Are TikTok ads effective?

This blog discusses TikTok marketing and its potential for businesses. It covers various ad types, success stories, pros (massive user base, versatile formats, non-intrusive ads, creator promotion, performance metrics) and cons (skewed demographics, high production value, ad avoidance, costs, limited data integration). Consider before trying TikTok marketing.

TikTok needs no introduction; I mean, everyone has heard of it. 

You probably live in a cave if you haven’t heard about it. 

While many think of TikTok as a teens’ dance challenge app, the app has encompassed all demographic communities across the globe. TikTok user base has grown by around 800% since ByteDance, its parent company, acquired it in 2018. 

Instagram also introduced the Reel feature, but it is difficult to compete with TikTok. It has already surpassed the number of active users of Twitter, Facebook, Instagram, and every other app. Today the platform stands at more than 1 billion active monthly users. 

And marketers are taking notice of it. Marketers have always been devising innovative ways to reach their audience; TikTok provides them with different tools to tap into the app’s enormous marketing potential.

Let’s dig deeper into the world of TikTok marketing. 

What are TikTok ads?

Tiktok ads
Tiktok ads

TikTok ads are ad campaigns businesses, and brands run on TikTok to widen their brand awareness and boost conversions. 

Types of TikTok Ads

It is most likely that you have watched different ads while scrolling on TikTok. Whether you are a small business with a tight budget or a big brand, TikTok has covered you. It provides different formats of advertising at different pricing.

Let’s dive into the types of TikTok ads to discover which one is well-suited for your business. 

  • In-feed ads:

In-feed ads appear in the “For You” feed of the app when users scroll through the feed. TikTok’s “For-You” feed has an algorithm behind it to suggest ads based on a user’s activity. 

It is a 15-60 seconds skippable video that supports call-to-action where businesses can drive sales directly from these ads. For example, this GrubHub (a food service) ad allows users to install the app. 

  • Top-view ads:

Top-view ads show on full screen on the feed only when a user opens the app. These are 60 seconds ads, well suited for businesses that intend to show their products and services in detail. 

These are quite effective, as 75% of users say they grab their attention. Here’s an example of a top-view ad by M& M.

  • Branded hashtag challenges:

Branded hashtag challenges are one of their kind ads. These are a great way for the brands to integrate into the TikTok community and encourage Influencers and users to engage in fun challenges. 

By using this ad format, brands create awareness about new products, generate new leads, and increase brand awareness. Branded hashtag challenges have the potential of creating a minimum of 5x ROAS (return on ad spend).

  • Branded effects: 

Brands integrate their products and logos in newly created stickers and lenses that users use to create organic content. These branded effects are aimed at increasing brand awareness.

They also include brand-specific games for users to play and help them engage with their favourite brands in a fun way. 

  • Brand takeover

As soon as users open TikTok, they watch a full-screen ad with a link that takes them to a landing page or a hashtag challenge. These ads are brand takeover and combine in-feed, top-view, and branded hashtags. 

Although super-effective, they come at a high cost, as the brands exclusively design them to promote their content. 

Are TikTok ads worth your investment?

Let’s tackle something burger here. We know that businesses and brands across the globe are massively spending on TikTok ads. With ever-growing users, TikTok advertisements have also grown from 19% in 2020 to 37% in 2021. 

Despite the impressive numbers, data suggests that marketers hesitate to this TikTok for advertisement. They deem it innovative but are not sure about its trustworthiness. 

So, are TikTok ads really effective?

We might find the answer if we look into the statistics that give some insights into the ad spend and return on TikTok. 

Otto, a famous clothing brand, used TikTok ads for their upper funnel campaign. They utilized a mix of spark ads, on-feed ads, and collection ads to boost brand awareness and engagement. The campaign was a huge success as they were able to drive 90 million impressions and increase followers by 80%, and the number of likes was at a striking 600,000. 

My Medic, a first aid kit company aimed at saving lives, leveraged TikTok ads for their Cyber Friday sales promotion and experienced striking results. Their Value optimization campaign got an average of 2.5x ROAS (return on ad spend), a 77.5% decrease in CPA (cost per acquisition), and over 18000 leads. 

These are only two success stories from recent campaigns; there are many others. 

TikTok’s sky-rocketing engagement rates speak volumes about how it captivates users’ attention. People are 1.7 times more likely to discover a product than on any other social media platform. 2 out of 3 users are more likely to buy a product if they come across that product while scrolling through TikTok. 

So if you are skeptical about advertising on TikTok and wonder whether the TikTok ads work, then the answer is yes

But whether you are the kind of business that should advertise on TikTok or not is still a matter of consideration. 

Pros of TikTok marketing

To make it easy for you, here are some pros of TikTok advertising. 

1. TikTok has a huge potential to offer.

Using TikTok for advertising, you can tap a huge potential as TikTok has more than one billion active monthly users and is still gaining momentum. You can hit right in the bull’s eyes with powerful content and a good marketing strategy. 

2. A range of versatile formats engages users.

Another advantage of using TikTok as a marketing medium is that the users can duvet on your videos or stitch them into yours. It maximizes users’ engagement while allowing you to integrate into the community seamlessly.  

3. TikTok ads don’t feel intrusive.

TikTik ads have an advantage over all other kinds of advertising. It blends seamlessly into organic content so that it doesn’t seem like an ad at all. In fact, users find it amusing. 

DISQO’s research to measure the impact of TikTok ads found that 66% of users had a positive attitude towards ads, while 52% said that TikTok ads were engaging and all fun. 

4. Creators can promote your product instantly.

Recent data shows that small creator accounts on TikTok earn higher engagement than people might think. The creators know how to show off your product to the users, and this way, they encourage users to keep an eye on your brand. 

Therefore, featuring them in your ad campaigns can get your products to reach thousands of users in no time. 

5. TikTok marketing provides performance metrics.

One advantage of TikTok ads we can’t overemphasize is that by choosing TikTok advertising, you can measure ad performance metrics. Marketers can track, measure, and evaluate their ad campaigns. It gives them insights into improving their future ad campaigns to boost brand awareness and engagement. 

Cons of TikTok marketing

Although TikTok has enormous marketing potential, it comes with some disadvantages, which we will discuss below.

1. TikTok doesn’t represent all demographic groups equally.

According to TikTok statistics, Gen z and younger Millenials make up 63% of the user base. That said, most TikTok users are under 30, and you might find it irrelevant if they are younger than your target audience. 

2. High-production value videos.

TikTok marketing requires creators to have hands-on experience in creating content. It means every time, you have to make fresh content, rewrite captions, and manage many resources.

While even if you are done with creating content, testing and optimizing your ad campaigns is a never-ending task.

3. TikTok ads are easy to avoid.

It is no secret that people hate ads playing right before their faces. Edelman Trust Barometer Special Report says 73% of consumers try to avoid ads. If this is the case, the effectiveness of your ads depends solely on the content you generate. You must hook the audience to the content. Otherwise, they will scroll down. 

4. Ad costs might not decrease any soon.

No doubt TikTok provides so much to marketers, but this is not the platform when we look for the cheapest ad campaigns. If you are unfamiliar with TikTok advertising, it might be shocking to discover that the minimum spend for a campaign is around $500 daily. 

It can be difficult for small businesses to allocate this much budget for marketing.

5. Limited integration with data-driving tools.

When we think about the future of advertising that uses third-party data, there is a big question mark. Think of Apple’s recent privacy updates and Google Chrome’s pledge to remove third-party data trackers. While it is yet to be seen what measures TikTok takes to fetch the first-party data, one thing is for sure. Relying too much on TikTok for marketing might be disadvantageous for marketers. 

Final thoughts

TikTok is an equally exciting platform for audiences and creators. While the app’s popularity among potential customers is on the rise, the only thing businesses need to generate ROAS is the best creative assets. Have you ever tried TikTok marketing for your business?

If yes, then we would like to hear about your experience.

If not, then you must analyze the pros and cons before giving it a shot.

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