into big businesses. And the problem with selling into big businesses is they don’t want another piece of software that sits in their tech stack that they’re not going to use. That’s why they have agencies who help them.
Moritz Schröder (18:34.916)
Hmm.
Moritz Schröder (18:53.486)
Yeah.
Sam Royle (18:57.007)
come up with strategy, help them spend that money, help them drive results for the business. Whereas SMEs are a lot more budget conscious, the founder, director, owner is often very close to the decision making on all activities at the stage. So they’re going to look for a solution like a marketplace. So to make a large B2B marketplace with SMEs, you need a lot of customers. So going back to the funding situation is that you need to be able to really throw fuel on the fire.
Moritz Schröder (19:22.851)
Hmm.
Sam Royle (19:26.905)
to really try and get that kind of network effect. So ultimately, what ended up happening was we built a traditional marketplace. So discovery identification tools, campaign creation, setup, messaging, campaign management. We even built payment rails into it, right? And what we decided was, was actually that through TikTok Shop, we were starting to get a reputation of like being able to work with larger enterprise businesses. So understanding things like stakeholder management, business plan proposals.
processes, like understanding what these overarching KPIs for these larger businesses would be. And ultimately, they wanted us to do the doing for them, So we started to build an internal agency team that sat alongside our product. And eventually, we just made decision. said, look, we’re basically doing 50 % this and 50 % this. It’s really convoluted. The platform is trying to sell a SAS license to an SME, yet we’re trying to charge enterprise pricing to these large businesses.
Like the message just doesn’t make any sense, right? We need to pick one direction. And we picked the enterprise route direction. So we did a full pivot. We decided to kind of start to build out our internal agency team. But what we did with the software was we brought our software internally and became a tech first agency. So what we said was like all this hard work that we’ve done of capital we’ve invested into building the product. Actually, this is our USP. You know, this is what gives us our advantage, our speed to market, our ability to identify talent.
that no one else is looking at. And then ultimately we said, you know what? The one thing that enterprise businesses really care about is data. They really care about that data side of peace that’s going to help them inform strategies. When you’re millions of pounds a year, you’re not just doing that off the back of a napkin. You need like hard-called facts that are going to tell you why to do that. So we started to build out a lot of cutting edge data analytics tools, taking data from platforms, put it into our own machine learning models, made that proprietary data.
started looking at computer visual analytics as to what’s driving outcomes for results. And that’s where we are now. So that’s the evolution of we started with one product, we listened to customers, we looked at the product, we really, really got into the weeds of how people were using the product, and now this is where we’ve ended up.
Moritz Schröder (21:42.051)
Yeah, I can totally see how that is a USP. I’ve been talking to quite a few agency owners and CEOs, people who have been working predominantly with TikTok shop in the last three years or so. But none of them have any other part of the business than just the agency part, right? So for you to be able to actually utilize all the data, get all that insights and then put that back into the software.
part of your business and vice versa. Put all the information that you gather through your platform into your agency work. I mean, that must be an incredible flywheel that you then get to utilize.
Sam Royle (22:21.839)
But sure, yeah, I think like it from a reporting perspective, I honestly like I challenge anybody to do the level of reporting that we do across the shop. Sometimes you could say it’s overkill, right? But like all these like data points help us feed the models, help us feed insightful decisions for our clients so that they are making decisions that are going to achieve certain business outcomes. Now that might not necessarily always be GM Vic. You know, we have certain clients who will sell billions of dollars of products.
through other channels every year. So TikTok Shop is a very small channel for them, right? However, going back to what I said about TikTok closing that loop, In terms of how effective your marketing is, there is no better way of understanding how effective your marketing is than somebody actually buying the product, right? So when we really look at it on a granular level, we can see like what types of creative personas, what type of content types, what format of content, what types of hooks, pattern recognition, and transcripts like…
all these granular bits of detail that ultimately show us what is leading to have somebody actually purchasing a product. That data, we can then blow that up and allow that to be used across the entire marketing plan for next year. So it’s giving us insight into how we can develop our marketing plans for future years. No, no, that was it.
Moritz Schröder (23:44.46)
think, yeah, go ahead. I think social commerce and maybe affiliate marketing even more so is also chronic at just not being able to provide a lot of hard data. I know at least in the past with influencers, you would kind of reach out to them as a brand and be like,
give you a thousand bucks or 10,000 and can you post about us and then you maybe get like the impressions on that post and then you kind of had to calculate back from that how much you possibly maybe have sold through that or how much of it was just brand exposure. Like it’s so vague, right? And to be able to, through your platform, be able to…
collect a lot more data, a lot more insights and then feed that back into the grander scheme of things for those very large enterprise brands. I can totally see how that has enormous value for them. And as you said, I think we’re just at the very early stages of what is possible through the creator economy and through social commerce. So if your platform is able to grow together with social commerce, I think that would be an incredible win. Do you try to tailor the platform more more towards
social commerce as a whole, or maybe even specifically TikTok shop, because I see a lot of pain points still out there ready to be addressed. For example, how a lot of TikTok shop agencies work with their affiliates, often in the thousands, right? And they might just have Discord groups and Facebook groups and maybe a WhatsApp chat where everybody is in, like it’s so messy. So would be fantastic to have a platform that is actually able to address these kinds of problems.
Sam Royle (25:10.879)
the focus.
Sam Royle (25:23.727)
Yeah, and I think like ultimately as well, like that’s so right now as a business like it and we’ve learned this over the past three and a half years like you can’t do everything at once, but it’s better to do one thing 10 out of 10 than do 10 things two out of 10, right? So as a business now for us, like we are super focused on this like post campaign analytics data reporting, like where we can basically, you even if they’re not a client of ours, somebody, you know, another TikTok shop agency can come to me and say, Hey Sam,
we just ran this Black Friday campaign, we worked with a thousand affiliates, like, we’d love for you to like run some data on all the reporting. Yeah, sure, no problem, right? That might be another product service line that we offer, the ability for people to basically pay per report sort basis, but you know, that’s still in the pipeline. So I think like we need to be hyper-focused on building what we set out to build, which is like, you know, the most comprehensive data analytics tool for the TikTok shop ecosystem.
I think what then probably happens from there is we recognize that like, if we look at social commerce, like for me personally, TikTok shop is the wedge, right? It’s the wedge in social commerce right now. And that is going to get bigger. So I think whilst TikTok shop is still the wedge, we don’t need to focus on the broader social commerce space. So, know, like for example, I said like the Instagram shop and the YouTube shopping, like even the CTV shopping and all that kind of stuff, right? It’s not, it will spread ourselves way too thin. So I think the next stage for us then,
is to really focus on that campaign management perspective, right? It’s how to basically streamline the campaign management as much as possible, But I think if I look at where we’re heading as a business, this is campaign management that works for us as an agency. think ultimately, like, we want to grow this business so that we then become attractive to whether it’s the holdcos or someone like that who says, like, look, we need to activate.
TikTok shop for our clients or social commerce for our clients. We need an agency that has a unique, you know, proprietary beer technology that will really give us that USP. I think we need to build campaign management that makes sense for us and not traditionally like in a SaaS perspective, it will make sense for loads of people because there are a lot of really good products out there, you know, that are building campaign management tools, mass affiliate outreach for TikTok shop and stuff like that. But they’re all very, very generic, right? Which is fine.
Sam Royle (27:46.351)
But it goes back to that kind of same reason why we didn’t go down the path of the creative marketplaces. When you build generic, you typically tend to build for the SME market, right? We’re not building for the SME market. We need to build so that we can adapt on the fly for these huge conglomerate businesses. mean, like, looking at, if we look at the AI space right now, what’s the most hyped company at the moment is Palantir, right?
And ultimately Palantir does enterprise AI. They’re not building for the masses, they’re building for the Pentagon and few other people, right? Because they’re building really solid, almost custom solutions for these enormous businesses. And it’s the same, obviously it’s not quite at Palantir level, but we’re going down the same sort of route in terms of the fact that our USP will be our ability to service these enormous businesses, where the typical cookie cutter
Moritz Schröder (28:21.215)
All right.
Sam Royle (28:43.673)
pay per month lives and software will not be able to service them.
Moritz Schröder (28:49.575)
Yeah, I think you’re playing it very smartly there. I’m sure you have to be a little bit more patient because with something as new as social commerce, it typically takes a little bit longer until the very large enterprises jump on the train, right? They let the SME businesses make the early mistakes and then as…
whole industry matures to a certain extent, then they jump on that. But I do think we’re reaching that point. I recently talked to a live presenter for L’Oreal in London and she said they’re going live every single week several times and oftentimes for like 12 hours straight. I talked to somebody else in Southeast Asia who said they have like 30 studios built out. I think it was L’Oreal actually.
Sam Royle (29:11.375)
you
Moritz Schröder (29:36.223)
So they’re really taking advantage of this at a very early stage. And I’m sure they’re just one of the early ones and there’s going to be a lot more following suit. So by that time, I think it’s going to be a very good place that you have carved out for yourself with your platform that you’re going enterprise and you’re going to be able to serve them really well then.
Sam Royle (29:45.945)
Derek.
Sam Royle (29:56.707)
There are some really big, you mentioned L’Oreal there, there are other really big businesses that have really taken TikTok chop by the scruff of the neck and said, look, we’re going to champion this. And I think, like with all enterprise business, it’s like moving oil tankers. Take for example, we have a client that we’re currently waiting for a final sign off and approval on the moment now. We’ve been working with them on a business case proposal since April last year. Now that’s enterprise sales for you.
I’ve really got, got into the nitty gritty of that PNLs like, you know, and really understanding like what’s going to drive commerce outcomes for you as a business. And that’s not just in tick tock shop. Like they’re also activated, look at that day on Amazon and Ocado. Right. So it’s like, how does tick tock shop feed those? And I think like, this is where we’re like uniquely positioned in the, the sense that like, we are patient, like we are a patient business. We’re not looking to work with.
the SMEs per se. for us, it’s not about onboarding a new brand every single week, right? That’s not what we do, right? We build long-term alignment, multiple stakeholder management, multiple stakeholder buying, so that we can look at long-term strategic thinking where when we sign a client, the client’s gonna be with us for three, four, five years because they see this as a long-term play. They don’t see this as a,
We need to turn a profit in three months on this, otherwise the business is gone.
Moritz Schröder (31:24.133)
Right. I mean, that, that makes total sense. And it’s good that you have your second pillar of agency work. So you’re able to play the long game, right? You, don’t rely on onboarding a new merchant ever or a new brand every single week on your platform. So it’s good to have that foundation already in place and then be able to target those really big whales. A lot of people now that social
Sam Royle (31:25.775)
you
Moritz Schröder (31:51.698)
commerce is up and coming, talk about how it’s so much easier to actually attribute the value created to the creators out there. You can pay them a commission on sales and don’t just have to pay them upfront without knowing what they will generate for you and how actually beneficial it will be for your brand. Do you think that eventually social commerce will eradicate influencer marketing as we know it, or do you think they can exist alongside each other?
Sam Royle (32:19.919)
Absolutely not. I think ultimately as well, and this is such a common misconception with TikTok shop and social commerce, is that you can just go work with a creator and pay them a commission only. That’s not how this works, right? This might work if you’re a small business or if you’re a business that’s willing to work with everybody and anybody, and that’s fine. Look, people buy from people and people resonate with other people, whereas what resonates with me doesn’t necessarily resonate with you, right? But ultimately, for these much larger businesses, there is brand safety.
there is, know, tone of voice, there’s brand messaging, et cetera, that all comes through content creators, people that create content for a living, influencers who have built audience over time. Like ultimately, like when you go and work with a content creator, it’s an opportunity cost, right? So rather than going to a production studio for somebody to create an advert for you or to create a piece of content that sits organically on your social media, you’re paying your content creator to produce that piece of content, right?
So the opportunity cost there is you’re not paying for content from the production studio, you’re paying for content from the creator. So there’s a cost there. There always will be. If you want good quality content, you will have to pay for it. No ifs, no buts. You’ve then got distribution channel, So traditionally you would pay for an influencer’s distribution channel, the ability to distribute to their audience, Influencers and creators will still always have that as part of their thing. They’ll want a flat fee, but you’ll be able to negotiate reduced.
flat for you, so reduce that risk as a business, and then have the potential upside of commission. That works the other way as well as a creator. Instead of just charging, say, 10,000 bucks for a post, you could charge 5,000 bucks for a post, but get 10 % of all sales. OK, amazing. You go and do 150, 200 grand worth of sales off a couple of pieces of content, 20 grand extra. That’s amazing. The upside is incredible. So think what it really does is it helps businesses mitigate
Downside risk so you can reduce flat fees of working with influencers But at the same time it enables creators to continue Continuously earning for like kind of how good their piece of content is so it’s almost like a performance-based metric, right? Well, it is a performance-based metric and I think that trade-off is What will work really? Well, I think currently where we are right now in the industry is that creators don’t appreciate the potential upside
Sam Royle (34:40.675)
There has been a status quo, and it’s just the incumbent way of creators being paid is on a flat fee. It’s like, flat fee, do my piece of content, that’s it, I’m done. I think that narrative needs to change, and people need to understand that, yes, we appreciate the work that you do. Yes, we appreciate the audience you’ve built. So here is a small flat fee. But we want to reward you for when the business wins, you also win. And I think when that narrative changes, that will really open up the creator economy.
Moritz Schröder (35:08.409)
And I see that already happening. see a lot of people talk about how much money they make being a TikTok shop affiliate. You always have to take it with a grain of salt, obviously. It’s what people post online and it might not be a hundred percent what is true, or it might be true for one month and then not for the other 11 of the year. But I do think that that will push the narrative into a direction where there’s a much higher upside if you actually work.
mostly commission-based and you’re just very good at what you do, right? Obviously the ones that are not very good at what they do and that don’t drive conversion and they’re not able to actually get people hooked and then also go and buy and not just watch, those will fall short, but they probably already know that deep down. And I think the other ones that know that what they produce in terms of content is really driving enormous value for the brands.
they’re going to be happy to take affiliate commissions because it’s having infinite upside potential and they’re going to capitalize on that.
Sam Royle (36:12.143)
But this is the problem, right? Let’s take TikTok Shop like out of the equation. Before TikTok Shop was here, an influencer was only as good as their audience, right? That if an influencer promoted every product under the sun, their audience hated them, right? Their engagement dropped off a cliff. Nobody wanted to support them. Being a good influencer means being authentic, right? It means being true to yourself. It means promoting products and services that you actually align to what you are about.
The same principle applies for TikTok Shop. I can pull out a million stories of people like, made 100 grand a month off TikTok Shop. You won’t be doing it in a year’s time though, because every day you’re posting 10 videos, 10 different products. You’re just trying to sell people 24 seven. Generally people don’t like being sold to. So you might be hot for this month and you might even be hot for next month when people are obviously, the algorithms pushing everyone to your videos and everyone’s purchasing.
But that’s going to drop off a cliff, right? And ultimately, like, this is kind of like the reality TV star bug of the influencer world, It’s when people go on reality TV, they come out with half a million followers, they go and work with every brand under the sun for six months, and then nobody knows who they are a year later, and they’re back to working a normal job. Same thing is going to happen with TikTok Shop. You’ve got all these people that like, look, we see in the UK, people are quitting their jobs because they’re like, I’m making 20,000 pounds a month on TikTok Shop, right?
but people are quitting their jobs to do it for six months and now they’re struggling to make 500 pounds a month on TikTok Shop because they’re promoting every product. They’re doing 10, 12 videos, 15 videos a day. They’re not being, they’re not authentically promoting products that they stand by. And that’s why we really see the intersection between the affiliate creator and the influencer. So the influencer will ultimately, you know,
Moritz Schröder (37:38.299)
Right.
Sam Royle (38:04.399)
build trust, build relationships with the end user, right? But you’re giving them the ability to monetize in other monetization streams as opposed to just a flat thing. From a brand’s perspective though, brands will always win, right? Brands don’t care if the creator drops off a cliff in two months because they’ll just get a new one. So for a brand, like a brand can just consistently keep working with everybody and anybody and they don’t care about whether that creator drops off a cliff or not.
Moritz Schröder (38:23.002)
Hmm.
Sam Royle (38:33.842)
And I think that’s where like the creator economy needs to be smarter because otherwise you’ll just be at the disposal of brands and brands will just keep using using creators in this way
Moritz Schröder (38:44.502)
As an affiliate creator then, besides being more selective about which brands and companies you end up working for, are there other suggestions that you would have from your background and your insights into the industry, how they can actually maintain making a good living off of TikTok shop and affiliate setup, or is it just…
Sam Royle (38:46.863)
I’m not ready.
Sam Royle (39:02.479)
Thank you.
Moritz Schröder (39:07.662)
part of the game that eventually everybody’s gonna drop off a clip just because there’s so much new content coming out all the time as well.
Sam Royle (39:13.903)
you need to find your niche, right? You need to find your niche and stay true to it. So for example, like you could be a beauty TikTok shop creator that reviews beauty products, right? And that is all you do. You look at like the viral products on TikTok, you know, you give them honest reviews, you know, you can even like say, look, this isn’t that great. This is, this is the good makeup tutorials, create content that aligns with what you’re selling, right? Or say you say I’m really interested in electronics, right?
I could start a channel that does like gadget reviews that, you know, I get a new delivery, I unbox it, you know, this is the new drone that’s being sold on TikTok shop. I test it out, I tell you the features and I create content around that. That’s a really good TikTok shop seller because I’m creating content that’s actually valuable to people. If I’m going to create content where, you know, one video is a beauty product, one video is a weight loss gummy, one video is a…
you know, some random fidget gadget sort of thing, whatever it is. And they’re all just random videos. And all I’m basically saying is you need to buy now this is on discount, make sure you get it now, make sure you get it now. Like, you know, you’re going to last two months. It’s not going to work.
Moritz Schröder (40:21.434)
I think it’s also important that you build that trust of your community, right? Like if you have your niche, if you’re actually willing to say that certain products are not good or you compare them and you say this one is better than the other and for this and this and this reason, I think that builds a huge amount of trust because nobody out there, right? Or other people are doing it, but a lot of people are just…
promoting and promoting and trying to sell products that they might or might not believe in. And they might or might hold might or might not hold back on information that would actually be relevant for the audience. But they also know that would hurt sales. So to be able to say, okay, this is actually not as great as I thought it would be, might in the long run really benefit you. And I see that for example, with the largest live streamers in China, right?
obviously very far ahead in that industry compared to the West and people like Austin Lee, who talked to millions and millions of people every single night. He’s willing to burn the bridges on some of those brands, right? And say, this is really not great. You should not buy this. And then others he chose very carefully and his audience knows that and therefore trusts him.
Sam Royle (41:31.459)
this is the thing, right?
You have to be able to build trust and that’s not what’s happening in the world right now. The reason why so many of these affiliates are doing well ultimately is because the brands are putting paid media behind them. You’re effectively just an outlet and distribution channel for paid media, right? And that’s what’s pumping it, yeah? Or you get a viral video because there’s some sort of like, you’ve been very clever in the hulk that you’ve used or like, you might’ve used like a load of stuff around like kind of like, so like.
when Shilla Jit gummies were flying, people had loads of alpha male clips at the start saying you need to increase your testosterone, you’ve got low sex drive, all this kind of stuff, and it was really getting people in. The interesting thing about the way that a lot of TikTok affiliates are selling, and like you say, not disclosing information, selling things that are misleading, there was a huge issue within TikTok shopping the summer of 2024 where loads of apple cider vinegar gummies went viral.
because people were saying like, they make you skinny, right? Lapis had a video, it doesn’t make you skinny, right? But because the creators were saying that, the brands were jumping off the back of the fact that a creator was saying that. So we’ll just put a little paid media behind it. Whereas traditionally, if they run that as a TV ad or a social media ad, that would never pass advertising standards. Like it would basically get fledged straight away for misinformation. So that’s again, like a good case study of how like,
The creators that were selling apple cider vinegar gummies in 2024, where are they now?
Moritz Schröder (43:05.995)
Yeah, yeah, I think it’s a new industry with a lot of learnings to constantly take from it. And I think a lot of people that got burned on the early stages of TikTok shop will probably also regret some of their decisions. But I hope that there’s people out there like yourself who actually promote that message of building trust, building community, because
It’s, let’s be honest, not as sexy of a message as saying I made 200k last month and this is how you can as well. So it seems like the ones that promote very fast success might overpower voices like yours. And I hope that that changes over time because there’s just a learning curve, right?
Sam Royle (43:51.375)
Yeah, but at the end of the day, look at my client base. They’re all large, multi-billion dollar enterprise businesses. They’ll listen to me. They’re not going to listen to the guy who’s basically screaming online about making 200 grand a year for the first two months, and he’s now selling courses because he’s not making 200 grand anymore. He’s done two months of selling 200 grand. Here’s my blueprint. Subscribe to my sub stack or whatever it is, and I’ll teach you how to make 200 grand a year.
Moritz Schröder (43:59.734)
Yeah.
Sam Royle (44:18.607)
So the reason that you’re selling courses is because you’re not making 200 grand a year anymore.
Moritz Schröder (44:25.291)
Yep. As a side note, I always wonder about these core sellers. If you made as much money as you claim you are, you probably would just keep doing that and not branch out doing some other random side businesses. So should always be careful with the core sellers out there. But I think also tools like yours with SoSquared could be in the future really help brands communicate the guidelines that they want their affiliate.
Sam Royle (44:36.866)
short.
Moritz Schröder (44:54.785)
group to adhere to, right? If you as a brand want to avoid that your affiliates are going out promoting God knows what. And then after a month, the sales drop to the bottom. You as a brand, I think also have to take a certain amount of responsibility, communicating brand guidelines, communicating the vision that you have for your products, and then make sure that your affiliate group sticks to that. So it would be fantastic to have your tool be able to do some of that work.
Sam Royle (45:19.705)
soon.
Sam Royle (45:23.919)
Yeah, I mean on the roadmap we’ve got like a bit of brand safety stuff that we’re working on at the moment where we can start to, it’s very, very early stages. I wouldn’t even want to dare give you a date of when it would be completed, but being able to look at content before it goes live, so have creators upload content, have it run it through our computer visuals and basically flag any signs of what could be damaging for brands, what could be misinterpreted, et cetera, just to kind of flag that brand safety element of it.
Moritz Schröder (45:55.146)
What kind of other innovations are you looking forward to in the creator economy going forward? What kind of tech do you feel like is still missing, but you either build it yourself in the future or you know other people are working on it. What do you think is really lacking right now and will really take this industry to the next level?
Sam Royle (46:01.454)
Thank you.
Sam Royle (46:13.977)
So I think one of the things that we’re working on, which I’m really excited about, is from a computer visual perspective. And just generally the way that AI is, so from my perspective, one, I’m a strong believer that AI content creation is not gonna be a real thing, to be honest with you. It will be in terms of producing TV advertisements and actual branded content, for sure. But for me personally, within the creator economy,
As I said before, creators build an audience. doesn’t matter if you can create 20 pieces of content every hour, you still have to build an audience. People buy from people, people buy from people they trust. That fundamental kind of psychology of making purchasing decisions. I don’t think that AI-generated content is going to bridge that gap, at least not in my lifetime. Although it’s expanding pretty quick, so let’s see.
Where I think AI is having the most impact and what really excites me though, is when we look at really dissecting videos, so from a computer visual analytics perspective, we’re looking now at kind of really trying to understand like, go beyond just like data, but look at kind of emotion in video. So when we look at like kind of the emotion, the tone of voice, what is driving human connection to this particular video.
I think that for us is something that like, you know, if we can crack that, that will really help us kind of from a creator identification perspective, help us align creators to brand so much more. So that is that, that’s that’s brand messaging, brand tone of voice, like brand alignment to creator. And that’s where it will happen. You know, that’s where that the magic will happen where you can get so clever with your creator suggestion, creator recommendations, that you just know that like there’s complete alignment.
So that’s something that I’m really excited about. I think what I’m massively excited about in terms of the entire sort of social commerce ecosystem is the moment that Metta, YouTube, and other social platforms finally decide to just pull the trigger and just go all out war on TikTok. I think like look, TikTok has got a massive head start. I do think that like, you know, Instagram.
Sam Royle (48:34.287)
YouTube like probably even snap and stuff like that will introduce this commerce channel I think it’s like kind of like, you if you look at like kind of China for example, like how you have like WeChat which is like the everything app like I think these so big social media giants I appreciate obviously like YouTube is part of you know, Google etc I think to stay relevant and to stay big they need to start adding New things to them, which is how we change with consumer behavior, right? So it’s like the reason that tick-tock launched tick-tock shop in the Western world because it started to see
lots of social commerce challenges. Like, you know, had things like, shop my or LTK and stuff like that. Like these were all like challenges to that social commerce space. So they, they, as a platform, they already own distribution, right? So they need to own the commerce side of it as well. And I think the other social platforms will move into this space within the next couple of years.
Moritz Schröder (49:26.226)
That’s going to be so interesting to see if they do and when they do, if they do it so successfully because, Instagram, Meta and also YouTube, they have been launching these, platforms to some extent and, had the possibility to do shopping to some extent on their platform, but it never quite took off and they actually back paddled at least Meta did with Facebook and Instagram, right? Took it off again. Now YouTube is making a push for YouTube shopping.
but it really doesn’t have the same feel to it as TikTok Shop yet. That might change, but I do also think they would have to invest quite heavily into infrastructure and then things like fulfillment, et cetera, on top of it, like TikTok Shop already did. It also seems like their brands and their companies focus a lot on AI right now, which clearly is everyone’s hype.
but if you do focus as much on AI, you miss out on other trends, right? That might fly a little bit under the radar. So gonna be interesting if they’re gonna be able to actually catch up to TikTok shop when they plan to.
Sam Royle (50:33.647)
It’d be really, it’s going to be, they will, look they will, because they have, the most challenging thing with this is distribution, right? 2017, Amazon had a product called Spark, right? Failed miserably. That was basically the first version of social commerce. was Amazon are experts in commerce, they are terrible at social media. I mean, they bought Twitch, which Twitch is very good, right? But they’re not very good at building their own social products, right?
but they tried to launch Spark as an interactive way of consumers to shop for a social feed. So the most challenging thing about this ultimately is the distribution. YouTube, Instagram, et cetera, they have the distribution already. TikTok have almost given them an easy route to market because TikTok is already educating the creators. Honestly, when we first started with TikTok Shop in the Western world, the creator education thing to tell people, listen,
I know you used to get paid 10,000 pounds to do a post, but we’re only going to pay you 5,000 pounds now, but you’ll also earn 10 % on everything you sell. That education piece was an absolute pain. Like it was so difficult to educate creators, but TikTok shoppers already educated the brands. They’ve educated the creators. They’ve basically handed it, not on a platter per se, but they’ve basically handed it to Instagram and YouTube. Say, listen guys, all you need to do is sort out the film and distribution and payment processing within your platform and you’re off to the races.
I just think obviously like, know, Meta’s very distracted with AI as a business. So is Google, to be honest with you. It’s a race that they don’t want to lose. yeah, I think they will allocate resources to it over 2026. I think 2026 will probably be year of that explosion.
Moritz Schröder (52:22.451)
Where do you think the industry will be five years from now? If you look forward to 2030, what does social commerce look like?
Sam Royle (52:30.095)
Yeah, so I think we already see the decline of linear TV and we see the rise of CTV when it was streaming platforms, et cetera. think as AI evolves, one thing that will do for us as humans is give us more leisure time. And I think what’s really important to remember is like, is how we choose to spend our leisure time. And I think that means attention on CTV and also on social media is going to increase as well. So we’re to be spending more time on these platforms, cetera.
The idealistic person will say, we’ll spend more time with people in real life. Let’s just be realistic here. We’ll spend more time on TikTok. What I think happens is most, if not all brands are now selling through social media and are selling through CTV. And we get so clever with programmatic advertising and algorithms that when I see an advertisement in between, you know, a program that I’m watching on Amazon Prime, instead of seeing a generic
piece of advertising to say a clothing brand, see one of my favorite influencers showing that clothing brand with the ability to purchase it straight away. I we’ve already seen this. I was watching Amazon Prime last night and I can literally buy stuff through Amazon whilst I’m watching in stream right now. And I think we get to a point where you’re watching TV shows where you see, example, like say we talked about David Beckham the other day, right? Sorry, earlier on in this podcast.
I’m watching a documentary on him and he sat down talking to camera and he’s wearing a jumper. That jumper’s un-shoppable. Like this is the world I think we moved to where we enable the transaction like that for the customer. It’s like really meeting the customer where they’re at and advertising commerce just completely merged.
Moritz Schröder (54:18.064)
Yeah, I think that’s something that five years from now we will look back at and think that was so obvious. And how come we didn’t have that until very recently? Because as you said, I mean, you also have Netflix and other streaming platforms push out their shows and their documentaries to such a large audience and it becomes a
Sam Royle (54:25.583)
Thank you.
Okay, go ahead.
Moritz Schröder (54:40.486)
a point, really a cultural phenomenon, right? Everybody’s watching Squid Game. Everybody’s watching David Beckham documentaries and everybody is looking at, let’s say David Beckham in one shot and is like, damn, that’s a really nice jacket. I want to have that. So it totally makes sense to make that as frictionless as possible to just go and buy it. Same with social media. I mean, you do have shoppable posts on Instagram and such, but it
still has a lot of friction in my opinion that should and could be removed. So by the time you’re able to just tap a button and get it delivered home, I think we’re gonna definitely see that space explode. It’s also interesting just to linger on the streaming platforms for a second to see how Netflix, for example, is now bringing podcasts onto the platform, right? So you’re having the creator economy really being…
Sam Royle (55:14.649)
you
for
Moritz Schröder (55:33.315)
elevated to the next level and reach a much wider audience than they already have. Obviously there are huge podcasters on platforms like YouTube, but to then be on Netflix to my eyes really takes it to that next level where we don’t even know where this will lead to.
Sam Royle (55:44.975)
you
Sam Royle (55:51.663)
Absolutely. think, and again, this is how, I mean, we’ve also seen Netflix is bidding for the Premier League rights in the UK, right? So these platforms are recognizing, from a CTV perspective, they’re recognizing that linear TV is really struggling, right? They’re recognizing that stuff is up for the taking, whether it’s sporting rights, rights for other types of TV shows, et cetera, but also, like you said, the create-com in the podcast space.
Moritz Schröder (56:00.151)
Right.
Sam Royle (56:21.217)
It’s like, know, mean, Spotify did it so well, like for example, Spotify with Joe Rogan, for example, a huge deal they did with Joe Rogan to exclusively just be on Spotify, right? It’s basically the new evolution of media broadcasting, right? So this is the new form of media, but the broadcasters aren’t your ABCs and CNNs, et cetera. It’s your platforms, the platform’s own distribution, whereas previously it was the broadcasters that own distribution.
Moritz Schröder (56:53.487)
Yeah, I mean, for sure we know 2030 will probably look wild from our current point of view. I think a lot will have changed also with AI really taking off. I’m a little bit more concerned than you honestly about AI taking over content creation. And even if it doesn’t quite get to that point, if AI is then editing and suggesting how to position yourself in your clips then to
Sam Royle (56:53.807)
I’m going to keep going.
Yeah, there should be a break.
Moritz Schröder (57:23.192)
some extent, it still might feel like AI, but I do hope that we don’t lose that human connection. We don’t lose that human touch. I think social commerce in a way will actually make that happen and make it possible to still have that personal relationship through, for example, live shopping, where you’re able to listen to someone for hours on end, if you want to, and not have to go through Sora through created clips that might be flooding the platforms.
Sam Royle (57:50.831)
Sure.
Moritz Schröder (57:53.082)
So I for one really hope that social media and also social commerce stays as human as it currently is. And maybe is like a counterpart to DAI created stuff on the other end.
Sam Royle (58:01.775)
Absolutely, yeah, for sure.
Moritz Schröder (58:07.802)
Sam, lovely talking to you. It’s been a blast. Where can people find you? Where can people check out your SoSquared agency and then also the tech platform you’ve been building?
Sam Royle (58:17.613)
Yes, I’m most active on LinkedIn. So Sam Thomas Alexander Royal on LinkedIn. And then also from a from SoSquared perspective, we are SoSquared on both TikTok and Instagram. I think that’s where we’re probably most active in terms of company content. But yeah, personally LinkedIn, the business, TikTok and Instagram.
Moritz Schröder (58:40.344)
Awesome. Appreciate you, man. Thanks for coming on.
Sam Royle (58:41.103)
Thanks having me.