About author: Jack Evans brings his extensive experience in digital marketing to the table, specialising in paid social strategies that drive growth for e-commerce and DTC brands.
TikTok is the new behemoth in the social media world and it holds incredible potential for brands of all sizes. If you’re looking to get your products in front of your target audience and drive conversions at scale, TikTok advertising is the only tool you need.
But what results should you expect to see from your campaigns? Are the numbers you need to hit realistic? And how does your current performance stack up against industry averages?
In this article, we’ll walk you through all things TikTok benchmarks, giving you a baseline to motivate your team and drive future performance. Let’s jump in.
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What are Benchmarks for TikTok Ads?
Benchmarks are a crucial part of any marketing strategy, and TikTok advertising is no exception. Benchmarks are a set of metrics used by marketers as an indication of past performance, so they can judge how their strategies are performing against competitors.
Some of the most commonly-used metrics for TikTok benchmarks include:
Click-through rate (CTR): this is calculated by dividing the number of clicks an ad receives by the number of impressions the ad gets (the number of times it’s shown), then multiplying the result by 100.
Cost per click (CPC): this is used to measure the cost you pay each time someone clicks on your ad. On Pay-Per-Click (PPC) platforms like Google Ads, this is usually a fixed amount.
However, on platforms like TikTok where you typically pay for impressions, the higher your CTR, the lower your CPC. This serves as an important measure of advertising effectiveness and cost efficiency.
Cost per Mille (CPM): “Mille” is Latin for “thousand”. So, Cost per Mille shows the amount you have to spend in order to get 1,000 ad impressions (the number of times the ad is viewed).
CPM can be calculated by dividing the total cost of your TikTok advertising campaign by the total number of impressions it receives. CPM is usually used in display and video advertising to show how a campaign is performing at scale.
Conversion Rate (CVR): This is one of the most used metrics in digital marketing. It’s used to measure the overall effectiveness of an ad campaign, landing page, email, or piece of content with the goal of driving action.
CVR is calculated by taking the number of conversions by the total number of content views (typically clicks or visits), then multiplying the result by 100 to get the CVR percentage. A high conversion rate indicates strong-performing content.
Return on Ad Spend (ROAS): this is a metric used in TikTok advertising to quantify the value of conversions driven from an ad campaign against the amount spent on the ads.
It’s similar to ROI, but is usually shown as a decimal. For example, a 167% ROI would be shown as a 1.67 ROAS.
Engagement rate (ER): this is a metric used on TikTok to measure the number of people who are interacting with your content. This includes commenting, liking, sharing and adding to favourites.
The Importance of Benchmarks
Benchmarks are crucial to tracking the performance of your TikTok advertising campaigns. Some of the reasons marketers set benchmarks for their TikTok ads include:
- Goal setting: by establishing benchmarks, you’ll have a standard point of reference which you can use to measure the performance of your campaigns. This will help you to set specific, realistic and achievable goals for future marketing efforts.
- Performance measurement: benchmarks give you a clear way of measuring the success of your campaigns. They allow you to compare your current performance not just against your previous results, but also against industry and competitor standards, giving you valuable insight into how well your campaigns are performing.
- Identifying areas for improvement: by stacking up your results against benchmarks, you’ll be able to see clearly where you have room to improve.
- Better decision making: By showing you the return you’re getting for your time investment, they’ll help you to make better decisions moving forward.
- Fresh motivation and accountability: Benchmarks are a brilliant way of motivating marketing teams, as well as holding team members accountable for the results of their campaigns.
If you’re advertising or pushing organic content on TikTok, benchmarks are going to help you boost performance and gain an advantage over your competitors.
TikTok CTR Benchmarks in 2023
CTR gives you an understanding of how relevant your ad is to your audience, as well as how engaging it is, by showing the percentage of viewers who click through to the next stage in your funnel.
TikTok doesn’t release data on platform-wide CTRs, but based on an average of sources across the internet, you should aim for a CTR of 1.5% on your In-Feed Ads.
Once you’ve hit that, set your sights for campaigns that drive over 2% and you’ll see your cost-per-acquisition decrease significantly.
Note: If you’ve got the budget to spend on Takeover or Top-View Ads, which are more expensive than In-Feed Ads, you should shoot for a higher CTR of 14% and 8.5% respectively.
Conversion Rate Benchmarks in 2023
Conversion rate is arguably one of the most important benchmarks for TikTok Ads, and it’s the one many marketers will look to as a means of judging their campaign success.
There are endless factors which can influence the conversion rate of a TikTok campaign which can make standard benchmark figures a little misleading. However, you should aim for a conversion rate of around 3.5%.
US lifestyle brand Nolan Bros managed to hit this number with their In-Feed Ads campaign, which was focused on driving high-quality traffic to their site to maximise conversions. By using cold advertising to gather data for retargeting, Nolan Bros managed to achieve a 3.4% CVR overall, with an impressive $0.21 CPC.
Source: TikTok
CPM Benchmarks in 2023
Much like CTR and CR, there’s an endless amount of factors that can influence your CPM on TikTok. These include:
- Audience: the demographics of your audience, including age and interest
- Geolocation: the location of your audience, because CPMs generally scale in line with audience purchasing power.
- Ad quality: the higher the quality of your ad, the lower your CPC and CPM.
- Time of year: CPM varies depending on the time of year, with the highest costs coming in around the holiday season.
- Ad placement: Different ad placements on TikTok can impact your CPM.
- Campaign goal: TikTok values the reach of certain campaign goals higher than others. If you’re aiming to drive traffic, your CPM will be lower than if you’re focusing purely on conversions.
From trawling data across the web, we’ve seen CPMs as low as $2 for beauty and lifestyle, and as high as $20,000 for industries like legal.
It’s important to bear in mind that a higher CPM isn’t always a bad thing, as it can be a sign that you’re reaching a more relevant audience. Your ultimate goal with TikTok ads should be your conversion rate and ROAS, so try to focus your attention on those benchmarks over CPM.
ROAS Benchmarks in 2023
ROAS is a more detailed stat than conversion rate, because it takes into account the value of the sales your ads have generated.
Key factors that can influence your ROAS on TikTok include:
- Ad quality: your creative will be one of the biggest influencers on your ROAS.
- Target audience: the more dialled in your targeting, the higher ROAS you’ll see.
- Perceived value: if you can clearly demonstrate the value your audience will get from your product or service, you’re likely to achieve a higher ROAS.
- Pricing strategy: Test your pricing to find the sweet spot between conversions and profit margin.
- Customer Lifetime Value (CLTV): Focus your funnel on more than just acquisition. If you can drive a second sale via email automation, your ROAS will dramatically improve.
- Landing page quality: well-designed landing pages that match the context and form of the ads they’re linked to produce higher ROAS.
We’ve mentioned that a decent conversion rate on TikTok is 3.5%, but you should aim for a ROAS of 3 or above to make sure you’re left with enough margin after costs to make TikTok ads a profitable and scalable channel.
CPC Benchmarks in 2023
The minimum CPC available on TikTok is as low as $0.02, but unless you’re giving away free money, you’ll need to set your sights a little higher than this.
In 2023, the average CPC on TikTok sits at around £0.39-£0.80.
That means, with a monthly ad spend of £3,000, you should expect to drive between 3,750-7,700 visitors to your website each month.
If you can hit a 3.5% conversion rate as we mentioned above, that should generate anywhere from 135-270 sales. At an Average Order Value of £40, this would drive around £5,0000-£10,000 in revenue.
Engagement Rate Benchmarks in 2023
TikTok is the new kid on the block and the go-to for many marketers because of its extreme engagement potential, where users are dialled in and ready to engage with the video content you put in front of them.
Find the right content type or jump on the right trend, and your content can quickly go viral.
Depending on your following, you should expect to see between 3% and 9% engagement rate on TikTok. If you’re performing under 3%, it’s worth taking steps to improve your content.
How to Improve TikTok Ad Performance
While TikTok holds incredible potential for brands, simply being on the platform doesn’t guarantee success. So, if after launching your campaigns you don’t manage to hit the benchmarks we’ve shared above, take the following steps to improve your performance:
- Dial in your audience
If your audience targeting isn’t on-point, you’re spending budget to get your ads seen by people who aren’t relevant to your offering.
So, if your ads are underperforming, the first step you need to take is to dial in your audience. This comes twofold – persona building, then targeting.
First off, you need to map out who your ideal customer is, and what they look like in demographic form.
How old are they, what are their motivators, what problems do they face – all of this is powerful ammunition for your advertising strategy.
Next, it’s time to adapt that demographic to audience targeting. For example, if you’re trying to target gym lovers, testing an age group from 18-35 with fitness-related interests will be a good starting point.
- Polish your creative
TikTok is first and foremost an entertainment platform, and your ad creatives need to follow that theme, too.
Jump on popular TikTok trends, use trending audio in your ads, or harness the power of storytelling and humour to grab your audience’s attention. Keep your ads short and snappy, with fast transitions every few seconds to keep your audience watching.
- A/B test continuously
As with any advertising platform, you can’t take a set-and-forget approach to your TikTok campaigns. If you want them to work, you’ll need to continuously test and optimise to improve performance.
Try out fresh creatives, split-test your landing pages, and trial different TikTok ad formats to see what moves the needle in the right direction. Repeat this process regularly to move your campaign performance in the right direction.
- Partner with influencers
TikTok has a built-in creator marketplace which makes finding relevant influencers a breeze. By partnering with creators on TikTok, you can get engaging, authentic content for your ads that shows real people experiencing your products. This User Generated Content is a powerful tool for selling and holds significant conversion potential.
If you want to motivate creators to promote your products, TikTok also has a native affiliate platform. This allows you to offer creators a commission on each sale they drive, with an interface that tracks the entire process – from sample requests all the way through to content creation and conversions.
