How They Work + Cost and Review Process [+ Examples]
In 2018, Musical.ly, music sharing app, was purchased by Chinese tech firm Bytedance and merged with the firm’s new app,TikTok.
It started out as a video-sharing social network where users shared short clips of themselves lip-synching and dancing to trending music. It has since expanded to house more diverse videos and become a creative outlet for brands.
In this article, we’ll cover everything you need to know about TikTok’s advertising platform and discuss if it’s worth leveraging.
What is TikTok For Business?
TikTok For Business is an all-in-one tool for marketers to advertise on TikTok. Instead of devising their own strategy, the platform helps marketers through the entire process of creating advertisements, setting budgets, reaching target audiences, and analyzing campaign data.
The sole marketing format for businesses to use on TikTok is video advertisements. The TikTok For Business Ads Manager platform helps marketers create these advertisements, and you can choose from five different formats.
TopView ads appear once a day immediately after a user opens their app for the first time. Here’s an example of a TopView ad by M&M that advertises a virtual Halloween experience.
TopView ads can be up to 60 seconds long, making it perfect for businesses looking to advertise products or services that require longer periods of attention, like TV or movie trailers. The longer run-time works, as 71% of users say TopView ads grab their attention.
In-Feed ads appear as the fourth video users see as they scroll through their “For You” feed, which is where they land when they open the app. A For You feed features videos that the algorithm believes are of interest to the user based on their app activity. A study by Neuro-Insight found that TikTok In-Feed ads achieve 23% higher detail memory than TV ads.
Here’s an example of an In-Feed ad created by food delivery serviceGrubHub.
In-Feed ads can feature a CTA, making them especially useful for marketers looking to use the platform to drive sales and conversions. Acorns, a finance business, has used the In-Feed CTA feature to prompt viewers to download their app.
Some brands create their own version of In-Feed ads by partnering directly with influencers. For example, Raising Cane’s Restaurant partnered with famous TikTok influencer Chase Hudson to promote their business.
Users who follow Hudson would see this video in their For You feed.
Branded Hashtags are advertisements that businesses use to inspire TikTokers to create content around a brand-related hashtag of their choice. Brands using this ad format have exclusive access to the hashtag, which is not the case on other social media sites. Its exclusivity, however, comes with a higher price tag and reported average costs are around $150,000 USD for six days.
The investment can be worthwhile, though, as the ad type has a median engagement rate of 17.5%. In addition, 77% of TikTok users like it when brands come up with new challenges, trends, or memes for them to join in with, so using this format speaks directly to audience desire.
The hashtag challenge #WorldSeries, sponsored by Major League Baseball, is featured on TikTok’s Discover feed, and the hashtag encourages users to post videos showing how they’ve celebrated baseball games. Clicking on the hashtag brings users to an internal landing page that features the sponsors’ logo, challenge description, and other videos using the hashtag.
Brand Takeovers are an ad format that can include TopView, In-Feed, and Branded Hashtags all at once, and the takeover aspect of this type is that the platform only features one business per day. The starting cost is reported to be around $50,000 USD per day.
Guess, a fashion company, ran a Brand Takeover on TikTok to advertise their denim jeans. Over six days, its TikTok account gained over 12 thousand new followers and generated a 14.3% total engagement rate. Its Brand Takeover included Top View, Branded Hashtag, and In-Feed ads.
Branded Effects ads use 2D, 3D, or AR to add images of your products into TikTok videos. Brands typically create stickers of their products or filters that TikTokers can use when creating their videos. These filters and stickers increase engagement and brand awareness, as using them typically involves playing brand-specific games.
Not Okay Movie used the Branded Effects feature to create a game where users can use the effect to find out which character from the movie they are. The effect has generated over 2,000 videos of UGC of people playing the game.
In this TikTok ad, food brand Fly By Jing partnered with food influencer TiffyCooks to demonstrate how easy (and tasty) it is to use the brand’s product.
Leveraging a known influencer is always a great way to raise awareness for your brand and build trust with your audience. Another great thing about this ad is that the offer is clear: Users can get 10% off by clicking on the CTA and using the code.
To promote its latest partnership with Beyoncé and Jay-Z, the brand has launched a series of ads including the artists. The ad is simple, but effective, and leads users to a landing page where they can learn more about the campaign.
In 20 seconds, this food brand accomplishes a lot.
The video effectively showcases how its product is used. The caption also gives users some background on the brand and tells a story in just a few words. In addition, the CTA leads users right to a product page (instead of the homepage) where they convert.
Lastly, too often, ads seem jarring because they don’t fit the feel of the platform. That’s not the case here. The ad feels so natural in the feed that you wouldn’t know it was an ad if you removed the #sponsored tag and CTA.
TikTok Advertising Cost
When it comes to budgeting for Tiktok advertising, here’s the breakdown. You can select a daily or lifetime budget, which can be changed at any point during your campaign.
At the campaign level, you must have a minimum daily and total budget of $50 USD. For an ad group level, your budget must exceed $20 USD daily.
As for the advertising cost, TikTok hasn’t released its pricing policy. However, there is some information out there.
In 2020, Digiday reported that TikTok had a cost-per-mille as low as $1. After running their own experiment, JungleTopp reported that the cost-per-click was $0.19 – much lower than Facebook and Instagram.
With this platform, you can choose between several bidding strategies, each optimized for specific goals.
Should you leverage TikTok in your marketing strategy?
Since peaking in 2020, TikTok has become a go-to advertising platform for many brands. As the number of users increased, the number of ads they saw also followed from 19% in 2020 to 37% in 2021.
A 2021 Kantar report ranked the short-form video platform in the number one spot for ad equity, surpassing Amazon, Instagram, Google, and Twitter. This isn’t the first time either – they also held that spot the year prior.
Despite this impressive ranking, the data suggests marketers are still unsure about the platform. According to the report, many marketers view TikTok as highly innovative but not quite trustworthy.
From a consumer perspective, consumers go to TikTok for authenticity and community.
According to a 2020 Nielsen study surveying global TikTok users, 59% of respondents said they feel a sense of community when they hop on the app. It’s also a major source of discovery for consumers, with 55% of users saying that TikTok helps them discover new things.
So, the audience is there and ready to engage. However, the decision to use TikTok For Business in your marketing strategy ultimately comes down to your business goals and desired campaign outcomes.
To make the decision easier, we’ve compiled a list of pros and cons for marketers to use when making this decision.
TikTok For Business Pros and Cons
TikTok Ads Manager will help you expose your content to new audiences.
TikTok has 1 billion global active users, is available in 155 countries, and has an ad reach of roughly 885 million people. Based on this alone, your TikTok videos have significant reach and potential.
TikTok Ads’ Manager ‘similar audiences’ feature helps you select lookalike audiences that are similar to your target ones for exposure and building brand awareness in new groups.
78% of TikTokers also agree that you don’t need to have thousands of followers to go viral on the app, so there is potential for all businesses to generate brand awareness and engagement on the app.
TikTok’s largest user base is not representative of all demographic groups.
Users aged 18 to 24 make up almost 43% of the app’s total audience, meaning that the user base you market to the audience may be younger than your intended target audience.
As a result, advertising on the app may require you to tap into a user base that may not understand the need for your product or service.
TikTok thrives off of informal, ‘behind-the-scenes’ content.
65% of users agree that professional-looking videos from brands feel out of place or odd on TikTok. 75% of users also say that brands videos on TikTok should feel like a view into their and their employees, real everyday lives.
This means that the production cost for the videos you make and share on TikTok will be significantly lower than the budgets you have for other platforms, helping you save money, and your audience will actually enjoy it more.
TikTok requires niche content.
The type of content that TikTok calls for may not be in line with your brand mission.
If you’re a more serious, sales-focused business, learning to adapt to the fun and exciting content required for TikTok versus just driving sales conversions may be a difficult skill to learn.
TikTok has higher engagement rates than other platforms, and users are more likely to make purchases.
2 out of 3 users are also likely to buy something while on the platform, and users are twice as likely as users of other social platforms to recommend a product or service they’ve discovered on TikTok. This means that, combined with high engagement, your users are also more likely to actually take action on the engagement they have with your content, meaning that the potential to drive sales is high.
The same goes for TikTok Ecommerce partner platforms, but it does include some of the most popular tools like Shopify and WooCommerce.
Should you choose to incorporate TikTok into your advertising strategy, it can be a valuable tool for growth. While the app does call for niche types of content, brands and businesses can diversify their strategy and advertise to a new audience.
Whatever your final decision is, TikTok For Business is available to those who want to harness the app’s advertising potential.