TikTok’s ad revenue climbed to almost $12 billion in 2022 and is expected to rise to over $18 billion in 2023. But it isn’t just the sheer volume of ads that provide all this revenue. It is also the cost of certain TikTok ads.
While TikTok can be a great platform for some businesses, some types of TikTok ads can get expensive, fast. There are, however, ways to include TikTok ads in a more modest digital marketing budget and still get results. Here’s how.
How Much Does It Cost To Advertise On TikTok?
Pricing of TikTok ads depends on several factors including the type of TikTok ad and whether a brand is employing popular influencers. The average TikTok ad CPM is $10, while the average CPC is $1. CPM stands for “cost per mille,” or cost per thousand impressions. CPC refers to cost per click.
There are several types of ads to choose from:
Self Serve Auction Ads
In-feed ads are one of the most popular ads placements. These ads appear on the user’s For You page. (Other placement options include detail page, post-roll or story). For self-serve auction ads, you’ll use the TikTok Ads Manager and you’ll bid on ads in an auction-based system.
TikTok Spark Ads is a native ad format that allows advertisers to boost organic content. These video ads allows the same user interactions as organic videos, so users can comment, share, follow your brand and more.
Reserved Media Placements
Reserved media placement ads include brand takeover ads, topview ads, and branded hashtag challenges. These have certain location and budget requirements, and can be a bit pricey for small businesses to get started. For example, it can reportedly cost in the low six figures to host a hashtag challenge, while brand takeovers may start in the mid-five-figures for the first day alone.
For some businesses, spending that much is no big deal. But for small businesses, advertising costs such as these may equal their total budget for all their social media marketing in a month or a year.
If you’re working on a smaller budget, or if you want to measure your Return on Ad Spend (ROAS) before you invest more heavily, you’ll likely want to use the TikTok ads platform to test various formats and audiences.
How Much Are TikTok Ads Per Day?
In the TikTok Ads Manager, you can set a daily or lifetime budget for your campaign. At the campaign level, a daily campaign budget must start at $50, though later in the set up process, TikTok allows a daily budget of $20 or more.
While these minimum levels are low, most advertisers aren’t going to gather enough data through analytics without robust testing, though. Unless you are prepared to budget enough to create and properly test TikTok ads, you may want to invest in creating organic videos to grow your presence first.
Are TikTok Ads Worth It?
TikTok advertising can be well worth it for certain businesses, but certainly not for all. Before a business chooses to engage in TikTok marketing they will want to consider:
Demographics: Before spending more on TikTok ad campaigns it is worth seeing if your target audience is those on TikTok to begin with. The TikTok platform tends to skew female and towards a younger audience, 18-24 years old specifically, although TikTok isn’t necessarily allowed to track those under 18 which affects the demographics a bit. Of the billion plus active users on the platform most are in the U.S. although the platform has global reach.
TikTok Followers: It is always a good idea to use a social media platform before you run ads. Having a TikTok business account will allow you to see what TikTok videos are doing well, what your engagement rate is for user-generated content, the types of response and conversions you are able to get without ads and more. Building your business account organically and seeing what your followers like before investing in ads should help you create ads that will perform well and will give you some credibility when others come to your page.
Marketing Strategy/Campaign Objective: Before starting any type of marketing campaign you’ll have a wider marketing strategy in place. What’s your call to action? App installs, visits to a landing page or something else? What’s your ad objective for your next campaign? TikTok campaign objectives in the simplified mode include: website conversions, traffic, community interaction and lead generation. Custom Mode advertising objectives include: reach, traffic, video views, lead generation, community interaction, app promotion and website conversions.
Advertising Costs: There are lots of advertising platforms to choose from. You’ll need to determine how the results you get from TikTok compare to other platforms.
Can You Get Paid For Ads On TikTok?
In addition to advertising on TikTok, there are additional ways to make money from ads on TikTok. Creators who are looking for ways to make money may want to partner with businesses that can help them monetize their creative efforts.
Branded Content: On TikTok, branded content refers to content that is being produced as part of an agreement between two parties that involves the exchange of goods, services, or money. When it comes to branded content, whether it is an individual or group of people, a small business or big business, the content must be marked as branded content so that an ad disclosure will be displayed on the video content for viewers to see.
TikTok Creator Marketplace: For TikTok influencers or aspiring influencers that want to get paid to collaborate with brands, TikTok’s Creator Marketplace is a great place to start. The platform allows companies to connect with TikTok users that are looking to collaborate on an ad campaign. Those looking for collaborators can search on topics such as region, topic, average views, and much more. Before choosing a creator to work with, your business can see what the minimum budget will be to work with the Creator and you will have access to additional analytics on the platform.
TikTok Creator Fund: Outside of ads, the TikTok Creator Fund is a way for those with TikTok accounts to make money. The fund is open to those who have over 10,000 authentic followers, are over 18 years old, have had at least 100,000 authentic video views in the last 30 days, are complying with the company’s guidelines, and are in one of the six approved countries (U.S., UK, Germany, Italy, France, and Spain). The payout formula includes a number of metrics such as number of views and engagement but beyond that it is difficult to predict how much you’ll make.