How Much Does TikTok Advertising Cost + How it Works

Social Media Marketing
How Much Does TikTok Advertising Cost + How it Works
Article by Bisera Stankovska
Last Updated: December 02, 2022

As the world’s fastest-growing social platform, businesses have taken advantage of TikTok's vast marketing potential.

In the second quarter of 2022 alone, direct-to-consumer brands have spent 231% more on TikTok ads.

With the skyrocketing popularity of TikTok advertising, you can leverage the social network's power to grow your consumer base.

But first, you need to learn how much does TikTok advertising cost, how it works, and how to get started promoting your business to millions of potential customers.

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TikTok Advertising Cost Statistics

As of November 2022, TikTok has over 1.5 billion monthly active users worldwide. With a wide range of demographics and audiences, this app has been a gold mine for brands.

TikTok ads pricing varies depending on what you're looking to get out of your ad campaign. If you're looking for brand exposure, the average TikTok ad cost-per-click (CPC) is $1. A good example of this would be Synth Labs, a skincare brand that managed to drive traffic with only $0.32 per click.

If you're looking for more engagement and interaction from your audience, the average cost per impression (CPM) per 1,000 views is about $10.

Many marketers suggest having a budget of at least $1,000 for a simple campaign.

The average engagement rate on TikTok is 5% - 16%. If your goal is to get more clicks from visitors who are likely to convert into leads or sales, this number will help determine whether or not the cost of your ad campaign will be worth it.

TikTok influencers may charge $5 to $2,000+ per post, depending on popularity, credibility, and follower count.

A nano-influencer with 10,000 or fewer followers may charge between $5 and $25 for each post.

A micro-influencer with 50,000 or fewer followers may charge between $25 and $200 per post.

Mid-tier influencers with 50,000 to 500,000 followers have a rate of $100 to $1,000 for each post.

Macro-influencers with 500,000 to 1 million followers have a rate of $1,000 to $2,000 for each post.

A mega-influencer with more than a million followers charges more than $2,000 per post.

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4 Elements that Influence TikTok Ads Cost

1. Ad Campaign Objective

The first step to determining your TikTok ad campaign's cost is to determine its objective.

What do you want the ads to accomplish? Are you hoping for conversions, awareness, app installs, video views, traffic, or lead generation?

For example, if you want to boost e-commerce sales, advertise TikTok app downloads and in-app purchases.

If you want to generate leads, advertise your website. If you wish to promote a contest or a new product, advertise your brand or product name.

Once you're clear on your goals and how much money you have available for them, it's time to break down those goals into specific strategies.

2. Budget & Bid Amount

Once you've defined your objectives, you'll need to determine how much you're willing to spend on your TikTok ad campaign.

A combination of factors determines a TikTok ad price.

The first factor is your budget, which determines the total price you will pay for each impression.

You can choose between a cost cap or the lowest bid when setting at the ad group level. The former lets you stay within your bid amount.

The second factor is the bid amount, which determines how much you're willing to pay for each impression.

Once you publish your campaign, you can no longer make any changes to the type of campaign budget or ad group level.

3. Audience Segmentation

This is the process of creating specific target audiences based on their demographics, interests, and behaviors.

TikTok suggests integrating your audiences by either focusing on a specific niche or running an ad group without interest targeting, letting the algorithms work.

If you choose to do the former, you can expect a little higher CPC and CPM than campaigns that target scattered users.

4. Click-Through-Rate (CTR) and Ad Creative

The CTR and ad creative are the most crucial factors when controlling your TikTok ad cost.

The CTR is the ratio of clicks your ad gets compared to the total number of impressions your ad gets. The higher the CTR, the more successful your ad campaign is.

On the other hand, a TikTok ad creative is a form of image or video that users can engage with.

According to TikTok, there are eight golden rules for an effective ad creative.

  1. Timing: Shorter videos can be more effective than longer ones, so prioritize the view-through.
  2. Narrative: Make the narrative user-centric from start to end.
  3. Stimulate Senses: Your creative should attract users' attention by editing it properly and ensuring the pace is on point.
  4. Sound: Use relevant sound. It could be music, a voiceover, text-to-voice, or a combination of any of them.
  5. Memorable Messaging: Utilize captions and text overlays so your audience can get the key message of your ad.
  6. Space: Fill the screen and optimize it for all devices. Avoid overlapping with the user interface.
  7. Go Native: TikTok suggests going "lo-fi" over polished content for more authenticity, making you connect better with your audience.
  8. Effects: Make effective use of the platform's effects to boost your narrative and engagement.

Why Advertise on TikTok?

TikTok ads are the latest craze in the world of social media marketing. From clothing to movies and everything in between, companies have turned TikTok into their billboard.

Many businesses are shifting advertising dollars from mainstream websites to TikTok, and it’s clear why.

The social platform offers one of the most affordable ad options for brands of all sizes.

The platform allows you to target precise audiences and measure ad success. It's an easy way to reach a wider audience too—one that is highly engaged and has a high propensity to purchase.

With TikTok’s massive user base, you can drive traffic to your website and boost e-commerce sales.

You can also increase brand awareness, generate leads, and drive conversions. When done right, TikTok ads can help your business flourish.

Advertising on TikTok is a great way to reach a new generation of social media users who are increasingly migrating from Facebook to TikTok.

TikTok is popular among audiences of all ages. 32% of its users are aged 19 and below, 29.5% are aged 20 to 29, 16.4% are between 30 and 39 years old, 13.9% are between the ages 40 and 49, and 7.1% are aged 50 and up.

TikTok trends are what make it so effective at driving sales. Trending videos are viewed by millions of people every day and are an excellent way to increase your brand exposure and get more eyes on your ads.

TikTok makes it easy for brands to create engaging videos for their customers by allowing them to upload content directly from their phones or tablets.

It makes it easier for customers to interact with your brand through videos than in any other format because they don't have to leave the app or website.

You can choose from several different formats when creating ads on TikTok. You can use text only or include images and captions. This helps ensure that each ad stands out from the rest.

6 Types of TikTok Ads

  1. TopView Ads: TopView ads appear once a day right after a user opens the app, which means that most people see them.
  2. In-Feed Ads: When users scroll through their For You feed, the fourth video ad they see is the In-Feed ad.
  3. Branded Hashtags: These are brand-related hashtags that prompt users to create content around that topic or theme.
  4. Brand Takeovers: This ad type may combine TopView, In-Feed, and branded hashtags, and could be pricey. A good example of a brand utilizing the brand takeover ad would be Guess, which managed to gain more than 12,000 new followers and a 14.3% engagement rate.
  5. Branded Effects: These ads use 2D, 3D, or augmented reality to place product images into TikTok videos. These are usually product stickers or filters, which are effective in boosting brand awareness.
  6. Sponsored Ads: These are also referred to as influencer ads, wherein you collaborate with influencers to promote your product or services.

How to Set Up Your TikTok Ad Account

  • Create a business account with TikTok.
  • Enter your billing information.
  • Select your payment type from the list of options. In most cases, your payment method will be PayPal, but it may also be credit card or bank transfer details if you use a different payment method for other websites that accept it.
  • Set up your ads manager mode. This allows you to set up preferences for how many ads appear in your feed and how often they're updated or added by default when posting updates.
  • Build your ad. Consider Promo, a video marketing tool that lets you look for templates to make aesthetically pleasing promotional videos.
  • Finally, submit your ad. TikTok usually takes a day to review ads. Before submitting, see that your ad follows the platform's requirements and policies.

TikTok Advertising Cost: Wrapping Up

TikTok is one of the most influential platforms for marketing purposes and is showing no signs of stopping its popularity daily.

When it comes to TikTok advertising and utilizing this platform to promote your brand, you want to ensure that you get the most bang for your buck.

Know what you're doing, allocate your budget well, and use the platform's features to the fullest, and you can improve the reach of your video marketing content.

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