TikTok ads for business: how much do TikTok ads cost?

TikTok is a short video-sharing app that was launched in 2017 and has quickly become one of the most popular social media platforms in the world over the last few years. It is the third largest, trailing Facebook and Instagram and ahead of Snapchat and Twitter. For a time, TikTok was the most downloaded non-gaming app in both the Apple and Google Play stores. It is projected to have 2.25 billion users by 2027.

Beyond making memes and viral videos, TikTok users are people with real needs, so the app has a large market. The company's executives claim that users are 1.5 times more likely to purchase a product after seeing it advertised on the platform. Truly, TikTok is a good place to advertise if you want to reach a large, active audience. It should be a part of any online advertising strategy in 2023, particularly if your business is targeted at young people. 

This guide explains why you need to leverage TikTok for your business, how to make ads, and best practices for making the most of your campaigns.

The evolution of TikTok advertising

TikTok did not come with an advertising feature when it first launched. As the app gained popularity and brands needed to advertise on it, they had to look for alternatives, such as influencer marketing.

The ad feature on TikTok was finally added in late 2018, and it went live the following year, but many businesses were hesitant to use the feature because the costs were prohibitively high. However, as TikTok now offers brief native video ads, brands can promote their businesses there at a lower cost. Therefore, business owners no longer need to pay exorbitant fees to promote their brands, as is the case on other top social media platforms.

What are the types of TikTok ads?

TikTok offers a variety of advertising options, but not all of them are available worldwide, so be sure to first check your local availability.

•  In-feed ads

TikTok in-feed ads are ads that you can create yourself using the TikTok Ads Manager and that appear in the user’s feed.

• Video ads

This is the type of TikTok advertising that is most commonly used. Brands or creators can create video ads using a TikTok Ads Manager account. They look like typical TikToks but lead to a landing page instead when clicked. Video ads appear in a user's feed automatically and can be engaged with, but they cannot be dueted or stitched.

• Spark ads

Spark ads are similar to video ads in some ways, but they allow you to use organic posts from your account or those of other creators who have given you permission. Users can stitch or duet these ads. Even after you stop paying for them, they stay on your profile and help to raise the overall metrics for your brand. The engagement rate for Spark ads is 142% higher than that of typical in-feed ads. To get started with Spark Ads, see the Spark Ads Creation Guide.

• TikTok Image ads

Image ads are still pictures with text and a brand or app name on them. However, this ad type is only available through the Global App Bundle and Pangle Placements, which are only available in a small number of countries. See the list here.

• Playable ads

Playable advertisements are gamified video ads that allow for user interaction through gameplay. When a user views your video, they are encouraged to tap or swipe to interact with your advertisement in a full-screen playable experience. However, this feature is only available in select countries. 

• There are carousel ads, which allow advertisers to post up to 10 images with respective captions in a single ad; collection ads, which are typically a mix of different formats; and Pangle ads, which are placed through the TikTok Audience Network.

TikTok-managed brands have access to special TikTok ad formats. They include:

TopView ads, which run for 5 to 60 seconds when the app is opened, Users cannot exit the ad but have to watch through it.

Branded Hashtag Challenge: This is an ad campaign where user-generated content is displayed on the hashtag challenge page for about three to six days for visibility and engagement.

Branded Tools: these include customized filters, stickers, and other special video effects that make your content more engaging.

Do you need TikTok advertising for your business?

In answering this question, you need to carefully consider the demographics of your target market.

TikTok is very popular among Gen Z and Gen Alpha users. According to a Statista report, approximately 7 out of 10 respondents aged 18 to 19 and 56% of respondents aged 20 to 29 said they used TikTok. 

TikTok's users are mostly female, accounting for about 53.4% of global users. It is the only major social platform with a predominantly female audience. This can be traced to a few reasons, such as the name of the app and the type of content shared on it.

So, if your business clientele mostly includes young women—you’re a freelance stylist or make-up artist—you should seriously consider creating a TikTok account and advertising there. This is not to say that young men cannot be targeted on TikTok, as the gender balance is not as lopsided as we may like to think. A clever strategy could be to advertise men's products in a way that not only targets men but also persuades females to buy them for their male contacts.

If your target audience is more Baby Boomers or Generation X or spans a wide range of ages, you may want to use Facebook, Instagram, and Twitter because they are more likely to be found there. Learn how to achieve your marketing goals using Google Ads.

How much do TikTok ads cost?

TikTok is rather expensive when it comes to ad costs. It surpasses other top social media sites like Facebook and Instagram. However, because ads are still a relatively new feature, TikTok can afford to charge such high rates because they know that brands would rather pay that much in a relatively uncluttered space than join the stiff competition on other social media platforms.

TikTok charges for ads based on four major metrics, namely: cost-per-mile (CPM), cost-per-view (CPV), cost-per-click (CPC), and optimized cost-per-mile (oCPM). Typically, every 1,000 views cost around $10. Using TikTok's simplified ad placement options, you can set your own daily budget, starting at $5 per day. Obviously, the more you spend, the more potential you have to reach new customers. A branded hashtag challenge on Tiktok's Discovery banner can cost up to $150,000, plus other minor promotion costs. An entire ad campaign on a large scale can run into tens of thousands of dollars.

With all these enormous prices, one thing is clear: If you are thinking about running ads on TikTok, make sure they are serious and well-designed to drive sales. If you want a cheap and cheerful viral marketing campaign, you should think about using influencers instead.

Running a TikTok ad in 7 steps

Step1: Create a business account

The Ads Manager is only available on TikTok business accounts. If you already have a personal account, you can easily switch in these few steps: Go to Settings, tap on Privacy, then Manage Account, and then Switch to Business Account. A business account provides access to analytics that can tell you the best time to post on the app, as well as other features, such as a link in your bio.

Step 2: Open the TikTok Ads Manager

The Ads Manager is the platform's feature for managing all paid promotions. Although the TikTok app is designed for mobile devices, we advise using your TikTok ads manager account from a desktop computer. This will be a web version, but it provides a better view. Type in ads.tiktok.com on your desktop and log in with the details of your TikTok Business account.

Step 3: Select your campaign goal 

There are four possible objectives for your campaign:

• Traffic: if you want more people to visit your page or website, Of course, the ultimate goal is to generate a soft lead for possible conversions.

• Engagement: to increase your online presence and build a following. Creating a community is a great way to advance your brand before a launch.

• Client leads, allowing you to target potential customers and nurture existing ones.

• Website conversions: if you want to increase the number of conversions on your store's website.

Step 4: Decide who you want to reach.

The next step is to decide who will see your ads. This depends on the particular product or service you are selling. You get to define your audience along the lines of gender, age group, language, and location. If you choose "Custom Audience",  TikTok will decide for you, but you can also add a few parameters of your own.

You can further target an audience through their stated interests, such as music, food, or beauty. Make sure you target users who are active on TikTok and engage often. You also decide whether your ads will appear only on TikTok or also on Pangle.

Step 5: Set your budget and schedule

Choose how much you are willing to spend on the ad for the duration of the campaign. Your daily budget can be anywhere between $5 and $70. In this step, you also choose how long to let your campaign run. If "No end date" is chosen, your campaign will run indefinitely until you decide it has served its purpose.

Step 6: Create your ad

This is the main step. Here, you can either choose to upload a new video that is not part of your TikTok feed or choose one of your already-posted TikToks to run as a video ad. Your ad must include a call-to-action button, such as Call, Book Now, or Send Message, as well as a link to your website.

Remember that your content must adhere to TikTok’s ad specifications for image and video ads.

Step 7: Go live:

TikTok immediately reviews the ad to ensure it meets the requirements, and it is published once it does. However, launching an ad is only the means to an end. You should monitor your results as your ad runs to learn what works and what does not, so you can optimize for your next campaign. Also, be ready to seek out and learn more about the platform's potential impact on your business. 

Best practices for advertising on TikTok

Advertising on TikTok can be a great way to reach a large audience of potential customers. Here are a few tips to help you get started:

• Keep your videos short and to the point. TikTok users have short attention spans, so you need to make sure your videos are no more than a minute long.

• Use eye-catching visuals. TikTok is a visual platform, so you need to make sure your videos are visually appealing. Use bright colors, interesting fonts, and eye-catching graphics.

• Use hashtags and relevant keywords to help people find your videos. When you use relevant hashtags, your videos will show up in search results for those hashtags.

• Use sound effects and music. Sound effects and music can add a fun and engaging feel to your videos. 

• Promote your TikTok videos on other social media platforms. This will help you reach a wider audience.

• Track your results to see how your advertising is performing, so you know what is working and what is not.

• Be creative. The best TikTok ads are those that are creative and original. Don't be afraid to experiment and try new things.

In summary,

If you're looking to reach a large youth audience with your advertising, TikTok is a great platform to consider. With creativity and the right knowledge, you can create engaging ads that will help you achieve your business goals. If you are a freelancer, you will need the right tools and information.

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