It’s fair to say that TikTok has taken the world of social media by storm.
Since launching in 2017, the platform has grown at lightning speed and achieved some seriously impressive numbers.
The app now boasts 1bn monthly active users and was the most downloaded app in both 2020 and 2021. 167 million hours of video are watched on TikTok every minute.
If you would like to hire a TikTok ads agency to run your campaigns, please book a free consultation.
But TikTok isn’t just good for discovering the latest dance crazes.
It also provides advertisers with exciting opportunities to reach, engage, and convert valuable audiences. The platform offers colossal reach, creative ad formats, and smart targeting options – a powerful combination for digital marketers.
But how much does TikTok advertising cost? And how can you manage your budget to maximise the efficiency of your campaigns?
Let’s take an in-depth look at the costs associated with TikTok ads, and explain how you can squeeze optimal results from your investment.
What are the Options with TikTok Ads?
TikTok ads appear in several different formats within the app and can help advertisers to achieve a range of objectives.
More standard video ads (e.g. in-feed video ads and Top View ads) are often used by marketers to generate enormous reach and drive high levels of engagement.
However, bespoke creative formats (e.g. Branded Hashtag Challenges and Branded Effects) are also available to advertisers. These ads come at a cost but have the potential to deliver massive amounts of engagement, huge organic reach, and even viral fame.
To run cost-efficient TikTok advertising, you’ll need to combine the right ad formats with accurate audience targeting and eye-catching creative assets.
Creativity is hugely important on TikTok. User feeds are constantly packed with fresh content, so you’ll need to produce creative assets that grab attention and stand out.
Let’s run through the different types of TikTok ads, and outline how they can contribute to your objectives.
In Feed ads
In-Feed Video ads are served in the TikTok home feed, also known as the ‘For You’ page.
In-Feed ads can technically run for a maximum of 60 seconds, but it’s recommended that your TikTok videos only last for around 15 seconds to maintain attention and drive engagement.
Viewers can engage with your In-Feed ads through likes, comments, and shares. You can also include a Call To Action at the bottom of In-Feed ads (e.g. ‘Shop Now’) to help drive specific actions and website traffic.
In-Feed ads are perfect for delivering short and snappy product videos or brand messages.
It’s also very important to acknowledge the placement of In-Feed ads. Since this format sits within the ‘For You’ page alongside standard user content, you’ll need to produce creative assets that feel authentic and native.
If your videos instantly feel like overly-polished sponsored content, TikTok users may be less willing to engage with your ads.
TopView ads are designed to grab the attention of your target audience quickly and effectively.
This format appears immediately when a user opens the TikTok app, occupying the top position of the ‘For You’ page.
These video ads can run for up to 60 seconds, but it’s still very important to capture interest within a couple of seconds.
TopView ads provide you with premium real estate on TikTok, because they’re the first post your audience sees in-feed. Your videos will also auto-play in full-screen mode with audio enabled, so this is a brilliant opportunity to make a statement.
You can also include a specific CTA within your TopView ads, so you can use this eye-catching placement to drive high volumes of clicks and conversions.
Brand Takeover ads
If you’re looking to make an impact with your TikTok advertising, Brand Takeover ads are the format for you. This eye-catching ad appears as soon as a user opens the app, dominating the entire screen and providing advertisers with a fantastic opportunity to drive engagement.
The placement includes a short 3-5 second video (or static image) that users can click to visit an external landing page or Hashtag Challenge page.
Audiences will only see a maximum of one Brand Takeover ad per day, and because the placement is so exclusive, there are some hefty costs associated with running it.
(Brands can pay up to £40,000 a day to run Brand Takeovers, so you’ll need to have access to a fairly sizable marketing budget.)
This format is often used by larger brands or corporations to promote special events and Hashtag Challenges. Although Brand Takeovers are one of the more expensive TikTok ad formats, they do provide advertisers with incredible visibility.
Branded Hashtag Challenges
Branded Hashtag Challenges appear at the top of the TikTok ‘Discover’ page. They’re built to generate huge amounts of user engagement, and the right creative concepts can also achieve viral fame.
When a user clicks on a Hashtag Challenge ad, they’re taken to a separate landing page that includes a description of the challenge, rules and guidelines, and a link to the advertiser’s website.
If a user wants to participate in the challenge, they can then create and post their own content submission, using the brand’s hashtag to promote their video.
If you’re looking to drive mass engagement (or gather some valuable User Generated Content from your audience) then Hashtag Challenges can be a very powerful tool.
However, this can be an expensive format to run, so you need to make sure that you have a creative and engaging idea that will genuinely appeal to your audience and encourage participation.
Branded Effects are essentially TikTok filters that audiences can engage with and share organically.
This format can deliver exceptional results for advertisers. Branded Effects are highly visual, which is great for driving engagement, but they can also help to generate UGC at scale.
If your Branded Effect gains popularity among users, it will be shared more and more, rapidly gathering momentum and increasing your campaign reach.
Branded Effects can be promoted as paid ads, but the real power comes from organic sharing. You need to create a filter that’s relevant, entertaining, and engaging for your audiences.
This format can also be paired with Hashtag Challenges to encourage wider user participation and drive further organic reach. If you’re hoping that audiences will interact with your brand directly (rather than just viewing TikTok ads passively) then this is the perfect format.
Influencer marketing is incredibly popular on TikTok because content creators provide brands with the opportunity to influence purchase decisions and build credibility.
Rather than appealing to potential customers directly, you can use TikTok influencers that your target audience already trusts and follows.
This helps to make your TikTok ads campaign messaging feel infinitely more authentic and persuasive.
Influencers can deliver all kinds of TikTok content for advertisers, from product testimonials to ‘how to’ videos and brand challenges.
The key is to select the right TikTok influencers for the job. Depending on your budget, you may need to reach out to micro-influencers rather than global celebrities. You also need to identify trusted creators who can communicate with your target audience effectively.
Are TikTok ads worth the investment?
TikTok is still a relatively ‘new’ platform in the world of social media but has already established itself as a highly effective marketing tool for advertisers.
Businesses of all sizes (from established global brands to ambitious start-ups) have achieved tremendous success on the app, using a variety of different formats and strategies.
For brands with a smaller marketing budget, standard ad formats (e.g. In-Feed ads) can still deliver outstanding results and excellent reach.
Plus, advertisers can experiment with video ads and slowly increase investment as they collect performance data. If you begin to see a strong ROAS from TikTok ads, you can ramp up spend and even branch out with additional formats.
The TikTok advertising platform is still growing, and social media marketing opportunities are constantly emerging. If you can afford to test out TikTok ads for your brand, there’s a very good chance that you’ll deliver positive returns.
How do TikTok ads work?
If you’re thinking about launching new TikTok ad campaigns, it’s important to understand how ads on the platform work.
Thankfully, it’s fairly simple to wrap your head around.
TikTok video ad impressions are served in the ‘For You’ page, which is essentially the home feed. Different formats will also appear in different ways – In-Feed ads are delivered among standard user posts, while TopView and Brand Takeover ads sit at the top of the page.
Video ads can last between 5-60 seconds, and will also display your brand name and accompanying ad text.
There are also some other TikTok ad variations to consider.
Spark ads are essentially native ads that you can use to promote organic TikTok posts to a wider audience. These could be popular posts on your business profile or a post that a user has uploaded mentioning your brand.
Collection ads allow users to explore a ‘Gallery Page’ after tapping on your ad. This gallery will showcase multiple products (which you can cherry-pick or serve dynamically) that users can click to purchase from your website. This is a dream for e-commerce brands.
How much do TikTok ads cost?
TikTok advertising costs will fluctuate regularly due to a number of different factors.
External factors (e.g. seasonality, competitor activity, industry) will influence your campaign costs, but your campaign setup (e.g. ad formats, lifetime budget, bidding strategy) will also impact the final price you pay.
However, let’s take a look at some average TikTok ad costs to provide a rough guideline for future campaigns.
The average CPM (Cost Per Mille/Cost Per Thousand Impressions) for TikTok video ads is £8.26. Advertisers are also required to spend a minimum of approximately £400 on a campaign, so you’ll need to bear this in mind when you’re preparing to launch TikTok ads.
It’s also important to note that certain TikTok ad formats involve a flat fee, rather than being bought on a CPM basis.
Hashtag Challenges, for example, will cost around £120,000 to run for 6 days – there will also be additional costs for paid promotion. Brand Takeovers can cost upwards of £40,000 for 24 hours, but this package will include a set number of guaranteed impressions.
Just remember – TikTok CPMs can always fluctuate, so your total costs are never set in stone. It’s vital to monitor your own campaign spend closely so that you can manage your daily budget effectively!
What factors can influence TikTok ad costs?
Many different factors can impact how much TikTok ads cost.
However, that doesn’t mean you’re powerless to manage your ad budget.
If you’re aware of the factors that can influence TikTok costs, and keep a close eye on your campaign reports, then you’ll be in a much better position to control your spend and maximise your returns.
Below are some examples of the factors that will dictate the amount you pay for TikTok ads.
If other brands are actively competing for the same target audiences as you, then you’ll see campaign costs increase. That’s because more advertisers are bidding for the same inventory, which means you’ll need to pay more to successfully deliver impressions.
Sometimes this is unavoidable, but if an audience segment is becoming too expensive and inefficient, you may want to consider diversifying your targeting.
Your choice of TikTok ad formats will also have a direct impact on the amount you pay for a campaign.
If you’re running TikTok video ads, then you’ll need to keep an eye on your CPM to understand how much it’s costing to reach certain audiences. CPMs can fluctuate regularly, so be sure to stay in the loop with your reports.
If you’re running high-impact formats (e.g. Hashtag Challenges, Brand Takeovers) then you’ll pay a fixed cost for a campaign in exchange for a set number of guaranteed impressions.
Certain times of the year will always be more expensive for TikTok advertisers.
Holiday periods (e.g. Christmas) and popular retail events (e.g. Black Friday, January Sales) will be packed with big-budget advertisers looking to reach huge audiences with aggressive sales messages.
Although it’s certainly possible to deliver some jaw-dropping results during these periods, the TikTok marketing landscape will also be incredibly competitive – so prepare accordingly.
How do I optimise my TikTok ads for ROI?
Whatever your objective for TikTok advertising (conversions, web traffic, app installs, etc) you’ll always want to deliver a positive return on investment.
So how can you ensure that your ad budget is working as hard as possible for your business?
Firstly, you’ll need to pay close attention to your campaign reports. Monitor performance, identify the best-performing tactics, and adjust your budget accordingly.
You can also calculate your Return On Ad Spend on a regular basis to make sure that performance is heading in the right direction.
Here’s the ROAS calculation – don’t worry, there’s no complex arithmetic involved!
ROAS = Advertising revenue ÷ Advertising cost
ROAS isn’t a flawless calculation, but it does provide you with a very good indication of how efficient your TikTok ads are.
If you’re seeing a superior ROAS (a 4:1 ROAS is considered outstanding) after making campaign optimisations, then you can proceed with confidence.
Alternatively, you can hire a TikTok ads agency to help with your campaigns.
How can I manage my TikTok budget effectively?
If you’re investing your hard-earned cash into TikTok advertising, then it’s very important that you manage your budget effectively.
The ultimate goal is to maximise the results you’re generating with your TikTok budget while reducing wasted spend and inefficient tactics.
Managing your budget properly isn’t rocket science, but it does take commitment.
The first step is to access campaign reports through the TikTok Ads Manager. In these reports, you’ll be able to see which formats and audience segments are delivering the most efficient returns at the ad group level.
Focus on the campaign metrics that are contributing toward your key business objectives.
From here, you can shift budgets between ad groups to support high-performing tactics. Performance will always change over time, so make sure that you’re staying close to these reports and making regular adjustments to your budget.
How can I reduce TikTok advertising costs?
They say there’s no such thing as a free lunch – and unfortunately, there’s no such thing as a free TikTok ad campaign either.
However, that doesn’t mean you can’t reduce the amount that TikTok ads cost.
If you follow these best practices, you’ll give yourself the best chance of lowering your campaign costs and improving the efficiency of your budget.
Be diligent with optimisations
Want to reduce the amount you’re spending on TikTok ads?
Focus on your most cost-efficient audiences and formats, and pause any tactics that are wasting budget.
This is easier said than done, but all it takes is a commitment to making regular optimisations. Try to check your campaign reports on a weekly (or even daily) basis, and track your key metrics to understand where you need to shift budget.
Test, learn, and keep testing
Testing and learning is one of the best ways to improve your returns and bring down your overall TikTok ads cost.
There are plenty of different variables that you can tweak throughout a campaign – your ad copy, creative assets, target audiences, and ad formats can all be varied and tested.
If you can launch new tests on a regular basis, and monitor the results carefully, you’ll be able to refine your TikTok strategy in no time.
Not every test will be successful, but once you find new tactics that can drive superior conversions at a lower cost, you can instantly improve the efficiency of your campaign and reduce wasted spend.
Pick the right formats for the job
Different TikTok formats can help your brand to achieve a wide range of objectives.
However, not every ad format will be suitable for every campaign. You’ll need to think carefully about your objectives, your creative assets, and your ad messaging.
For example, if you have a quick and punchy product message to deliver, In-Feed video ads can help you to communicate this at scale. But if you’re looking to ramp up e-commerce conversions, a Collections ad can help you to generate high volumes of sales.
There’s nothing wrong with experimenting with different TikTok ad formats, but if you want to reduce wasted spend and achieve better results with your budget, you’ll need to hone in on the best-performing ad placements.
TikTok advertising can deliver truly exceptional results for digital marketers.
However, if you want to ensure that your TikTok investment is delivering optimal returns, then you’ll need to manage your budget carefully.
That means understanding how much a campaign might cost, acknowledging the factors that can influence TikTok prices, and diligently optimising your ads.
If you can tick all of these boxes, then you’ll be in a good position to drive conversions and increase revenue through TikTok ads.