TikTok Advertising: What You Need to Know

TikTok has taken the world by storm, transforming from a niche platform for lip-syncing videos to a global social media powerhouse. With over 1.5 billion active users, it’s no wonder businesses are flocking to TikTok to capture the attention of its highly engaged audience. But what makes TikTok so appealing for advertisers, and how can your business leverage this platform effectively?

While creating organic content is a great way to start building a presence and an audience on TikTok, advertising on TikTok is a sure-fire way to truly boost your brand’s impact. But it’s important to know that running ads on TikTok is not like running ads on Instagram or Facebook - it’s a whole new ball game.

Let’s take a look at what TikTok is, how it works and how B2B and B2C businesses can incorporate it into their marketing mix.

What is TikTok?

TikTok is a social media platform where users create, share, and discover short-form videos. Launched in 2016 by the Chinese company ByteDance, TikTok has quickly grown to become one of the most popular apps globally, with over 1.5 billion active users. The app's unique algorithm curates a personalised feed called the "For You Page" (FYP), which showcases content based on user preferences and interactions.

The latest statistics show that TikTok is one of the most popular social media platforms to date:

- TikTok has been downloaded over 2.7 billion times and was the most downloaded app in 2021 - beating competitor platforms like Instagram and Facebook

- Roughly half of the American population uses TikTok

- A user opens the app up to 8 times each day

- Nearly half of Gen Z use TikTok and Instagram for search purposes, instead of traditional search engines

Key Demographics and User Base

TikTok's user base is predominantly young, with a significant portion of its audience being Gen Z and Millennials. According to recent statistics, approximately 60% of TikTok users are under the age of 30. This demographic is highly engaged and spends an average of 52 minutes per day on the app, making it a goldmine for advertisers targeting younger consumers.

Related: How is Gen-Z Influencing the Future of Retail?

Why TikTok is Attractive for Advertisers

TikTok's appeal lies in its highly engaging and visually driven content. The platform encourages creativity and authenticity, allowing brands to connect with their audience on a more personal level. TikTok's unique algorithm ensures that even new accounts have the potential to go viral, providing a level playing field for brands to gain visibility. Furthermore, the app's interactive features, such as duets, challenges, and live streams, offer multiple avenues for brands to engage with users in fun and innovative ways.

How Do Ads Work on TikTok?

Advertising on TikTok involves more than just creating a catchy video. The platform offers a range of ad types designed to suit different marketing objectives, from brand awareness to direct response. Here's a closer look at the different kinds of ads you can run on TikTok and how they work:

Types of TikTok Ads

In-Feed Video Ads

These ads appear in users’ native news feeds as they scroll through the For You Page (FYP). In-feed video ads can be up to 60 seconds long, but TikTok recommends keeping them between 9 and 15 seconds for maximum impact. They include a clickable call-to-action (CTA) button, such as “Shop Now” or “Learn More,” directing users to a landing page or app download.

Spark Ads

Spark ads allow brands to boost their existing organic content or user-generated content that mentions their products. This ad type helps maintain the organic feel of TikTok while amplifying reach and engagement.

TopView Ads

TopView ads are the first thing users see when they open TikTok, providing a full-screen, sound-on experience. These ads are perfect for capturing immediate attention and are ideal for major product launches or brand awareness campaigns.

Image Ads

Image ads appear in TikTok’s news feed apps and include a brand or app name and text. While less dynamic than video ads, they can still be effective for delivering straightforward messages.

Video Ads

These full-screen videos appear on the FYP and can be 5 to 60 seconds long. They support various CTAs and are excellent for storytelling and showcasing products.

Pangle Ads

Pangle integrates with TikTok to offer video, native, and banner ads, but this feature is only available in specific countries. It helps brands reach a broader audience through TikTok’s partner apps.

Source: DashClicks

Carousel Ads

These ads include up to 10 images that appear in TikTok’s news feed apps. Carousel ads are great for showcasing multiple products or features within a single ad unit.

Video Shopping Ads

These ads feature product tiles that users can click on to view a shoppable instant gallery page without leaving TikTok. They are designed to streamline the shopping experience and drive direct sales.

Branded Effects

Brands can create custom stickers, filters, and other AR content for users to include in their videos. Branded effects can significantly boost engagement and brand visibility.

Hashtag Challenges

Hashtag challenges encourage user participation by inviting users to create content around a specific theme or challenge. These challenges often go viral, generating massive organic reach and engagement.

Sponsored Influencer Content

Collaborating with influential TikTok users to create sponsored content can help brands tap into established audiences and build trust. Influencers can create authentic, relatable content that resonates with their followers.

Playable Ads

Designed primarily for gaming companies, playable ads allow users to try out a game before downloading it. This interactive ad format is currently available only in select countries.

Setting Up and Running TikTok Ads

Setting up a TikTok ad campaign involves several steps:

Define Your Objectives: Whether you aim to boost brand awareness, drive traffic, or increase sales, clearly defining your objectives will guide your ad strategy.

Target Your Audience: TikTok’s robust targeting options let you reach users based on demographics, interests, behaviours, and more.

Create Engaging Content: TikTok’s creative tools and best practices can help you design compelling ads that resonate with your audience.

Measure and Optimise: Use TikTok’s analytics to track the performance of your ads and optimise your campaigns for better results.

With a variety of ad types and targeting options, TikTok offers a versatile platform for both B2C and B2B businesses to reach and engage their target audiences.

What Does it Cost to Advertise on TikTok?

Advertising on TikTok can be as affordable or as pricey as you want it to be, thanks to the platform’s auction and bidding model. This flexible system means you have control over how much you pay per video view, click, or impression, allowing you to tailor your budget according to your marketing goals and resources. However, there are minimum spend requirements to keep in mind.

Minimum Spend Requirements

Campaign-Level Budget: The minimum budget for a campaign is $50 USD per day. This means that for each day your campaign is running, you will need to spend at least $50.

Ad Group-Level Budget: The minimum budget for an ad group is $20 USD per day. So, for every day that your ad group is active, you will be spending at least $20.

TikTok states that your bid, among other factors, represents how competitive you want to be in the auction to achieve your desired outcome. The higher your bid, the more likely you are to win the auction and get your ad shown to your target audience.

TikTok Bidding Methods

TikTok offers four main bidding methods, each suited for different advertising goals:

CPV (Cost Per View):

Definition: CPV is the cost per thousand views. A view is counted when a user watches your video for more than six seconds or interacts with your video within the first six seconds.

Best For: Increasing video views and engagement.

CPM (Cost Per Thousand Impressions):

Definition: CPM is the cost per thousand impressions, where the platform aims to get as many impressions as possible.

Best For: Maximising reach and brand awareness.

oCPM (Optimised Cost Per Thousand Impressions):

Definition: oCPM focuses on showing your ads to users who are more likely to complete a conversion event, such as becoming a lead or installing an app.

Best For: Driving conversions, app instals, and sales.

CPC (Cost Per Click):

Definition: CPC is the cost per click, meaning you pay for each click your ad receives.

Best For: Direct response campaigns like product sales, app instals, and website visits.

TikTok Bidding Strategies

There are two primary bidding strategies on TikTok, each with its own advantages:

Lowest Cost:

How It Works: You set a total campaign budget without specifying a bid per action. TikTok then automatically maximises the number of conversions within your budget.

Best For: Maximising conversions efficiently without worrying about individual bid amounts.

Cost Cap or Bid Cap:

How It Works: You set a specific bid price for your optimisation goal. This method helps control the cost per acquisition (CPA).

Considerations: While this method can help manage CPA, it may also lead to budget underutilisation if competitors bid higher and win more inventory.

By understanding these costs and strategies, businesses can effectively plan their TikTok ad campaigns to fit their budget while achieving their marketing objectives. Whether you are aiming for brand awareness, engagement, or conversions, TikTok's flexible ad pricing can help you reach your goals without breaking the bank.

Keep Reading: The Power of Social Persuasion through Social Media

How Effective is TikTok Advertising for Businesses?

When considering TikTok as a part of your marketing strategy, it's essential to understand how it caters to different types of businesses. Both B2C (business-to-consumer) and B2B (business-to-business) companies can benefit from advertising on TikTok, but the approach and expected outcomes can vary significantly.

TikTok for B2C Businesses

B2C businesses often find TikTok to be an incredibly effective platform for reaching and engaging with consumers. Here’s why:

High Engagement Rates

TikTok users are known for their high levels of engagement. They spend considerable time on the app, interacting with content, participating in challenges, and sharing videos. This environment is ripe for B2C brands to build awareness, create viral content, and drive direct consumer action.

Visual and Interactive Content

The platform’s focus on short, engaging videos allows B2C brands to showcase their products in creative ways. Features like in-feed video ads, TopView ads, and video shopping ads make it easy to highlight product features and benefits, leading to increased interest and conversions.

Influencer Collaborations

Partnering with popular TikTok influencers can amplify a B2C brand’s reach and credibility. Influencers help create authentic, relatable content that resonates well with their followers, driving more organic engagement and sales.

Targeted Advertising

TikTok’s advanced targeting options enable B2C brands to reach specific demographics and interest groups effectively. This precise targeting helps ensure that marketing efforts are directed at the most relevant audience, maximising ROI.

Related: Top Social Media Platforms for Ecommerce Businesses

TikTok for B2B Businesses

While TikTok is primarily known for its consumer-centric content, B2B businesses can also leverage the platform to achieve their marketing goals. Here’s how:

Building Brand Awareness

For B2B companies, TikTok can be a powerful tool to increase brand visibility and awareness among a broader audience. Creative and educational content can help establish a B2B brand as an industry leader and thought leader.

Educational Content

B2B brands can use TikTok to share industry insights, tips, and how-to videos that demonstrate their expertise. This type of content helps build trust and authority, making potential clients more likely to consider their products or services.

Showcasing Company Culture

TikTok is an excellent platform for B2B brands to showcase their company culture and values. By sharing behind-the-scenes videos, employee stories, and company events, B2B companies can humanise their brand and attract like-minded clients and partners.

Networking and Collaboration

Engaging with other businesses and professionals on TikTok can open doors to collaborations and partnerships. Participating in industry-specific challenges or trends can help B2B brands connect with potential clients and partners in a more informal and engaging manner.

Effectiveness: It Depends on Your Market and Goals

It’s a frustrating answer, but the truth is that the effectiveness of advertising on TikTok is dependent on several factors. It depends on things like your service or product and its suitability for the ad formats the platform offers; it depends on your target audience and who, ultimately, you want to reach.

Like any marketing channel, you have to be sure that your marketing objectives or goals can be met by the platform.

Target Audience: Understanding whether your target audience is active on TikTok is crucial. If they are, TikTok can be a valuable platform for reaching them.

Content Strategy: Creating content that resonates with TikTok users requires creativity and an understanding of the platform’s unique culture. A well-thought-out content strategy can make a significant difference.

Marketing Goals: Define what you hope to achieve with TikTok advertising. Whether it’s brand awareness, lead generation, or direct sales, your goals will dictate your approach.

While TikTok offers exciting opportunities for both B2C and B2B businesses, the key to success lies in understanding your audience, setting clear objectives, and creating engaging content that aligns with the platform’s dynamic and interactive nature.

Is TikTok Right for Your Business? Find Out!

TikTok has rapidly become a powerful platform for businesses looking to engage with a highly active and diverse audience. Whether you're a B2C or B2B company, TikTok offers unique opportunities to capture attention and drive engagement through creative and interactive ads.

By understanding the various ad formats, leveraging the platform's algorithm, and considering the costs involved, you can effectively incorporate TikTok into your marketing strategy. However, the key to success on TikTok lies in understanding your target audience and creating content that resonates with them.

At Blackpepper, we specialise in helping businesses navigate the evolving landscape of social media advertising. Let us help you craft a TikTok strategy that not only reaches your audience but also drives meaningful results!