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Social Media Advertising

TikTok Ads Regularly Bring In 2.5X ROAS — But That's Not the Only Reason to Try Them

June 26, 2021
Tor Marom

TikTok ads have helped brands capitalize on organic virality, and the right campaign can bring in super-strong engagement — think 1M+ UGC videos, and an unpaid video from Lizzo.

Table of Contents

TikTok doesn’t really need an introduction. Everyone has heard of it. 

First Gen Z loved it, and it might be the new YouTube. Then it wasn’t just for teens any more — as of March 2021, half of TikTok users were over 30. 

Source: App Ape

At this point, even the AI transcription service we use here at MarketerHire has learned that “TikTok” is a word. 

See, TikTok had a breakthrough pandemic year. In summer of 2020, it hit 2 billion cumulative downloads, SensorTower reported — just five months after it hit 1.5 billion downloads.

In August, Instagram launched Instagram Reels, a TikTok knockoff — and it made a splash. In a bad way. “I can definitively say Reels is the worst feature I’ve ever used,” internet culture reporter Taylor Lorenz wrote in the New York Times

It’s hard to compete with TikTok. 

It was the most downloaded app worldwide in 2020 — downloaded even more than Facebook, according to data from App Annie

Even the reemergence of real life hasn’t shaken TikTok’s hold on the culture. It hasn’t left the top 10 on the Apple or Google Play stores in months, according to SensorTower. 

Obviously, brands are taking notice. How can they leverage the hot new app? 

We asked a panel of paid social media experts to weigh in on the power of TikTok, the brands it works best for — and how to build out successful paid campaigns on it.

The experts

TikTok’s secret weapon? Data science

For brands, TikTok stands out among social media platforms for one central reason: the recommendation algorithm behind TikTok’s For You page.

Unlike social media sites from Snapchat to LinkedIn, TikTok doesn’t primarily show users content from accounts they’ve followed. 

Instead, it often shows video recommendations, algorithmically generated based on an individual user’s behavior: think the content they’ve posted, liked and swiped past.

It’s a massive technical achievement. “The system is doing billions of calculations per second,” A.I. researcher Dinesh Raman told The New Yorker. “It’s data being transmitted at a scale I’ve never seen before.”

“The system is doing billions of calculations per second. It’s data being transmitted at a scale I’ve never seen before.”

For advertisers, the potent recommendation algorithm has three main benefits. 

Hyper-engaged users. 

The average TikTok user spends more than half an hour a day on the platform — which makes it the social media platform average users spent the second-most time on, according to eMarketer. 

Source: eMarketer

Meanwhile, teens and pre-teens spend an average of 105.1 minutes on the app daily, according to MMGuardian data. That’s a lot.

It makes sense, though — users get concretely, immediately rewarded for engaging with TikTok videos. 

As writer Ann Friedman put it in a newsletter about the platform, “I tap the heart to get more of what I want.”

Potentially massive organic reach — a.k.a. free brand awareness.

You don’t need a ton of followers to blow up on TikTok. Any account can do it, including a branded one. 

“I know creators with 500 followers who had a TikTok viewed 900,000 times,” Wong told MarketerHIre. “That doesn't happen on YouTube.”

“I know creators with 500 followers who had a TikTok viewed 900,000 times. That doesn't happen on YouTube.”

UGC about a brand can also achieve massive organic reach on TikTok. John Deere, for example, has no official TikTok account, but the #JohnDeere hashtag on the app has more than 3 billion views.

Lower CAC. 

“Our CAC on Facebook is $27, and our blended CAC is $8 because of TikTok,” Wong told MarketerHire. “[Organic] TikTok drove our customer acquisition costs down by 60%.”

That’s because some people make purchases based on recommendations from organic TikToks and UGC.

Also, greater brand awareness helps paid ads perform, on and off TikTok.

Speaking of...

Paid TikTok ad formats, explained

Advertising on TikTok can cost an intimidating amount — think $2 million for premium placement on a holiday — but it doesn’t have to. You can spend under $100 a day testing out TikTok’s ad platform; a lot depends on your timing and your desired ad placement. 

In-feed video.

This is TikTok’s standard ad type, inserted into users’ For You page. These 15-60 second video ads — almost indistinguishable from organic content, except for the CTA button — have become the most accessible ad type for small businesses.

Pricing: Requires a minimum daily budget of $20 per ad group, and $50 per ad campaign.

TopView.

TopView ads get premium placement — for a premium price. These 5-60 second videos are featured full-screen when a user first opens the app.

Pricing: Last year, Digiday reported that these ads cost about $65,000 per day, but that number has reportedly skyrocketed — TopView will cost nearly $2 million on a holiday in Q4 2021, according to Bloomberg

Branded effects.

Augmented reality effects are another useful tool for TikTok marketing. Brands can create custom effects like 2D and 3D lenses, stickers and filters, which TikTok users can use to enhance their organic videos.

Most recently, TikTok has added Gamified Branded Effects, which function sort of like Wii games — with these effects turned on, uses can control AR elements of their videos with their bodies. 

Think people juggling an AR ball by wiggling their eyebrows.

Pricing: Upon request.

Hashtag challenges.

These are probably the most popular of TikTok ad types. Used by major brands like Chipotle, these six-day challenges encourage users to interact and drum up engagement.

Though they often see strong ROAS — 90% of branded hashtag challenges see at least 2.5X ROAS, according to TikTok — a core campaign objective for these six-day challenges is typically generating awareness and UGC. 

To facilitate that, TikTok highlights sponsored hashtags in its Discover tab,, with CTAs recommending contributions.

Brands running hashtag challenges often collaborate with creators on sponsored posts tagged with the hashtag, and supplement hashtag challenges with TopView or in-feed ads.

Pricing: Bloomberg found that one of these challenges can cost a brand up to $500,000 for three days, and that doesn’t factor in music licensing fees or creator collaborations.

7 signs TikTok is (or isn’t) for your brand

“I really think every brand should try their hand at TikTok ads, because you really don’t know until you try,” Sanchez said.

"I really think every brand should try their hand at TIkTok ads."

Sanchez herself has seen ROAS of 2.5X on the platform, and a cost per action, or CPA, under $6.

However, not everyone sees performance metrics they’re excited about. 

“Right now, even if [TikTok] ads were free for us, our organic content would still perform better from a marketing standpoint,” Jason Wong told MarketerHire in February.

Some brands just have a better shot at paid TikTok success than others. Here are a few signs you should (or shouldn’t) open a TikTok Ads account, according to our experts.

4 signs TikTok ads could level up your brand

  • Your product is relatively cheap. “Impulse buys under $50 tend to do well just because the price point is attractive for the user base,” Sanchez said. 
  • You’re in the beauty or fashion space. Think makeup, skincare, and apparel, Sanchez said. These visual products lend themselves to the instant before-and-after transitions so popular on TikTok.
  • Your product is eco-friendly. “The most positive responses I’ve seen are from sustainable products,” Sanchez said. Everyday products that are less harmful to the environment hold a great deal of appeal. 
  • You want to work with popular creators on the platform. Brands “willing to work with a diverse group of content creators are definitely best utilizing the platform,” Sanchez said. Influencer faces in your ads build brand trust — and TikTok’s Creator Marketplace, currently in beta, can help you find potential partners quickly.

3 signs TikTok ads might not be a fit for you

  • Your audience isn’t on the app. “At the end of the day, your product has to meet that market fit,” Sanchez says. “If you don’t have a product that’s attractive to the TikTok user base, it’s ultimately not a marketing issue but a product issue.” 
  • You don’t have time to reply to comments. Don’t brush users off with a chatbot or auto-replies, Cisneros said. “People can tell.”
  • You’re stressed out by the regulations on how brands can use music. While TikTok partners with some record companies for the use of popular songs, creators don’t have as much freedom as they once did. If you don’t want to stick to the provided options or create original sounds, the platform may not be suited to you.

3 top TikTok ad examples — featuring Lil Nas X and cyber Halloween

What does a successful TikTok campaign look like, exactly? Here are some big wins we’ve spotted on the platform so far.

1. Jadu’s product tutorial, with Holo Nas X.

Type of ad: In-feed video

Key performance stat: The ad ran for about two weeks and reached a 5% click-through rate (CTR), Sally said. (A 1.5-3% CTR that’s more typical for in-feed video ads.)

For the uninitiated, Jadu is an augmented reality app that lets users insert holograms of their favorite entertainers into their videos.

Their buzziest hologram to date? Lil Nas X, wearing bright red angel wings. 

Creators used the hologram, released this spring, to make TikToks where they chatted with Lil Nas X — sometimes in the middle of a badminton game.

To make it ultra-clear that Jadu was the app behind the TikTok trend, though, Jadu launched a paid TikTok campaign to run alongside all the TikTok UGC.

The 15-second in-feed spot walked users how to download the Jadu app and create within it, step by step. (Lil Nas X was the tutorial’s example hologram, of course.)

“The whole process… can seem intimidating,” Sally, Jadu’s COO, told MarketerHire. 

After all, it involves downloading and interacting with holograms. But the ad made the app seem straightforward, and Jadu saw “a huge influx” of interest. 

2. e.l.f’s viral “Eyes. Lips. Face.” challenge. 

Type of ad: Hashtag challenge

Key performance stat: When it ran in 2019, this challenge generated more than a million videos — the most videos of any branded hashtag challenge in history, according to e.l.f.’s agency Movers + Shakers.

This was the first hashtag challenge that really, truly took off. Like, it got earned media.

“The brands finally understand TikTok,” read the headline on Vox’s story about the challenge. 

It started with an original, branded song: “Eyes. Lips. Face.” by iLL Wayno and Holla FyeSixWun. 

The makeup brand commissioned TikTok influencers like Brittany Broski (a.k.a. Kombucha Girl) to lipsync and pose to the song, and the trend took off — so much so that even Lizzo participated, unpaid

3. Mars Wrigley’s campaign to app-ify Halloween. 

Type of ad: TopView and in-feed ads

Key performance stat: The campaign generated 123 million video views across all ad formats and 70,000+ app installs, TikTok reports

Halloween 2020 was an uncertain time for candy brands. The coronavirus made trick or treating a public health concern. Would candy sales flag? 

Mars Wrigley — the parent company behind M&Ms, Twix, 3 Musketeers and more — tackled the issue with a 13-day TikTok campaign leading up to Halloweeen. 

It blended in-feed ads with one day of TopView, all of which encouraged viewers to download Mars’ Halloween app, TREAT TOWN. The app let users trick or treat, play games and give candy credits to each other virtually. 

Source: TikTok

It was a hit! 

Worth noting, though: The branded creative is pictured here, but TikTok reports that TREAT TOWN ads featuring TikTok influencers (as opposed to M&Ms) spurred 169% more installs than purely branded ads. 

Sanchez wasn’t joking — on TikTok, influencer marketing pays.

4 expert tips on making TikTok advertising perform 

1. Manage attribution with third-party tools.

It can be hard to trace users’ full journey to purchase with TikTok’s ads and tracking pixel alone. 

TikTok has historically used same-session attribution, which means it’s easy to track cost per thousand views (CPM) and cost per click (CPC), but hard to capture full customer acquisition cost (CAC), Sanchez said. 

Unless a user sees an ad, swipes up and immediately makes a purchase, TikTok’s pixel may not track that purchase as a conversion — even if it was the first place that a user learned about the product. 

TikTok has released a backend update that allows advertisers to set up multi-session attribution, according to TikTok. 

However, to get an even clearer big-picture view of ROI, and optimize your TikTok ad campaigns accordingly, Sanchez suggests a couple other solutions, too:

  • A dedicated promotional code in your TikTok ads incentivizes users to tell you they saw your ads at purchase.
  • Post-purchase survey tools, like Shopify’s Enquire, help brands get a more holistic sense of all the touch points in the customer journey, Sanchez said. 

2. Expect false disapprovals.

Issues with ad rejections and disapprovals are commonplace on TikTok right now. The platform often rejects ad content based on things like incorrect capitalization.

“Relaunching the creatives in a new ad set can help,” Sanchez said. 

And TikTok isn’t totally unreasonable. In most cases the platform will give you a clear indication of the cause of rejection. 

Still, it’s worth it to build some time into your campaign workflow for glitches. 

3. Make ad creative that feels organic. 

Sanchez and Cisneros agree that advertising on TikTok needs to be a seamless part of the user experience to truly take off. 

In other words: It shouldn’t stand out to someone scrolling through their For You page, and it definitely shouldn’t look like your social media marketing on other platforms. 

It should look like it belongs on TikTok. Just TikTok. 

For one thing, that means your ad creative shouldn’t feel overproduced or scripted. “You don’t want to come off like you just wrote your dialogue and you’re speaking it to the camera,” Cisneros said. 

It should also involve human faces. (Not just M&M faces.) TikTok users, especially the younger demographics who have grown up with social media, want to interact with brands that feel authentic.

“Everyone is tired of seeing a logo,” Cisneros said. “People want to connect with other people.”

"Everyone is tired of seeing a logo. People want to connect with other people."

4. Engage with your community.

All of our experts recommended engaging consistently with your audience. Make your ads informative, and make it easy for prospective customers to collect more information about your product. 

“I recommend that brands have an organic TikTok page for ad viewers to revert to with any questions,” Sanchez says. 

“I recommend that brands have an organic TikTok page for ad viewers to revert to with any questions."

Next step: Check your comments regularly, and actually answer any questions that crop up. 

It’s a win-win, really. Engaging with your community helps you see what’s trending, what’s unclear in your ads, and, more broadly, what your target audience wants.

Bottom line: To win on TikTok, hang out on TikTok

TikTok is an engrossing social media platform that’s already attracted 700 million+ monthly active users

In other words: roughly a tenth of the world’s population opens the TikTok app each month. (And not everyone in the world has a smartphone!) 

That doesn’t make it’s easy for brands to capitalize on TikTok’s moment, though. Success on the platform takes campaign optimization and the right creative touch. 

The only advertising that consistently performs well fits in with the content around it, so someone on your team should probably spend time on the platform as a user, and get a feel for its culture. 

“Familiarize yourself with the organic side of TikTok if you haven’t already,” Sanchez said, “so you can make your creative as native as possible and stay up to date on the latest trends.”

“Familiarize yourself with the organic side of TikTok if you haven’t already, so you can make your creative as native as possible and stay up to date on the latest trends.”

Cisneros agreed. “If you’re not doing that, it’s hopeless,” he said. 

If getting to know a brand new, constantly-changing social app (and its advertising platform!) sounds overwhelming, MarketerHire can help. 

Our pre-vetted paid social media marketers know TikTok inside and out, and we can match you with one within 48 hours. Try us today.

Tor Marom
about the author

Tor Marom is a freelance writer and editor from Los Angeles. When not reporting local news or writing copy for Fortune 500 companies, he's probably playing the keyboard or watching stand-up.

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