TikTok can do so much more than just show you the funniest moments caught on camera or clips of the latest dance moves. With its massive community of over one billion active users across the globe, it offers limitless marketing potential for businesses and brands.
If that’s not convincing enough for you, consider this: TikTok advertising revenue was estimated at $340 million just one year after the social platform’s inception in 2018. Last year, it reached a whopping $11.64 billion.
What’s even more impressive is that industry experts believe it will balloon up to $23.58 billion in 2024.
If you’re ready to jump into the TikTok bandwagon, we’ve got you covered with this comprehensive guide.
What are TikTok ads?
Before we dive into the “why” and “how” of TikTok marketing, let’s take a few steps back and look at the platform’s origin story.
It all started in 2016 when a Chinese company called Bytedance launched A.me, an app that lets its users create short videos and then share them afterward. Three months later, they rebranded it to Douyin.
Not long after this, Bytedance made another big business decision and renamed the app TikTok, a modified version of the sound that the clock makes. This was a nod to the fact that it features short videos packed with minute-by-minute action.It was also a great marketing strategy, as the new name was more appealing to the international audience that Bytedance was trying to tap into in 2017.
TikTok was a hit, and it was rapidly gaining popularity. However, it had to share the limelight with Musical.ly, another Chinese app based in Shanghai that had an office in Santa Monica, California.
Musical.ly was a bit similar to TikTok because it also served short-form videos. What made it different was that it let its users record themselves while lip-syncing and dancing to the latest songs. It also had a loyal following in the United States, which Bytedance coveted.
So in 2017, the people behind TikTok bought Musical.ly and added some of its features to their own. They have since diversified its content, attracting viewers and users from all walks of life.
This is what makes TIkTok, as we know it today, a very powerful marketing tool. Whatever industry you are operating in or the niche market you are serving, you will surely find your target audience here.
Aside front being able to tap into its extensive reach, you also have access to different TikTok ad formats, all of which are creative and compelling. There are standard infeed ads, brand takeover ads, hashtag challenges, and more. Whatever type of audience you are trying to reach, TikTok has the right ads for you, and we’ll get into this more later.
Note that TikTok ads are not free, which is the case for probably all other social platforms. That said, you can set up an account without paying any fees.
Do TikTok ads work?
Whatever product you’re selling or service you’re offering, you need to connect with your target audience. It’s the only way for you to generate leads that you can later convert into repeat sales or even subscriptions.
However, note that it’s not enough to be seen by as many people as possible. You should be able to reach a specific group of consumers who are likely to purchase from you or hire you.That’s what makes social media platforms like TikTok effective marketing tools. Going in, you have a pretty good idea who will see your ads.
TikTok is known for its popularity among younger people. Around 25% of its audience is made up of 10 to 19-year-olds, while 22.4% of them are aged 20-29. That means almost half of TikTok users are under the age of 30. So if your brand caters to this demographic, you should seriously consider investing in TikTok ads.
What if your ideal customer is a bit older? Should you skip TikTok and look for other platforms to launch your marketing campaign?
Around 21.7% of TikTok users are between the age of 31 and 39, While 20.3% of them are aged 40 to 49. The remaining 11% are 50 years of age or older. Based on these figures, investing in TikTok ads is not such a bad idea either.
Remember that the number of monthly active TikTok users is over a billion, which is staggering, to say the least. So even if you consider the smallest group (those over 50), we’re still talking about millions of people.
On top of this, TikTok ad formats are versatile, and you won’t have any problems tweaking them to suit your needs or business goals. Moreover, the platform offers clever user targeting options.
It’s no wonder that two out of every three users have a positive response to TikTok advertising. Half of them think that the ads are authentic, fun, and engaging. As a result, a third of them become curious enough to look up a product or brand after seeing its ad.
So whether you run a small business or a big corporation, there’s no doubt that TikTok ads should be a part of your marketing strategy. It is a relatively new channel compared to the likes of Facebook and Instagram, but industry giants such as Nike and Netflix regularly advertise on it already.
If you have a limited marketing budget, this should not stop you from advertising on TikTok. You don’t need elaborate production capabilities to come up with a compelling video. All you need is some creativity and knowledge about your target audience, and you’re good to go.
How much do you pay for TikTok ads?
If you’re like most business owners, there’s a good chance that you're obsessed with numbers. Here are some TikTok Advertising figures for you to sink your teeth into:
- The average engagement rate for TikTok ads is 5% to 16%, which is much higher than in other platforms (1% to 2%).
- The average CPM or cost per mile (a thousand impressions) for TikTok ads is $10. An impression is counted every time someone sees your ad on social media platforms, search engines, or other channels.
- The average CPC or cost per click for TikTok ads is $1. CPC is counted every time someone clicks on your ad.
- If you want to launch an ad campaign on TikTok, expect to spend a minimum of $500. That said, you can create videos for free using tools like Canva.
- An influencer post on TikTok would set you back anywhere between $5 and $2,000.
TikTok has three pricing options for its ads: CPC, CPM, and CPV. CPV stands for cost per view. It is a bit harder to pin down compared to the other two pricing models, but TikTok relatively offers favorable rates for it compared to other platforms like YouTube. That’s because it allows advertisers to set a maximum bid for a thousand two-second or six-second video views.
Are TikTok ads worth it?
Whether you’re a business owner or a marketer, one of the first things that will enter your mind when it comes to TikTok ads is if it’s worth it. So allow us to save you the suspense — it is.
Here are some of the many benefits that come with this marketing strategy:
1. An engaged audience
One of the biggest advantages of TikTok is that its users are very involved. As a result, companies that invest in this platform see a higher level of openness to brand messaging and calls to action.
Plus, studies show that TikTok ads break through a lot more than TV and digital video ads do. That’s why the platform is an excellent venue for marketers where brands and businesses are more directly connected to in-market sales.
What makes TikTok so effective is that it offers a healthy combination of relevance and engagement. It has a way of delivering user-preferred content and a strong focus on shorter video formats, making it very tempting for users to click on content after content.
2. Scalable
There was a time when you could easily scale up your Facebook ads without having to pay through the nose. However, with the level of competition on the platform, those days are now long gone.
That is where TikTok advertising comes into play.
TikTok’s user base of over a billion is nothing short of amazing, especially for businesses that are trying to reach their target audience. At the same time, the platform is still young and has a lot of growth to look forward to. It means that there are still a lot of opportunities you could explore marketing-wise over the next several years.
3. Great platform for influencer marketing
TikTok has a feature called Creator Marketplace, where businesses can find, contact, and work with the top influencers on the platform. It makes influencer marketing easier to execute and removes the need to rely on third-party services, which can get expensive.
You could send the campaign name, brand, collaboration description, and all other relevant information straight to the creator. This setup gives you control over the conversation and interaction with the influencer. According to the Get Hyped, streamlines communication and enhances campaign effectiveness. In addition, TikTok Creator Marketplace, or TCM, has a number of other features, including authenticated data that comes from its proprietary reporting tool. As a result, it provides brands with all the information they need to run successful marketing campaigns.
Another thing that makes TCM a great option is that influencers here are known for having sway over their followers. So they could easily have their viewers hooked to their videos and scrolling for more.
Given all the above benefits, it is clear that investing in TikTok ads is a sound marketing move.
4. A lot of room for creativity
If you are the creative type who likes to come up with new things, then TikTok is the perfect place for you. It has six creative tools that can help you do more with your current skill set. Here are they:
Video templates
This tool lets you assemble different visual elements to create a compelling ad, including images, logos and text, access to an extensive music library, and more. It cuts the time you need to spend on creating ads and helps you stretch your marketing budget.
Smart video
Smart Video is an AI-powered tool that analyzes your materials and automatically comes up with a video creative.
Landing page to video
With this tool, you can capture amazing images and combine them with music from TikTok’s extensive library to generate professional-looking content for your landing page.
Smart video soundtrack
Using AI technology, this tool adds music and rhythm to videos to help convey a strong brand message.
TikTok ad studio
This tool requires a bit of a learning curve, but once you get the hang of it, you will be able to add video effects, use filters, set video timers, and do a lot more.
Automated creative optimization
With this tool, you can manage your ad campaigns more effectively. It looks for the best combinations of all your creative assets to optimize performance. What’s more, it does everything within minutes and without the need for AB testing.
TikTok advertising guide
Are you excited about TikTok advertising yet? If so, just follow these steps to put together an effective campaign.
1. Set up a business account
The first step is to create a business account with TikTok. Just enter your email address and nominate a password, and then press Sign Up.
2. Create your first campaign
Next, choose from the available marketing objectives, including reach, video views, traffic, and conversion. They all fall under one of three categories: awareness, consideration, and conversion. For instance, you can drive higher traffic and increase installations, which is in the awareness stage.
Note that you can create up to 999 campaigns in one TikTok account.
3. Choose campaign name and set your budget
After setting your goals, you need to come up with a campaign name and select a budget. Then, you can set either a daily or lifetime limit on your ad spending. It’s also possible to remove the restrictions altogether from your ad delivery.
4. Create ad groups
In this step, you need to first decide where exactly on TikTok your ads will appear. There are two ways for you to do this. One is to tell TikTok where you want it to place the ad, and the other is to let it decide automatically.
If you use the automated system, TikTok will optimize your ad placement based on the campaign objectives that you set.
Next is the selection of your preferred creatives, which TikTok can also do for you automatically. It can create a combination of images, explainer videos, ad text, and other assets.
From there, you need to identify the type of audience that you want to target with your ads by creating either a custom or a lookalike audience. This type of ad targeting uses your audience’s demographics, like age, gender, interest, and even the operating system they use.
After this, indicate the budget for your ad and choose a range of dates to run it. Finally, choose a bidding process and set your optimization goals. You could also add tracking links in this step to help you monitor the performance of your ads later on.
5. Create your ad
Now comes the fun part: creating your ads. Start by choosing an ad name and ad format. There are two formats for you to choose from: images and videos.
The next step is to select the ad type from the following options:
- In-feed ads
- Brand takeover ads
- Top view ads
- Branded hashtags ads
- Branded effects ads
- Collection ads
We will be talking more about these ads in the next section.
Once you have chosen your ad type and form, upload your creative media or create a new video. Finally, add tracking URLs using third-party tools and TikTok Pixels.
Different types of TikTok ads
To maximize the benefits of TikTok marketing, you must understand the different types of ads offered by this platform.
In-feed ads
These ads are displayed in the users’ native news feeds as they scroll through the curated content.
Brand takeover ads
This type of ad pops up and covers the entire screen as soon as you launch the TikTok app.
Top view ads
Similar to brand takeover ads, top view ads pop up once you open TikTok. The only difference is that they do not cover the entire screen.
Branded hashtag ads
This type of ad involves encouraging TikTok users to record themselves doing something that advances a certain brand and posting it with a certain hashtag.
Branded effects ad
With this type of ad, businesses can design an ad using their own custom filter.
Collection ads
This type of ad is not available to all users. It is designed to help in the search or discovery of products using mobile devices.
To sum up, TikTok is a powerful social and marketing tool that can help you reach your target audience. If this is not yet part of your marketing strategy, you can get things started by following the steps outlined above.Also, consider using third-party reporting tools to help optimize the performance of your ad campaign on the platform. Here at Reporting Ninja, we can help you create intuitive TikTok ad reports within minutes.
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