TikTok, with over 1 billion active users, has become a major social media platform and a hub for emerging trends. By 2021, consumers had spent over $2.3 billion on TikTok purchases. This presents businesses and brands with an opportunity to advertise their products and services to a broad and diverse audience on the platform.
Understanding the value of an effective TikTok advertising campaign can be challenging. But don’t worry, we’re here to simplify the process. In this guide, we’ll break down how to effectively use TikTok advertisements to your advantage, ensuring you can maximize your reach and engagement on the platform. We’ll cover everything you need to know to create a successful TikTok ad campaign that aligns with your marketing goals and captures the attention of your target audience.
How Much Do Tiktok Ads Cost?
The minimum investment cost for a TikTok ads campaign is $500. However, you should know that TikTok ads don’t have a one-size-fits-all price tag. The cost can vary depending on several factors.
TikTok Ads use a bidding system. Through this system, you set the maximum amount you’re willing to pay for a specific action (impression, click, etc.). Below is the average breakdown of TikTok ads price:
- Average TikTok engagement rate – 5-16%
- Average TikTok Ads Cost per Mille (CPM) – $10 per 1,000 views
- Average TikTok Ads Cost per Click (CPC)– $1 per click on your ad
- Fee to create TikTok video on Canva – free
- TikTok influencer post pricing ranges from $5 to $2,000
TikTok Pricing Breakdown
TikTok has a robust array of ad bids for businesses and brands to choose from. So, the cost of advertising on TikTok will vary based on the ad bid you opt for.
For in-feed ads, TikTok offers four different bidding models for users to choose from based on their TikTok ads budget.
1. Cost Per View (CPV)
CPV refers to the average amount you pay each time someone views your ad for a specific duration. For example, you might be charged if someone watches at least 25% of your video ad. You can use CPV bidding if you plan to increase video views.
2. Cost Per Thousand Impressions (CPM)
CPM, which stands for “cost per mille” (Latin for “thousand”), is a common metric on TikTok. It represents the average cost you pay for every thousand impressions your ads receive. An impression is counted each time your ad appears on a user’s feed, regardless of whether they click on it or interact with it.
3. Optimized Cost Per Thousand Mille (oCPM)
This is an advanced bidding strategy whereby you set a target cost for achieving a specific optimization goal. This is the price you pay per one thousand impressions that actually convert. This means you don’t pay for impressions only like for CPM but you pay for impressions that lead to conversions on your business website.
4. Cost Per Click (CPC)
This metric refers to the average amount you pay each time someone clicks on your ad. It’s a good way to measure how effective your ad is on TikTok to lead to conversions and traffic to your website or landing page. So, every time a TikTok user clicks on your ad, you get a click.
In-feed Ads | Minimum Cost per Bid | Average Cost per Bid |
CPM | $0.50 | $10 |
oCPM | $4 | $4-$8 |
CPV | $0.01 | $0.10-$0.30 |
CPC | $0.02 | $1 |
Per Campaign | $500 | This Varies |
Average Tiktok Influencer Rates Per Post
Unlike TikTok Ads, which have a bidding system, TikTok influencer pricing is more flexible. This ad system is based more on influencer marketing than the TikTok ads algorithm.
Moreover, TikTok influencer rates per post vary based on factors such as
- The number of followers,
- Industry or niche,
- Key metrics (engagement, likes, views, shares).
However, these are the average TikTok influencer rates per post as of recently.
Influencer Tier | Price Per Post |
Nano-influencer (1,000-10,000 followers) | $5 – $25 |
Micro-influencer (10,000-50,000 followers) | $25 – $125 |
Mid-tier influencers (50,000-500,000 followers) | $125 – $1,200 |
Macro-influencer (500,000-1,000,000 followers) | $1,200 – $2,500 |
Mega-influencer (1 million+ followers) | $2,500+ |
Please, note that the above figures are rough estimations and will vary depending on the influencer you work with.
Are TikTok ads Worth It?
Advertising on TikTok is a valuable investment. According to research done in 2021, people spent 9.6 trillion minutes on Netflix compared to a whopping 22.6 trillion on TikTok. This discrepancy shows that TikTok is profitable for brands to advertise to customers. Further reasons why TikTok ads are worth it are:
Concentration Rate
Compared to other social platforms, TikTok has the highest user attention and retention rate. With users spending an average of 95 minutes daily on the app, this provides ample time to push your ads towards them.
Customer Insights
Another unique feature of TikTok is the TikTok ads analytics. This algorithm provides insights into campaign performance, like impressions, click rates, engagement, conversion rates, and cost per action. This way, you can monitor everything and make improvements as needed.
Wide audience
TikTok boasts a huge user base. The younger demographics, particularly Gen Z and millennials are some of the largest demographics. More so, with TikTok’s over 1 billion active monthly users, you get a highly engaged audience that can help increase brand awareness and conversions.
Smart Targeting Options
Furthermore, TikTok enables precise audience targeting based on detailed demographics such as location, interests, and behaviors. This allows you to optimize your reach and influence among your ideal customer base.
Encourages creativity
TikTok is a highly creative platform that flourishes on unique content and marketing strategies. Multiple successful brands have hopped on TikTok trends, collaborating with TikTok influencers and more to garner more followers and customers.
Is TikTok Advertising Suitable For Your Business?
TikTok advertising is suitable for your business because new, small, and large businesses flock to TikTok to advertise their products and services. It’s not an exaggeration to say all the big brands are on there, even smaller brands you haven’t heard about have made notable success on TikTok.
Below are some reasons why TikTok advertising is suitable for your business.
- Huge user base (over 1 billion active users).
- Access to a younger audience.
- Ability to drive website traffic, sales, and brand awareness.
- High engagement rates.
- Features tailored to promote small businesses.
Types Of TikTok Advertising And Marketing
TikTok has a variety of advertising and marketing options you can choose from. You can use one or more of these for more reach and virality.
1. In-Feed Ads:
This is the most popular one that many businesses use. Importantly, these are the bread and butter of TikTok advertising. In-feed ads appear just like regular TikTok videos on TikTok users’ “For You” page. This makes them feel less intrusive and more likely to capture the user’s attention. You will be able to showcase your product, create a trend around your product, or tell your brand story.
2. Branded Hashtag Challenge:
Brands often sponsor Hashtag Challenges on TikTok, aiming to promote a campaign or new product by encouraging users to participate using a specific hashtag. For this to take off on TikTok, brands often offer incentives, such as prizes or recognition to users who join the challenge and produce content based on the particular hashtags.
3. Branded Effects:
This is a more fun ad format like branded hashtags. TikTok allows users to create filters and stickers on the platform. Do not be mistaken because filters and other special effects are massive on TikTok. These features aren’t just for entertainment—they can also be monetized by users. As an advertiser, you can leverage this option to develop custom stickers, filters, or special effects that users can integrate into their videos.
4. Influencer Marketing:
This is not unique to TikTok, however, partnering with TikTok influencers is a surefire way to quickly gain followers and customers to your business. When you collaborate with TikTok creators, you get to work with influencers who can reach your target audience faster. This method is seen as more genuine because you leverage the influencer’s established fanbase and credibility to promote your brand or product.
5. TikTok Shopping:
Another genius move by TikTok is the TikTok shop which is a big boon for small businesses. Similar to eCommerce platforms like Shopify, the TikTok Shop makes it possible for you to integrate your product catalog directly into the platform. Henceforth, TikTok users can discover your products and easily purchase your products without leaving the app.
6. TopView Ads:
This is a type of ad format on TikTok that appears at the top of the user’s feed when they launch the app. They are full-screen videos that can only be skipped after 6 seconds. This type of ad takes priority placement and ensures high visibility to users.
TikTok Ads CPM
CPM, which stands for Cost per Mille or Cost per Thousand, is a pricing model utilized by TikTok for charging advertisers for their in-feed ads. It determines the cost advertisers pay for every 1,000 impressions their ads receive on TikTok. The average CPM on TikTok is approximately $10.
TikTok Ads CPC
TikTok Ads CPC stands for Cost per Click, representing the average cost advertisers pay for each click on their TikTok ads. The typical CPC for TikTok Ads is approximately $1. It’s important to understand that CPC can fluctuate based on your bidding strategy and the level of competition.
Conclusion
In recent years, TikTok advertising has emerged as one of the most effective tools in the digital marketing landscape. Businesses of all sizes, from small startups to large corporations, are leveraging TikTok ads to reach their target audiences. Regardless of your advertising budget, TikTok offers a variety of options to fit your marketing needs, making it accessible and beneficial for any business looking to enhance its online presence.
I’m Armand Manibo, an expert in influencer marketing with years of valuable experience. Through my work, I’ve partnered with hundreds of prestigious brands and thousands of influencers worldwide, generating over $500,000 in revenue for businesses. With a successful track record in influencer campaigns, I am proud to bring a wealth of insights.
