With over 1 billion monthly active users using TikTok, it is no surprise that businesses are investing heavily in TikTok advertising. Still, making the decision to try a new digital advertising platform carries costs, and risks.
Do you have the time and budget to learn, and experiment on, another platform? Will it require you to take valuable advertising dollars from places where you’ve had success, and how will that affect your overall return on ad spend (ROAS)? How long will it take you (and how much will it cost) to build an audience on TikTok and generate a positive return? Those are all valid concerns.
Still when you hear about some of the results businesses are reporting from TikTok marketing, there are compelling results to try advertising on the platform.
“We've seen a lot of success with TikTok advertising for our small business,” says I'm Aviad Faruzo, an entrepreneur and CEO of online jeweler Faruzo. “It's been a great way to reach a new audience and grow our brand. We've been able to target people based on their interests, which has helped us connect with more potential customers. We've also seen a lot of engagement with our ads, which has helped us boost our online presence.”
TikTok Ads Overview
Like most social media platforms, TikTok wants to make it as easy as possible for businesses to advertise with them so you have a good experience, add the platform to your marketing strategy, and run more ads in the future.
To try to help businesses have a good experience advertising on the platform the company has established TikTok for business along with TikTok Creator Marketplace (which makes partnerships between TikTok influencers and businesses easier).
Pros and Cons of Advertising on TikTok
Many TikTok ad types to choose from
Easy to find and work with TikTok influencers
Highest engagement rate among social media platforms overall
Can be time intensive to create exciting, visually appealing ads
Your audience may not be on TikTok
Engagement rates vary by industry
Requires testing to find the right formula
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There are numerous factors to help you evaluate whether it’s right for your business. While the TikTok audience skews younger, for example, Wallaroo Media reports they are “aging up.” If you target an older demographic, you may find it harder to build your audience quickly, but you may also benefit in the long run by establishing a following now rather than waiting.
How to Advertise on TikTok
Advertising on TikTok is straightforward. To get started create an account with TikTok Ads Manager.
You’ll be prompted to choose Simplified Mode or Custom Mode, and you can switch between them anytime.
If you choose custom mode, you’ll next choose your advertising objective from the following:
Consideration (traffic, video views or lead generation)
Conversion (app promotion or website conversions)
You can then create split tests and set your ad budget, which can be either a daily budget or a lifetime budget. Currently the minimum is $50 USD.
You’ll need to create a TikTok pixel code which you will need to put in your website’s header for tracking purposes. You can create one manually through TikTok or through a variety of partners such as Google Tag Manager, Shopify or SalesForce Commerce Cloud, among others.
From here you will pick ad placement and whether you want to use automatic placement (generally recommended.
Under Creative Type you’ll need to select whether you want Automated Creative Optimization. With this option, you can upload images or videos, write some ad text, and select your call-to-action (CTA) buttons. TikTok will then combine those assets to create multiple versions of your ad which will be continually tested and optimized to find and present the best performing version.
From there you can choose your demographics. If you select automatic targeting you’ll only choose language and location. If you choose custom targeting, you’ll choose your custom audience by location, languages, gender (male or female), age range, household income, audience (including lookalike audiences), interests and behavior (including video interactions, creator interactions and hashtag interactions).
Then you’ll pick your budget and schedule. You can choose a daily budget or lifetime budget (currently starting at $50USD) and two bid strategy options: lowest cost or bid cap. Lowest cost is designed to maximize your number of results, while bid cap keeps your average cost per result lower than your bid. If you’re not sure which to choose, TikTok offers a link to best practices.
The last step is of course to create your ads. You’ll first get a choice to use Spark Ads, a native ad format that allows you to use organic video from any TikTok ad– yours or others (with permission).
From there, you can create a single video ad or ad collections. You can preview your work right on the page.
Add up to 100 characters of text, choose your destination (your website or a TikTok Instant Page), include your optional tracking details and submit for approval.
There are 6 different TikTok ad formats to choose from:
Branded Effects Ads
Branded Hashtag Challenge Ads
Brand Takeover Ads
The steps are similar in Simplified Mode– just simpler. You’ll see fewer options for each step which may make it easier for beginning advertisers to get started, but will probably not be the first choice for experienced digital marketers.
Using the TikTok Ads Manager
TikTok’s Ads Manager is not only easy to set up, but also easy to use. In an effort to make setting up your ads manager account fast and easy, TikTok provides a step-by-step guide and a YouTube video that takes you through all the steps, making it easy for visual learners.
Once your account is set up, all you need to do is go through the steps outlined above to get your TikTok ads up and running.
It is worth noting that TikTok will need to verify your business account and website before you can start using it. Due to the verification process, make sure you take the time to fill out all the information correctly to avoid being denied. TikTok’s website mentions several problems that can result in your ad account not being approved, including a website name that doesn’t match the business name, an improper website URL format, a website that doesn’t match its requirements, or one that sells products incompatible with their terms of service.
TikTok also strongly recommends that you have a TikTok account to get a feel of the platform. This helps businesses understand what user-generated content is doing well, types of video ads and how each one appears on the platform, etc.
Faruzo finds the TikTok Ads Manager helpful. “One of the great things (about it) is that it allows you to target your audience very specifically,” he says. “For example, you can target people who live in a certain area, or who have engaged with your account in the past. This makes it a great tool for promoting your business or products.”
Tips for TikTok Ad Campaigns
Tip #1: Monitor Your Metrics
As you would with any social media marketing campaign, you need to keep close tabs on your metrics. The metrics you decide to track will be influenced by your campaign objective, but generally you’ll want to track:
Conversions or app installs
Cost per click
CPA (cost per action)
CTR (click through rate)
Total cost (total ad spend)
All of these metrics, and many more, can be found in your TikTok Ad Manager account.
Remember how TikTok recommends you also have a TikTok account? If you set your TikTok account (not your ads) to business mode, you’ll collect basic metrics like video views, comments, and reach alongside more specific metrics such as the gender breakdown of your followers, top territories, and what times/days your followers are most active.
Having this type of information is extremely helpful before you run your first campaign as it can help you target TikTok users that are similar to those already engaged with your account.
Tip #2: Follow The TikTok For Business YouTube Channel
We mentioned the TikTok ads account video earlier, and the TikTok for Business YouTube Channel has a lot of helpful videos. They cover a wide range of topics from specific tips like TikTok Pixels and Events to general ones such as how small businesses are finding success on the e-commerce partner platform. This channel is definitely worth subscribing to if you want some creative inspiration with your business’ TikTok account.
Tip #3: Engage & Entertain
TikTok was created for entertainment and everyone going to the platform is there for just that. Therefore it is important that your TikTok videos are entertaining, to the point, and accessible. From there you can create brand awareness and drive people to a landing page, but always keep in mind they are there first for entertainment.
Try out different video formats, present your content in different ways, and look for trends you can hop on. The algorithm will always like videos that are generating genuine engagement.
How do TikTok Ads Work?
The basic steps to advertise on TikTok are to create a TikTok Ad Manager account then create ads. There are a variety of formats you can test. For example, a branded effects ad will use stickers or filters that other TikTok users can use to try to generate interest, while an In-Feed ad will simply be the fourth video a user sees when scrolling through the videos in their ‘For You’ feed.
What is consistent across ad types is there is a campaign objective behind that ad, target audiences, and, of course, creativity, effort and ad dollars.
How Much Does a TikTok Ad Cost?
You’ll see a lot of different estimates and ranges for the average CPC and CPM on TikTok. BeProfit, for example, estimates the average CPC to be about $1 and the average CPM to be about $10, while other companies put these numbers both higher and lower than this estimate.
What we do know is that a campaign on TikTok starts at $50 while an ad group starts at $20 a day. Beyond these numbers, though, you’ll have to test to find out what it costs you to advertise as well as to discover your Return on Ad Spend (ROAS).
Is TikTok a Good Platform For Advertising?
TikTok can certainly be a very good platform for advertising. The platform has over a billion active monthly users and a high percentage of these users are based in the U.S. Plus the platform offers different types of TikTok ads to choose from, tracks a wide range of metrics, and is relatively similar in terms of pricing to other social media platforms. But, this doesn’t mean TikTok is the right advertising platform for everyone.
Businesses that have an older target audience, who don’t want to invest in creating video and visual ads, or in a country not well-represented in TikTok’s demographics may not find TikTok to be a good advertising platform at the moment. If you’re targeting Gen Z and younger millennials, TikTok could be the perfect platform for you.
That doesn’t mean you don’t want to establish a presence though. Claiming your business name on the platform and even scheduling posts that you develop for another social media platform such as Instagram or Pinterest could be a low-effort way to get started.
How Does TikTok Make Money?
TikTok makes money in two ways; through ads and in-app purchases. It isn’t surprising that advertising revenue is a big revenue source for the company, but what is interesting is that the company also offers the chance for users to buy virtual coins. Virtual coins, which can be used to buy virtual gifts for others, is very different from anything seen on the other main social media platforms.
What Is The Most Popular TikTok Ad?
There isn’t one TikTok ad type that is necessarily more popular than all the others, but there are certainly some companies that have run extremely successful ad campaigns.
Take just a couple of examples shared on the StoreYa blog:
Ebay created a campaign that reportedly resulted in over a billion views and had participation from over 700,000 TikTok users.
K18, a haircare brand, created tutorial videos that resulted in an average 70% increase in daily sales and an increase in followers from 2000 to 20,000.
And yellowHEAD, an AI performance marketing company, highlighted several success stories, including:
Balmain generated 240,000 viewers for their TikTok fashion show through in-feed ads.
LOTTE XYLITOL used Takeover Ads in tandem with Branded Effects to generate over 124 million views.