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Let’s begin answering this question by covering some of the basic TikTok facts and figures. It will help you understand the costs and profitability of TikTok ads. If you’re wondering why you should advertise on TikTok, here are a few great reasons!
TIKTOK STATS
TikTok has 1 billion monthly active users (more than Reddit, LinkedIn, and Snapchat), and it’s the sixth largest social network in the world. This gives you an incredible opportunity to increase brand exposure, grow website traffic, and generate new leads.
TikTok app has a highly engaged audience, with 90% of its users being on it multiple times per day. Over one-third of unique visitors to TikTok come from households with a total income of $100K or more.
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ARE TIKTOK ADS THE RIGHT CHOICE FOR YOU?
TikTok is an app whose audience mainly consists of young generations. According to data, the users aged 10-29 make up 62% of the total users. Only 16.4% of TikTok users are between 30 and 39 years old, and just 7.1% are over 50. But if your business targets an older demographic, don't let this information discourage you.
With increasing popularity, more people are joining TikTok each passing day. With time, older demographics are likely to start using the app. Similar to other social media platforms, on TikTok, you have an option to choose to target the older demographic directly.
Factors That Influence The Cost Of TikTok Ads
Here are the main factors:
- An objective (conversions, impressions, app installs, etc.)
- Bidding method and amount
- Audiences (based on age, gender, location, mobile device, interests, language, etc.)
- Your industry
- Ad formats (there are five types of ad formats: In-Feed ads, Branded Takeover, TopView, Branded Hashtag challenge, and Branded effects)
When you’re ready to start with TikTok ads, keep in mind all mentioned above, and prepare the budget for your advertising strategy. On a campaign level, you’ll need at least $50 as a daily budget, so as a monthly minimum, you will need to invest $1.500 (if you have only one campaign).
Our usual recommendation is to start with at least $3.000 - $4.000. You will need to create more ad groups after the learning phase, retarget audiences, and create at least lookalike ones.
TIKTOK ADS FORMATS
In-Feed Ads
If you want to increase engagement with your followers, then an In-Feed ad is a suitable format. It allows your followers to like, comment, share and interact with your video. Your ad will appear as the user scrolls through the For You section on TikTok’s homepage.
This segment makes them similar to ads you can see on your Instagram homepage. Videos can be 9 to 15 seconds long. You should also add a call to action to increase your conversions. The call to action can link to your website, online shop, or landing page. If you want, you can even include multiple calls to action.
Branded Takeover
This ad format is more direct than In-Feed ads. Branded Takeover ads appear immediately as a user opens the app, so it's the first thing a user sees upon opening the app. The ad appears as a full-screen video on the user's device. One more feature of this ad format is that your ads can also appear as videos, GIFs, or still images on the For You page.
It's important to note that users see only one Brand Takeover ad a day, and this factor makes the cost of Brand Takeover ads high.
TopView
TopView videos can be as long as 60 seconds, making them the longest ad format on TikTok. They work similarly to Branded Takeover. The difference is that with TopView, your ad will be shown to a user 5 seconds upon opening the app. The ad appears on full screen with sound and autoplay, and it allows you to add links to internal or external pages.
Branded Hashtag Challenge
These are sponsored hashtags featured on the TikTok Discovery page. Upon clicking on the sponsored hashtag, the user will be redirected to the landing page. The landing page will contain the brand’s logo, website link, challenge description, and the most popular videos using the hashtag. You can run Branded Hashtag challenges using TikTok’s advertising program, or you can partner with influencers to promote your branded hashtag.
Branded Effects
You can use Branded Effects to customize your ads with the help of AR filters, stickers, lenses, and branded shareable stickers. It's even possible to create your own filter directly on the app. This ad will help you grab the user’s attention by adding uniqueness and personality to your video and making them take action upon seeing it.
THE BEST WAYS TO LOWER THE COST OF TIKTOK ADS
You should focus on conducting competitive analysis to get ahead and develop an effective creative strategy. You need to do extensive creative testing, and more importantly, collaborate with a knowledgeable marketing partner.
Tips for TikTok ads:
- Display the message upfront
- Add an emotional element
- Gain a better watch-through-rate with vertical videos
FINAL THOUGHTS
There is no proof that TikTok ads are more expensive than Facebook ads, and it’s more often heard from advertisers that TikTok advertising is cheaper. Moreover, with the video format only and ads covering 100% of the screen, being 100% visible to users (unlike on Facebook), TikTok brings a new and unique form of advertising.
Data shows that a significant percentage of the TikTok audience doesn’t use YouTube or Facebook, so it's possible to reach out to them only on TikTok. Any video can go viral at any moment, grab attention, increase brand awareness, and significantly contribute to conversions.
If you would like to learn more about the ways to advertise your business on TikTok, follow the link and book our free consultation today!
About the author
Tamara Žeravljev is a Senior PPC Specialist at Pendulum Ads. She has been in the PPC business for over three years and has experience in Amazon, TikTok, and Google Ads. She has worked with various clients, from small companies to 8-figure sellers. Tamara is TikTok and Amazon Advertising certified. Learning and sharing her knowledge with other colleagues is her favorite part of the job.