How much do TikTok Ads cost? Is it worth your investment?

How much do TikTok Ads cost? It is the common question that every newbie always wonders when they first get into the TikTok advertising market. With the CPM (cost per mile) charging mechanism, advertisers will have to pay $10 (or £9) for every 1,000 views. But if you want to run an advertising campaign, the minimum budget will be $500 (or £410).

However, that is only the tip of the iceberg. Advertisers actually cost more than 500 bucks! So, how much do TikTok ads really cost? All the secrets will be revealed in this blog!

What are TikTok ad-buying methods?

It is for sure that there are no bloggers or advertisers who can tell you precisely the number how much TikTok Ads cost. Because TikTok provides multiple ad solutions, and each solution has a different range of prices. Therefore, to know the exact number of each solution, we must understand all the ad-buying methods that TikTok has.

Currently, advertisers can buy TikTok ads with 3 approaches as follows:

  • Bidding
  • Booking
  • Reach & Frequency

Every single buying type matches a different objective. It depends on what your goal is when advertising on TikTok. However, Bidding or CPC is the most common, adaptive, and easy-to-approach method that all sizes of businesses can access to use for their sales campaign or branding campaign.

Let’s dig into the details!

Bidding types

As discussed above, this advertising method is too familiar if you have used Facebook or Google ads. TikTok currently offers 5 bidding ad types: In-Feed, Collection, Dynamic Showcase, TikTok Shopping solutions, and Deeplink to Marketplace.

Unique features of bidding methods:

  • Easy to create on TikTok Ads Manager.
  • Flexible costs, no upfront fees.
  • No need to buy ad space.
  • Suited for conversion efficiency.

Booking types

TikTok offers this booking method due to the limited number of ad placements. Advertisers who want to use these ad formats must book in advance to hold their place. And they cannot automatically run as bidding ad types. This type of ad includes TopView, Branded Effect, and Branded Hashtag Challenge.

Unique features of booking methods:

  • Higher cost than bidding type.
  • Required to book and pay in advance with TikTok partners.
  • Great for increasing awareness and branding.
  • Exclusive ad solutions that only TikTok has.

Reach & Frequency

Reach and Frequency (R&F) allows you to control the reach of your target users and how often your ads are shown based on a fixed budget.

R&F has 2 forms of distribution: Standard and Top Feed, in which Top Feed is an advanced setting form that helps optimize the display position for the standard one.

This form of advertising is often used in combination with other types to maximize the number of people reaching and interacting, increasing brand recognition.

How much are TikTok Ads?

TikTok ads minimum budget should be $500. The costs start at $0.50 per mile, or 1000 views, and $0.02 per click. On Quora, users recommend that you should budget at least $500 for a simple campaign and $50,000 to $100,000 for the bigger ones.

TikTok Ads
Source: TikTok

How much do TikTok ad-bidding types cost?

Bidding advertising costs are estimated based on 4 bidding methods including:

  • ​CPM: Cost per 1,000 impressions
  • oCPM: ​Optimized Cost Per 1,000 Impressions
  • ​CPV: Cost per 1,000 views
  • ​CPC: Cost Per Click

Depending on each form of advertising, the cost will be different. For instance, on TikTok Ads Manager, the minimum cost of In-Feed advertising per day is $20.

What is the cost of 1000 impressions (CPM)?

For every 1,000 CPM, the minimum price is $10.

CPM (Cost Per Mille/Cost per Thousand Impressions) is a price you’re willing to pay for 1,000 impressions. From there, TikTok will deliver your ad to get the most impressions and reach as many customers as possible within your budget.

How to calculate cost per view (CPV) on TikTok?

If a Youtube ad spends $10,000 – $30,000 to reach 100,000 viewers, then TikTok allows you to set a maximum CPV bid for 1,000 with a 6-second or 2-second video view. You can simply choose your own spend per view on TikTok.

CPV (Cost Per View) is the bid you are willing to pay for every 1,000 video views within 2 or 6 seconds till the end of the video. The system will deliver the video to the maximum number of viewers within your budget.

What is the cost per click (CPC)?

The average cost per click on TikTok is about $1.

CPC (Cost Per Click) means the cost you are willing to pay per click. The system will deliver your ad to users who are most likely to click on the link in the ad at the closest cost to your bid.

How to calculate the cost of ​optimized cost per 1,000 impressions (oCPM)?

oCPM (Optimized Cost per Mille) bid represents the price you’re willing to pay to generate 1,000 impressions (similar to CPM). However, the system will target users who are likely to convert, become leads, or are following similar products.

oCPM is currently the default bidding method for the “Conversions” or “App Installs” ad objective.

How much do TikTok ad-booking types cost?

Top View

Top View is a form of advertising video that is displayed as soon as the user opens the application. This is the most advanced type of advertising on TikTok with a full display time in 1 day, helping to attract millions of views, and delivering high engagement and brand recognition. Advertisers must spend $65,000 each day for 7.4 million Top View Ad impressions.

Branded Effect

Branded Effect uses stickers, filters, and motion effects to highlight products, campaigns,s and brand names. Users can create their own content with brand effects in the filter list of the TikTok video recorder. To be able to advertise with Branded Effect, the cost you need to spend is around $45,000 for 30 days.

Branded Hashtag Challenge

Branded Hashtag Challenge is a type of ad where a brand creates a featured hashtag and encourages users to attach them to a video with a related topic. It allows advertisers to build custom dance or comedy challenges with a hashtag that acts as a call to action for users to create their own versions over the course of six days.

Unsurprisingly, this is one of TikTok’s more expensive ad formats. However, sponsors receive numerous benefits such as official music to accompany the hashtag and specific content protection to prevent videos from being restricted from the challenge. The booking price for Branded Hashtag Challenge is around $130,000 to $160,000.

How much does Reach & Frequency cost?

With R&F, advertisers can control how many people reach their ads and how often they are shown at a fixed price. After collecting information about the audience, purpose, and budget, the system will give an estimate for the following indicators: the number of ad objects reached, and the number of ads displayed and delivered at the average cost per 1,000 impressions (CPM).

Therefore, the cost of an R&F advertising campaign can be flexible and determined according to the needs of each advertiser.

Compare TikTok Ads cost with other platforms

It’s difficult to make a comparison of social ad platform costs because there are so many variables. But when it comes to CPCs and CPMS, TikTok is quite comparable to Facebook and Instagram.

A single TikTok Ads cost may range from $50,000 to $120,000, depending on the type of ad you choose.

Compare TikTok Ads cost with other platforms
Source: Quora

What is the average CPM for TikTok Ads?

TikTok employs CPM as its measurement metric, unlike other platforms such as Facebook and Instagram, which use CPC (Cost Per Click). It signifies that the cost of the advertisement is determined per 1000 views. 

TikTok commercials have an average CPM of $10

  • Charged by impressions
  • Target to increase reach

What is the average CPC for TikTok Ads?

Although TikTok commercials are new to the advertising world, they have shown to be effective for digital marketers. TikTok advertisements have an average CPC of around $1.00, depending on bidding – not the most cost-effective campaign, but a promising one.

  • Charged by click
  • Target to increase traffic, installation, conversion, and community interaction.

>>> Read more: TikTok Ads vs Facebook Ads: Which is the best for your brands?

How To Optimize Your Budget for TikTok Ads

TikTok’s auction ads system will optimize its algorithm to keep your spending under your daily budget limit or utilize cost per result, depending on the bidding approach you choose. However, you must remember that TikTok ad space between you and your competitors will be decided in this period.

  • Bid cap: This is the particular bid amount you’re willing to pay per optimization target (click, conversions, impressions, views, etc.). Using this method, your daily budget will fluctuate depending on how much your rival bids. If your competition outbids you, your money may not be used up. This also implies your ad will not perform effectively.
  • Cost cap: The cost per result ranges between lower and higher than the bid amount with this option. This strategy serves the following advertising goals: app installs, conversions, and lead generation.
  • Lowest cap: This technique takes into account your everyday budget. The ad system automatically adapts to maximize the number of conversions based on the budget, while the budget is always spent at the end of the day/campaign. Therefore, this ad model is built for traffic, reach, views, app installs, conversions, lead generation, and catalog sales. 

Effective TikTok Ads with brands

TikTok has already established an amazing track record of providing solid results for advertising across a wide range of sectors.

Synth Labs Intl.

This skincare brand conducted a Spark Ads campaign to generate 300,000 impressions at $0.32 CPC. Spark Ads was were a perfect fit for Synth Labs Intl which already had experience producing organic creative material on the platform. Spark Ads are a native ad type that allows marketers to boost their own organic videos or popular artists’ videos as In-Feed Ads.

The campaign doubled the brand’s organic following, raised profile likes by 80%, and total video views surpassed 100,000.

G2A

G2A, an online gaming marketplace, achieved 12 million impressions with video advertisements at $0.16 CPM and $0.06 CPC.

The company met its marketing objectives by purchasing In-Feed Ads through TikTok Ads Manager’s auction approach. G2A and TikTok collaborated to produce an excellent campaign that not only raised awareness but also attracted new clients to the G2A marketplace. It eventually reached over 2.2 million users and received approximately 12 million impressions.

Wet n Wild

The Big Poppa campaign by Wet n Wild was a success. A combination of a Branded Hashtag Challenge #BiggerisBetter, TopView, One Day Max, and In-Feed Ads generated significant awareness. Overall, this campaign created a total of more than 1.5 million video users, resulting in 2.6 billion total views and a phenomenal 18.6 percent average engagement rate.

Wet n Wild
Source: TikTok

Are TikTok Ads worth your investment?

The answer is yes. 

Smaller e-commerce businesses are seeing positive results from TikTok advertising, and marketing opportunities on the network are expanding. -Affordable standard feed advertising means that smaller firms can begin experimenting with video ads and gradually expand their lifetime budget as performance data becomes available.

Once you acquire confidence in the outcomes TikTok is giving, you can increase your spending and even invest in bespoke solutions if your ROAS justifies it. Therefore, reaching a responsive audience on a developing platform is a solid investment for any e-commerce business, and advertisers can easily take a gradual and steady approach.

As a TikTok Marketing Partner, Mega Digital is proud to say that we comprehend TikTok’s algorithm so we can apply it to help brands and businesses build a viral TikTok channel from zero or execute and optimize their TikTok Ads Campaign. If you are struggling with the TikTok platform, please contact us. We will solve your problem immediately!

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