With over 3.5 million downloads, TikTok is one of the most commonly used social media platforms out there. It’s grown to the point that even Meta jumped on the train and created “Instagram Reels”! TikTok is based around short-form 10-30 second videos, serving a generation that has been perceived to have a low attention span. With Tikok’s explosion in popularity, it makes sense that thousands of companies are rushing to test out the platform’s video advertising. In this guide, we will cover how much TikTok ads cost, the various types of ads on the platform, factors that impact the cost of ads, and more.
Types of TikTok Ads
The available types of TikTok ads include in-feed ads, brand takeover ads, branded hashtag challenge ads, branded effects ads, collection ads, top view ads, and spark ads. In-feed ads are by far the most used format by advertisers on the platform. They appear every few “scrolls” by users, and they look similar to the organic content that is posted by normal browsers. Brand takeover ads are also popular, and they are often used by companies with high advertising budgets. Thus, they tend to be more expensive than in-feed ads.
Hashtag challenge ads are another premium type of ad placement. By encouraging users to join in a “hashtag challenge” by uploading their own video including content related to the advertising brand, the primary goal tends to center around creating a viral trend. Unless you have a genius-level idea for a hashtag challenge ad that instantly takes the platform by storm, it’s going to cost a pretty penny to obtain significant results from this ad type.
Factors that Impact the Cost of TikTok Ads
Click-through-rates and conversion rates are the 2 main factors that will impact the cost of your TikTok ad campaigns. Many of the other factors that impact the cost to run TikTok ads are out of your control; though if you set your ads using effective tactics, then you can directly make your ads less expensive. It’s important to note that TikTok doesn’t use the traditional “pay-per-click” payment model that Google, Facebook, and Instagram use. Instead, TikTok uses “cost-per-mille” (CPM) which refers to the cost per thousand ad views. This is similar to YouTube’s (and other radio ad platforms such as Pandora’s) ad cost system.
Tips for Reducing the Cost of TikTok Ads
For example, let’s say you sell fidget spinners through an online e-commerce store. You decide to run two separate $1,000 in-feed campaigns on TikTok. Campaign A generates 200 sales, and Campaign B generates 500 sales. Cost per conversion is what matters to you rather than cost per mille, because your revenue comes from selling products instead of an alternate monetization source such as hosting display ads. Campaign B’s cost of $2 per conversion is more favorable than Campaign A’s cost of $5 per conversion. Thus, to reduce the cost of your TikTok ads, you should keep running Campaign B or use a similar ad format for a new campaign.
This is a very simple example; to give yourself the best chance of having a low-cost TikTok ad camping before you have launched any ads, try these tactics:
- Use a video that grabs your audience’s attention within the first three seconds of viewing the ad.
- Include a powerful call-to-action (CTA) to direct viewers to your website, or wherever you want to send them to.
- Target users that are most relevant to your target market. Available targeting options include age, gender, language, behavior, and interests.
Average Cost of TikTok Ads
According to Artyom Dogtiev of businessofapps.com, the average cost of TikTok ads are as follows:
- “Average TikTok Ads CPM – $10
- Average TikTok Ads CPC – $1
- Minimal spend per campaign – $500
- TikTok influencer post pricing ranges from $5 to $2,000”
The $10 CPM is about on par with YouTube, which typically ranges from $5 to $20. In terms of influence marketing, you could end up paying an influencer much more than $2,000 depending on the size of their audience. This form of advertising is not handled directly on TikTok’s ad interface, however.
The Cost of TikTok Ads is Worth it if you Use the Right Strategies
TikTok’s ever-increasing popularity has made it a prime platform for video advertising; especially when it comes to reaching a younger audience. As we covered, the cost of TikTok ads can vary depending on the ad format and targeting strategies used. While click-through-rates and conversion rates impact the cost of ads, effective tactics such as using attention-grabbing videos and smooth CTAs can help reduce your cost per conversion.
Despite the cost, investing in TikTok ads is worth it if the right strategies are implemented. As the platform continues to grow, it’s important for businesses to stay up-to-date with the latest TikTok ad trends and techniques to remain competitive in the ever-changing landscape of digital marketing. SunCity Advising’s team of online advertising experts specialize in running TikTok ad campaigns that produce favorale results and scale effectively. To speak with one of our TikTok ad managers, give us a call or send us a message today!