Are TikTok Ads Effective & Worth the Investment?

If you haven’t noticed the unstoppable rise of TikTok in the world of social media platforms, there’s a good chance you’re currently living under a rock.

(And if you are, you’re probably not running an e-commerce business. So this guide might not be for you.)

TikTok is continuing to grow at an incredible speed, having recently reported 1 billion monthly users active on the platform. That’s a 45% increase from the previous year. 

Unsurprisingly, the platform is attracting a lot of attention from digital marketers hoping to tap into its unique design and colossal user base.

But are TikTok ads worth it? And can they benefit your business? 

Let’s dive into the world of TikTok advertising and find out.

What are TikTok ads?

TikTok ads appear in-feed in a range of different formats. 

Standard video placements (e.g. feed ads and TopView ads) are popular among advertisers. They allow brands to drive massive scale, high levels of engagement, and increased landing page traffic. 

(Source: TikTok.com)

However, more bespoke activations (such as Hashtag Challenges and Branded Lenses) are also available to advertisers with bigger budgets. 

One thing is consistent across every TikTok ad format. The platform places a big emphasis on high-quality video content and engaging visuals. 

The TikTok feed is a busy place, and users can rapidly scroll through mountains of content. 

If you’re going to stop your prospects in their tracks, you’ll need creative assets that instantly capture attention and highlight your product benefits. 

How much do TikTok ads cost?

An insanely popular social platform with an enormous audience and creative ad formats?

What’s not to love? 

But let’s tackle the big question here. How much are TikTok ads going to cost? 

Well, the short answer is that it all depends on the format that you’re running. 

The longer answer is that a minimum spend of approximately £400 is required for standard in-feed video campaigns. A minimum spend of £15 is also required for every individual ad group.

Bespoke ad formats (such as Branded Lenses) will cost a lot more to produce and launch.

A Branded Hashtag Challenge can cost upwards of £110,000 to run for a week, while Brand Takeovers can cost an eye-watering £36,000 per day. 

The good news is that you can still deliver exceptional results through standard in-feed TikTok ads. While branded effects can look impressive and generate viral fame, video ads are much more affordable and are still more than capable of driving strong performance. 

What is the TikTok pricing model? 

There are three separate pricing models available for your TikTok ad campaign:

  1. CPC (Cost Per Click)
  2. CPM (Cost Per Mille)
  3. CPV (Cost Per View)

Your pricing model will be determined by your campaign objective. For example, a CPC buy will be best suited for a website traffic or app installs goal. 

Are TikTok ads effective? 

TikTok is already building an impressive track record of delivering strong results for advertisers in a variety of different industries. 

Farmer’s Dog (an online dog food subscription brand) used Spark Ads, a native format, to amplify organic content and promote their TikTok videos to a wider audience.
In just two months Farmer’s Dog managed to reduce their CPA by 62% and increase their conversion rate by 5%. Not bad, eh?

(Source: TikTok.com)

Goodfair (a digital retail brand) utilised User Generated Content and Spark Ads to try and capitalise on its growing organic following to increase conversions.

The brand managed to reduce its CPC by 15.6%, increase CTR by 87.2% and reduce CPA by 50.7%.

(Source: TikTok.com)

TikTok is enabling many e-commerce brands to achieve a variety of different objectives. 

The platform has a huge amount of potential for advertisers. The key is to select the right formats, utilise engaging creatives and target relevant audiences. 

Are TikTok ads worth the investment?

TikTok is still a relatively new player in the paid social space.

Several global brands (such as Nike and Netflix) regularly advertise on TikTok – but these businesses also have near-infinite amounts of marketing budget available.

So are TikTok ads worth the investment for your business? 

The answer is yes. 

Smaller e-commerce businesses are seeing promising results with TikTok advertising, and marketing opportunities are continuing to expand on the platform.

Standard feed ads are affordable, with a relatively low minimum spend for new advertisers. 

This means that smaller businesses can start to experiment with video ads and increase their lifetime budget as they gather performance data. 

Once you begin to gain confidence in the results that TikTok is delivering, you can gradually ramp up your spending and even invest in bespoke solutions if your ROAS justifies it. 

Reaching a receptive audience on a growing platform is a good investment for any e-commerce business, and advertisers can easily take a slow and steady approach. 

7 reasons why you should be using TikTok ads 

TikTok is delivering impressive results for many e-commerce advertisers.

But what makes TikTok advertising so effective?

Here are 7 reasons why ads on TikTok can work for your business. 

1. The scale is huge (and growing) 

TikTok recently reported 1 billion monthly active users on the advertising platform. 

That’s a pretty mind-blowing number. And what’s even more mind-blowing is that TikTok only seems to be gaining momentum.

Advertisers can access an enormous audience of potential customers through TikTok ads and rapidly build brand awareness. 

With the right creative assets and marketing strategy, brands can drive a huge volume of conversions and skyrocket their revenue. 

Plus, TikTok is continuing to expand its advertising options, offering advertisers more innovative formats and opportunities to drive conversions. 

Spark Ads (the TikTok native format) were only launched in 2021, and have already proven to be an effective ad placement for many advertisers. 

2. It’s backed by consumer research 

DISQO, a consumer insights platform, recently conducted a piece of research on the effectiveness of TikTok advertising – and the results are pretty impressive.

52% of users claimed that TikTok ads were fun and engaging, while 66% had a positive perception of TikTok advertising. 

The ability to reach a receptive audience is a huge bonus for advertisers since users are willing to engage with campaigns and don’t view ads as intrusive.

But the good news doesn’t stop there. 

32% of users researched a brand or product after seeing an ad, while the shopping cart value of TikTok users was between 6-12% higher than non-TikTok users.

TikTok users aren’t just happy to engage with ads. They’re also ready to discover new brands and spend their money on the right products. 

Advertisers can also now use the DISQO research tools to measure the impact of their TikTok ads, providing brands with more visibility over campaign effectiveness.

3. There are smart targeting options 

A major part of any successful paid social campaign is accurate targeting.

Luckily, advertisers can access some intelligent targeting options when running TikTok campaigns. 

Standard audience targeting tactics are available, including:

  • Demographic (based on gender, age, location, etc)
  • Interests (based on content engagement, account follows, etc)
  • Device (based on operating system, device type, etc)

However, brands can also create more granular segments through Custom Audiences, which include: 

  • Customer File (based on matches with your first-party data)
  • Engagement (based on ad clicks, ad impressions, ad views, etc)
  • App Activity (based on activity on your app, such as log-ins, purchases, etc) 
  • Website Traffic (based on website actions, such as add to cart, page view, etc)
  • Lead Generation (based on engagement with your Lead Ads) 

A Custom Audience can be extremely powerful for advertisers. 

These segments enable you to reach hot prospects who are more likely to click and convert, increasing the efficiency of your ads.

Click here for more information on TikTok audience targeting. 

4. Creativity is strongly encouraged 

Creative advertising is encouraged (and even expected) on the TikTok platform.

TikTok is packed with users and creators generating innovative and exciting organic content.

Advertisers need to match this creative flair to stand out. Many brands can adopt a more relaxed tone of voice through their ad account to engage with prospects. 

This provides you with a brilliant opportunity to deliver some fun and authentic advertising. Don’t hesitate to try something different on the TikTok platform. 

The most successful brands on TikTok are often those who embrace these opportunities.

By getting involved with platform trends, collaborating with users and brands, and utilising an effective call to action, advertisers can maximise campaign performance.

(Source: TikTok.com)

5. TikTok offers versatile formats 

A major benefit of TikTok advertising is the range of different ad formats available to marketers.

Standard in-feed placements can deliver impressive results for advertisers, as well as impactful formats such as Top View. 

Users are ready and willing to engage with brands, and the design of the platform lends itself to bold and visual executions. A video ad is full screen and highly visible in-feed, so the right asset can instantly capture attention. 

However, if you’re looking for something more innovative, bespoke formats can drive incredibly high levels of engagement.

Activations like Branded Lenses and Hashtag Challenges can quickly go viral if they resonate with target audiences. 

These formats also cater to a range of marketing budgets. So whether you’re a smaller advertiser with a test budget or an established business ready to spend big, there are plenty of options available.

6. The audience is diversifying 

TikTok has a reputation for primarily reaching younger audiences, and there’s certainly some truth to this. The platform has a significant number of Gen Z users. 

25% of US TikTok users are aged between 10-19, and 22% are aged between 20-29. 

However, as TikTok expands its offering, it will inevitably start to attract a wider range of users and appeal to older audiences.

21.7% of US users are now aged between 30-39, and 31.3% are aged above 40. This may seem surprising, but the TikTok audience has continued to diversify over time. 

Although the app is still a brilliant environment for reaching younger shoppers, that doesn’t mean you can’t connect with older prospects who also use TikTok. 

It’s all about getting your targeting right and recognising new opportunities on the app. 

7. TikTok content feels authentic 

Producing effective paid social ads doesn’t require expensive equipment and Hollywood levels of production.

This is particularly true on TikTok. 

Organic content on the platform often feels raw, relatable and authentic. You don’t need a huge production budget to create ads that resonate with your target audience.

In fact, a lower-budget approach can be even more impactful, making your brand feel human and genuinely trustworthy. 

Simple video assets with a good quality phone camera (and smart lighting) can work wonders. Just be sure to focus on your products and highlight your key selling points.

This is also why User Generated Content and influencer marketing can perform incredibly well on TikTok. 

Don’t be afraid to keep things simple with your ads. Just focus on what will resonate with your target shoppers.

(Source: TikTok.com)

Some useful TikTok resources 

Here are some handy TikTok resources to keep you on the right track with your next campaign. 

How to get started with a TikTok campaign

Bidding methods on TikTok 

TikTok case studies for inspiration 

If you’re looking for more information on TikTok formats and ads manager setup, it’s your lucky day. We’ve already written a super helpful guide on that exact subject. 

So, back to our original question. Are TikTok ads worth the investment? 

Yes, they are.

TikTok is still growing as an advertising partner, and this is an exciting time for advertisers to get involved with the platform.

With the right targeting and some engaging creative assets, you can drive exceptional results from TikTok advertising and reach a brand new audience. 

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