How do TikTok ads work?

TikTok has taken the social media world by storm, with over 1 billion active users worldwide. For businesses looking to tap into this massive audience, TikTok’s advertising platform offers considerable potential. But how exactly do these ads work, and is this form of social marketing worth investing in? Let’s dive into the mechanics of TikTok advertising.

How does the TikTok algorithm work?

At the heart of TikTok’s success is its powerful algorithm. Unlike other platforms that rely heavily on follows, TikTok’s algorithm primarily focuses on user engagement and content relevance.

The algorithm analyses multiple factors to determine which content to show users:

• Watch time (how long users view a video)
• Interactions (likes, comments, shares)
• Account follows
• Content details (hashtags, sounds, captions)
• Device and account settings.

For advertisers, understanding this algorithm is crucial. When your ad resonates with viewers – generating longer watch times and meaningful interactions – the algorithm rewards it with greater reach. This creates a virtuous cycle where engaging content receives more exposure.

TikTok’s algorithm also considers the video completion rate. If users consistently watch your ads all the way through, the platform recognises this as valuable content and increases its distribution. This makes creating compelling, short-form content particularly important for advertising success.

How to run TikTok ads

Getting started with TikTok ads is straightforward, but requires strategic planning:

First, you’ll need to create a TikTok Ads Manager account. This platform allows you to manage campaigns, create ad groups, and track performance.

When setting up your campaign, you’ll choose an objective that aligns with your marketing goals – whether that’s brand awareness, traffic generation, or conversions. Each objective optimises your ads differently.

Next, you’ll define your target audience. TikTok offers robust targeting options including demographics, interests, behaviours, and even custom audiences based on your existing customer data.

For the ad creative itself, TikTok offers several formats:

• In-feed ads that appear in users’ ‘For You’ feeds
• TopView ads that display when users first open the app
• Branded Hashtag Challenges that encourage user participation
• Branded Effects that users can incorporate into their own videos.

The most successful TikTok ads don’t feel like traditional advertisements. They blend seamlessly with organic content, capitalising on trends and the platform’s unique style. Authenticity is key – overly polished, corporate-looking content often performs poorly compared to more genuine, native-looking videos.

How much do TikTok ads cost?

TikTok advertising costs can vary significantly based on several factors. The platform operates on an auction system, where advertisers compete for ad placements.

At minimum, you’ll need a budget of around £50 per day for standard campaigns. For more specialised formats like Branded Hashtag Challenges, costs can start from £5,000 and reach upwards of £50,000 for larger campaigns.

The cost per thousand impressions (CPM) on TikTok typically ranges from £6 to £10 in the UK market, though this varies by industry and targeting specifics. Cost per click (CPC) generally falls between £0.50 and £2.00.

Several factors influence these costs:

• Competition within your target market
• Audience targeting specificity
• Seasonality and peak advertising periods
• Ad quality and relevance score.

It’s worth noting that TikTok’s ad costs tend to be higher than some other social platforms, reflecting its highly engaged user base and premium positioning. However, the platform often delivers stronger engagement metrics, potentially offering better value for money despite the higher initial investment.

Are TikTok ads worth it?

With higher costs than some other platforms, businesses naturally question whether TikTok ads deliver sufficient returns. The answer largely depends on your specific business goals and target audience.

TikTok’s user base is predominantly younger people, with a significant proportion under 30. If your products or services target this demographic, TikTok offers unparalleled access to this audience. The platform’s engagement rates are notably higher than other social networks, with users spending an average of 95 minutes per day on the app.

For brand awareness objectives, TikTok excels. Its format naturally encourages content sharing and viral potential, helping businesses reach audiences beyond their direct targeting. Many brands have seen substantial organic growth from well-executed TikTok campaigns.

When it comes to direct response and conversion-focused campaigns, results can be mixed. While TikTok has improved its attribution models and conversion tracking, it typically performs better for upper-funnel marketing objectives than immediate conversions.

The platform works particularly well for visually appealing products, services with strong emotional appeal, or offerings that benefit from demonstration. Brands in fashion, beauty, food, fitness, and entertainment tend to see strong results.

Finally, it’s important to consider the creative resources required. Effective TikTok advertising demands frequent content creation and trend monitoring. If your team can’t commit to this ongoing effort, you might struggle to achieve optimal results.

For many businesses, especially those targeting younger consumers, TikTok ads can deliver exceptional value despite the higher costs. The key is approaching the platform with appropriate expectations and a willingness to adapt to its unique creative requirements.

At Click Consult, we help businesses navigate the TikTok advertising landscape, developing strategies that align with your specific goals and audience. If you’re considering TikTok as part of your digital marketing mix, we’d be happy to discuss how we can help maximise your return on investment.