In a multi-million mobile app space, there are several apps that consume the most time people spend with their smartphones and tablets. Right next to YouTube, Meta, and Instagram, there is the rising star of TikTok. Thanks to its innovative machine learning algorithms, TikTok is capable to identify people’s interest-based after only a handful of videos watched, and then it serves up similar videos over and over.
For the last several years, it’s been the only rival that has managed to shift the social media paradigm and it is gaining popularity among mobile users astronomically fast. Even such mega-successful video streaming services like Netflix and similar are impacted.
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Claim Your FREE TikTok Success Audit!According to the recent research in 2021 people spend ~9.6 trillion minutes were spent on Netflix and a whopping 22.6 trillion on TikTok. Clearly, all over the world people’s attention on mobile is shifting towards TikTok, as the ultimate producer of highly engaging video content that costs zero to produce.
Following the steps of previously established social media giants such as Meta, Twitter, and Instagram, TikTok launched an advertising platform called TikTok Ads. Having such a big, diverse, and engaged audience as TikTok has, puts the company in a great position to connect brands with audiences, it has high confidence that will find those brands’ products and services useful and worth buying.
TikTok Ads Cost Statistics
- Average Tiktok engagement rate – 5-16%
- Average TikTok Ads CPM – $10
- Average TikTok Ads CPC – $1
- Minimal spend per campaign – $500
- Price to create TikTok video on Canva – free
- TikTok audience’s biggest age group is 18-24 years old (24.7% of the total are male and 18.1% are female)
- TikTok influencer post pricing ranges from $5 to $2,000
Initially, TikTok captured the minds and hearts of a young generation (think Gen Z) but as of 2022 people from all generations watch videos on TikTok, and hence it puts the company’s advertising platform – TikTok Ads high on the list of digital marketing tools for every brand. As of 2021, TikTok got more online traffic than Google, the app was downloaded more than 3 billion times, and spent about 20 hours watching videos on it on a monthly basis.
Following the phenomenal success of the platform, advertising on TikTok quickly followed. Today we can talk about two major ways of running ad campaigns on TikTok – via TikTok Ads platform or via TikTok Influencers.
Let’s begin with the former first.
TikTok Ads: the cost influential factors & how to reduce it
After a few years of work-in-progress, since it was rolled out back in 2019, the TikTok has managed to improve its advertising platform and today its efficiency and easy-to-use are on par with Google Ads or Meta Ads. Obviously, as an app marketer, one of your goals is to increase the app’s user base, while trying to lower expenses. Here is how you can lower your TikTok Ads ad campaign costs.
Just like Meta and other popular social media platforms, brands can run ad campaigns either using the TikTok Ads dashboard themselves or choosing to approach a social media marketing agency that, thanks to their expertise, is capable to lower the costs yet meeting expectations for results.
For starters, the minimal CPM is $0.50 per mile, meaning marketers pay 50 cents for every 1,000 views of their ads. The lower limit for CPC is $0.02 per click and advertisers are obligated to spend $500 per ad campaign.
Similar to other online advertising platforms, factors that influence TikTok Ads costs have to do with how efficient are graphic creatives, level of engagement with ads, smart ad testing strategy, and having a robust analytics system in place.
Now, the tips for decreasing your spending on a TikTok Ads ad campaign can be split between several buckets.
Making TikTok authentic ad creatives
One of the most distinctive features of TikTok Ads ad formats is how well they are blended with user-generated content on one hand but on the other TikTok users still can distinguish between ads and videos generated by the users. Just like a regular video, ads can be liked, commented and shared. This visual similarity leads to high rates of engagement because TikTok users do not perceive those ads as advertising.
Having said that, for this perfect blending to work, advertisers need to make sure their ads are on par with regular video content. Meaning if an ad wasn’t shot in such well known TikTok visual style, it will be standing out for the rest of the feed on the TikTok app and users will just skip it. On the other hand, if an ad was produced in a true TikTok visual style, it will secure it high level of engagement and will require less of your marketing budget.
Partnering with influencers
Influencers are brand ambassadors on many social media platforms but TikTok is a special case. Thanks to its For You page section, which is highly visible to TikTok users, influencers are in a great position to engage with audiences and deliver brands’ messages. The important thing to remember for this tip is that you always need to make sure that you approach the right influencers for your brand, the ones that can actually be authentic in a video creative they will be shooting for your TikTok Ads ad campaign. If you fail to meet this requirement, most likely you’ll waste your Influencer marketing budget and won’t be able to bring down your costs.
Using the right ad format
TikTok Ads platform provides advertisers with multiple ad formats to use and you need to be familiar with each to make the most of it.
The In-Feed Ads format is similar to what Meta offers advertisers, it’s located directly on TikTok user’s “For You” page and this is the one that is meant to blend with regular video content posted by TikTok users.
The Brand Take-over Ads format name speaks for itself, it’s meant to be displayed on the entire app’s screen for a brief period of time (up to 5 seconds) and present brands front and featured to people. This is about as much exposure as it gets. Certainly, this format requires advertisers to be especially careful with their messaging and what that 5-second video ad should deliver within such a short period of time.
The Top Views format is similar to Take-over but it actually doesn’t occupy the entire screen, only a portion, and in this case, it’s the job of an app marketer to create a message catchy enough to users pause and watch an entire video ad.
The Spark Ads format really stands out from the rest because it allows advertisers to make an ad from an existing video that has a high level of engagement and hence has the potential to be an efficient ad.
And finally the Hashtag Challenges format – challenges and hashtags are two major drivers of virality on TikTok and the platform allows app marketers to leverage these powerful tools to run ads.
Conducting split-tests
Despite app marketers’ best efforts to come up with the most efficient ad creatives before launching the ad campaign, in reality, it’s nearly impossible to achieve therefore running a split-test for a TikTok Ads campaign is a must for app marketers. Running several ads with different creatives at the same time and carefully analyzing their performance allows identifying the best performing ad creative to focus your ad campaign on and hence decrease your costs. You also need to remember that different ad creatives resonate with different audiences and because it’s impossible to know a priori which one corresponds to which, a split test is what helps you establish this connection.
Using analytics properly
Finally, it’s absolutely essential to analyze carefully every metric provided by TikTok Ads’ built-in analytics and build working hypotheses about why specific ad creative performs in a particular way. The platform provides both a bird-view look at the entire set of ad campaigns running and a deep dive on a campaign level, with filtering and customizing data points available for analysis.
Now let’s take a look at the key data points that allow app marketers to assess their TikTok Ads campaigns’ efficiency.
To facilitate advertisers to achieve their goals, the auction-based TikTok Ads platform supports a number of business models such as CPM (Cost-Per-Mile or cost of paying for 1,000 ad views), CPC (Cost-Per-Click), CPA (Cost-Per-Action), and CPI (Cost-Per-Install) as a specific case of the CPA model. Aside from these models, app marketers should always remember one of the core principles that underpin any kind of auction-based marketing campaign – if you bid too low most likely your ads are not getting delivered and if you bid too high your TikTok Ads campaign ROI is definitely out of whack.
Top TikTok Platforms and Agencies
Now, if controlling your daily cost is more important than achieving a certain number of conversions per day, you should select either Bid Cap or Cost Cap settings in your ad campaign dashboard. If, on the other hand, your TikTok Ads campaign optimization goal is Conversion, then you should select Lowest Cost as your bidding strategy. Finally, if your campaign goal is achieving specific actions by your app users you should select the App Event Optimization setting.
We need to mention that despite the TikTok Ads platform has been online since the summer of 2019, very few reliable data sources for the costs associated with it are available. Having said that, let’s take a close look at each bidding strategy available on the platform, starting with CPM.
TikTok audiences’ age split
Every social media platform’s audience gravitates toward a certain age group, as you can see on the graph below, in the case of TikTok, it’s the 18-24 years old age group. Among TikTok users of this age, 24.7% of the total audience are female and 18.1% are male. Next, with a slight gap, comes users from the 25-34 years old bucket and here we have 17% of the total audience are female and 13.6% male. The distant number three are users of the 34-44 years old, with only 6.8% of the total audience being female and 5.9% male.
TikTok audience profile (%)
Source: Hootsuite
TikTok users geography
TikTok got its start in China but since then has spread around the world and here is what TikTok’s audiences percentage of the total population looks like for various regions. In countries like Saudi Arabia and Kuwait, more than 70% of their population the age 18 or older is on TikTok, which translates to Saudi Arabia having about 20 million using the platform. In the US around 46% of the population over 18 is on TikTok, which translates to 121 million Americans the age 18 or older uploading and watching videos shot by others on TikTok.
TikTok audiences reach rate ranking, by geography
| Country or territory | Reach vs. population 18+ in % | Reach age 18+, in millions |
|---|---|---|
| Saudi Arabia | 78.3 | 19.8 |
| Kuwait | 72.5 | 2.4 |
| U.A.E | 68.6 | 5.7 |
| Thailand | 63.7 | 35.7 |
| Cambodia | 60 | 6.5 |
| Malaysia | 57 | 13.5 |
| Vietnam | 55 | 39.7 |
| Qatar | 55 | 1.4 |
| Chile | 52 | 7.7 |
| Kazakhstan | 49 | 6.3 |
| U.S.A. | 46.5 | 121 |
| Ireland | 46.5 | 1.8 |
| Peru | 46 | 11 |
| Mexico | 46 | 41.7 |
| Phillippines | 46 | 33 |
| Indonesia | 46 | 87.5 |
| Brazil | 45 | 87.5 |
| Bahrain | 44 | 0.6 |
| Russia | 43 | 49 |
| Turkey | 40 | 25 |
Source: Hootsuite
TikTok engagement rate benchmark
Any digital ad is as good and effective as how much engagement it’s capable to invoke. TikTok users demonstrate a notoriously high level of engagement, it ranges from 3% to 9%. Certainly, different ad formats should trigger different levels of engagement, specifically for the Top-view format CTR is 12-16%, Take-over generates CTR = 7-10%, In-Feed video – 5-7%.
TikTok average engagement rates by format (%)
Source: Improvado.io
TikTok Ads ad creatives production cost
As with ad creatives for any digital advertising platform, advertisers can either hire a graphic design studio or use software to create it on their own.
If you choose to go via the software route, Canva is the most obvious choice, since Tiktok partnered with Canva in August 2021 to provide Canva’s superior yet easy-to-use graphical capabilities to its advertisers to design visually appealing and efficient ads. Canva pricing consists of three plans – Free, Pro ($120/year), and Enterprise ($360/year).
If you choose the hiring route, you may either hire a freelancer on the Upwork work marketplace. A professional studio-quality video ad creation pricing starts at $500 and up and you should expect it to be ready within 2-3 weeks.
TikTok Ads CPM
According to the platform rules, the average pricing of the Cost Per Mile starts at $10 per 1,000 views, and there is a minimum cap of $500 per campaign to be spent. Various companies that run TikTok Ads campaigns report different numbers for CPM, based on the performance of their ads targeted to various audiences located in different geographies. For example, TuffGrowth reports the cost of the 1,000 views of the ad on TikTok ads to be $6.06, JungleTopp claims TikTok CPM to be as low as $1.82, according to Digiday back in 2020 CPM was just $1,00.
TikTok Ads CPM from multiple sources ($)
Source: TuffGrowth, JungleTopp, Digiday
TikTok Ads CPC
According to multiple sources, the average CPC (aka Cost Per Click) for TikTok Ads is around $1,00. And again, the numbers that come for CPC from various companies are all over the place because they represent ad campaigns that were run for different audiences located in various geographies. JungleTopp digital media consultancy agency brings up the CPC value equal to $0.19.
The more comprehensive picture gives recent Hootsuite research on TikTok Ads CPC for various companies that ran ad campaigns to drive traffic to their brand. Note that the costs are given in local currencies for the countries where those campaigns were run.
Skincare brand Synth Labs Intl. managed to drive traffic, spending only $0.32 per click, online jewelry store Lion Wild team managed to burn their TikTok Ads campaign with $0.13 per click, Mallows Beauty brand achieved CPC as low as mere £0.04.
Hootsuite TikTok Ads CPC for multiple ads ($)
Source: Hootsuite
Now, let’s take a look at how much it costs to run a TikTok ad campaign via TikTok Influencers.
TikTok Influencers ad rates
The pricing for Influencers’ posts on TikTok is based on how many followers they have and by now it’s well established. There are 5 major tiers that define the pricing range per a TikTok’s post – Nano Influencer, Micro Influencer, Mid-tier Influencer, Macro Influencer, and Mega Influencer. The pricing starts with just $5-25 per TikTok video post to up to 10k followers and all the way up to $2,000 for a TikTok post to over a million TikTok followers
TikTok Influencers pricing per post ($)
| Tier | Number of Followers | Price per Post |
|---|---|---|
| Nano-influencer | 1-10k followers | $5-$25 |
| Micro-influencer | 10k - 50k | $25-$200 |
| Mid-tier influencer | 50k - 500k | $100-$1,000 |
| Macro-influencer | 500k - 1,000k | $1,000-$2,000 |
| Mega-influencer | Over 1000k followers | $2,000 |
Final Thoughts
TikTok has been the most downloaded mobile app for the last two years and it’s the fastest-growing video-sharing platform on the planet. TikTok users spend on average 49 minutes a day on it, almost a quarter of its male user base is between the ages of 18-24 and on the female side it’s 18%.
Thanks to an interest-graph-based algorithm, TikTok has managed to democratize its platform for regular users to get their video content to go viral, it’s not limited to the group of celebrities like it’s the case with Instagram or YouTube. Having an easy-to-use dashboard with a robust bidding system, a set of 5 ad formats, and sophisticated targeting options, TitTok Ads positions itself as of the top digital advertising platforms, on par with Meta Ads and Google Ads.
When it comes to reaching Gen Z age group, TikTok Ads provides superior efficiency compared with platforms from Meta and Google.