When you first get started with TikTok advertising, it may be confusing that among dozens of TikTok ad formats, some allow you to set up on your own while others do not. This is strictly related to the two ad distribution mechanisms on TikTok: TikTok Auction vs Reservation Ads. Let Mega Digital help you fully understand the difference between them.
QUICK SUMMARY
- Explains how TikTok Auction Ads work, their formats (In-Feed, Spark, Search, Video Shopping), and why they suit performance-focused, flexible, self-service advertisers.
- Breaks down Reservation Ads, including TopView, Brand Takeover, Top-Feed, Branded Effects, and Branded Hashtag Challenges—premium placements with guaranteed reach.
- Compares Auction vs Reservation across cost model, visibility, optimization, targeting, control, and ideal use cases.
- Provides clear guidance on when brands should choose Auction versus Reservation
What is TikTok auction ads?
TikTok Auction ads operate in a way quite similar to an auction when advertisers must compete with each other by bidding to get an ad placement. TikTok will consider a lot of factors, such as the bid offered, the quality of the video content, the conversion rate of the landing page,… to distribute ads on TikTok.
TikTok Auction ads give advertisers the freedom to create, run and optimize their campaigns from creating to running and optimizing the ads. Therefore, it is more suitable for professional advertisers who have experience in running TikTok ads.
TikTok Auction Ad Formats
In-Feed Ads
In-feed ads are the only TikTok ad format that follows the TikTok auction ads mechanism. With in-feed ads, advertisers can actively choose between different objectives that align with their campaign like:
- Awareness – Build brand identity.
- Consideration – Build interest in a specific goal.
- Conversion – Cause a conversion action on the website/landing page.
- Catalog Sales – Boost sales on TikTok Shop.
Spark Ads
TikTok has published Spark ads, a variant of In-feed ads which allows users to advertise UGC content in other channels. In this way, brands can identify which organic content uploaded by TikTokers suits their campaign and contact the creators to change it for commercial purposes. The ad type is very promising since it doesn’t make audiences feel like they are watching ads.
Search Ads
As TikTok expands into search-driven behaviors, Search Ads appear in the search results for relevant keywords. These operate entirely on the Auction system and are effective for high-intent audiences.
Video Shopping Ads
For eCommerce businesses, Video Shopping Ads integrate directly with TikTok Shop and also operate through the Auction system. They are built to drive product conversions at scale.
What is TikTok Reservation Ads?
TikTok Reservation Ads are premium, pre-booked ad placements that guarantee your brand fixed visibility in TikTok’s most high-impact inventory. Unlike Auction Ads, these formats are purchased through TikTok or an official TikTok Partner and offer predictable reach, premium placement, and strong top-funnel impact.
TikTok Reservations Ad Formats
Below are the major Reservation-based formats supported today, including updates not present in older content:
TopView Ads
TopView Ads uses short video content under 60 seconds and in a vertical frame, displayed when a user has just opened the TikTok application. It is often adopted by brands, businesses, and advertising agencies to increase brand exposure and convey messages to customers better. TopView ads also help pull traffic to the website, landing pages, reach, and web views,… to continue to pursue and remarket with other ad formats.
Branded Hashtag Challenge
Branded Hashtag Challenge is a form of TikTok advertising by creating a trend with a certain topic and attaching a hashtag (#). Brands can work with TikTok’s marketing team to create their hashtag. TikTok also allows challenge banners to appear in the TikTok Discover section (Discover page banner) and motivates TikTok users to create content to push that hashtag trend.
Branded Effects
TikTok Branded Effects is an ad format unlocks brands’ creative potential using specially designed stickers, filters, and 2D, 3D, and AR effects. It helps brands connect seamlessly with their users’ most memorable moments.
Top-Feed Ads
Top-Feed ads are the first In-feed ads that appear to the audience. Top-Feed is the only one that applies the reservation mechanism among many types of In-Feed ads. It is often used when advertisers want to make a memorable and long-lasting impact, acquire additional levels of campaign control, or utilize R&F’s capacity to tailor the frequency and enhance reach.
Brand Takeover
A highly impactful format that displays a static or animated full-screen asset when the app opens. Brand Takeover is frequently paired with Hashtag Challenges for maximum visibility.
TikTok Auction vs Reservation Ads: Key Differences
Auction vs reservation ads TikTok can be different in a few aspects, of which the 3 most outstanding are application, optimization, and price.
Application
Auction Ads
- All advertisers can access and set up campaigns directly inside TikTok Ads Manager.
- Full self-service workflow: create → optimize → scale.
Reservation Ads
- Cannot be set up through Ads Manager.
- Must be booked through TikTok or certified TikTok Partners.
- Brands still manage creative assets and campaign coordination, but placement is controlled by TikTok.
Optimization
Auction Ads
- Full ability to optimize toward conversions, CPA, ROAS, traffic, video views, app installs, catalog sales, etc.
- Bid strategies like Lowest Cost, Bid Cap, and Cost Cap.
- Continuous optimization based on TikTok Analytics, allowing real-time adjustments.
Reservation Ads
- Optimization is minimal since placements and impressions are guaranteed.
- Focus is on reach, frequency, and impact—not conversion efficiency.
- Creative must be finalized early, limiting rapid iteration.
Price & Visibility
Auction Ads
- Costs vary based on competition, audience, and performance.
- No minimum budget requirement.
- Visibility is performance-driven: stronger creatives win more auctions.
Reservation Ads
- Premium, fixed-cost formats priced significantly higher.
- Often ranges from $20,000–$50,000+ per campaign depending on the market.
- Guaranteed top-tier placements (TopView, Top-Feed, BHCT, etc.), offering maximum exposure.
Control Level
Auction Ads
- High control: targeting, budget pacing, bid strategy, optimization windows, creative testing.
- Advertisers can make changes anytime.
Reservation Ads
- Lower control: reach and placement are predetermined.
- Limited ability to optimize after launch due to TikTok’s placement guarantee.
Cost Model
Auction Ads
- Performance-based (CPM/CPC/CPA varies by demand and quality).
- Advertisers only pay for results or impressions delivered.
Reservation Ads
- Fixed price or guaranteed CPM.
- Pricing is determined upfront and does not fluctuate.
Targeting Flexibility
Auction Ads
Full targeting suite available:
- Interest
- Behavioral
- Custom audiences
- Lookalike audiences
- Placement selection
- Device/OS targeting
Reservation Ads
- Broad delivery with limited targeting control.
- Designed to maximize reach, not micro-targeting.
Creative Requirements
Auction Ads
- Flexible creative guidelines.
- Easy to test new variations or UGC-style content.
- Spark Ads leverage organic TikTok posts.
Reservation Ads
- Requires polished, high-quality brand assets.
- Ad creatives undergo TikTok approval and stricter brand safety reviews.
- Designed for immersive impact across premium placements.
Use-Case Differences
Auction Ads are best for:
- SMEs and performance advertisers
- eCommerce and conversion-driven campaigns
- Testing new creatives
- Scaling gradually with lower budgets
- Always-on campaigns
Reservation Ads are best for:
- Big brands with strong branding goals
- Product launches
- Seasonal or event-based campaigns
- Viral challenges (BHCT)
- Maximum top-of-funnel reach
Quick Comparison Table
| Criteria | Auction Ads | Reservation Ads |
|---|---|---|
| Application | Anyone can set up via Ads Manager | Must book via TikTok or partners |
| Buying Method | Real-time bidding | Pre-purchased premium placement |
| Cost Model | Variable CPM/CPA | Fixed cost / guaranteed CPM |
| Visibility | Performance-based | Guaranteed top-tier visibility |
| Control Level | High (bidding, targeting, creative) | Moderate (limited optimization) |
| Targeting Flexibility | Full suite of targeting options | Broad targeting only |
| Creative Requirements | Flexible, UGC-friendly | High-quality, approved assets |
| Optimization | Strong conversion optimization | Reach-focused, limited changes |
| Best for | SMEs, eCommerce, performance campaigns | Brand awareness & large-scale launches |
| Placement Types | In-Feed, Spark, Search, Shopping | TopView, Top-Feed, BHCT, Effects, Takeover |
When Should You Use Auction vs Reservation Ads?
| Objective | Choose | Why |
|---|---|---|
| Conversions / CPA / ROAS | Auction | Flexible, performance-optimized |
| Product launch / Brand impact | Reservation | Guaranteed reach, premium visibility |
| SMEs / Lower budgets | Auction | No minimum spend, scalable |
| Viral challenges | Reservation (BHCT) | Highest user participation |
| Retargeting / Scaling | Auction | Strong targeting & creative flexibility |
FAQs
Neither is universally “better” — it depends on your goals.
– Auction Ads are better for performance, testing, conversions, and scalable budgets.
– Reservation Ads are better for guaranteed reach, premium visibility, and major brand launches.
Most advertisers start with Auction Ads, then use Reservation formats when they need maximum exposure.
Yes. Auction Ads are designed for performance objectives such as:
– Website conversions
– TikTok Shop sales
– Leads & app installs
– ROAS- or CPA-based optimization
They offer full control over targeting, creative testing, and bidding — making them the best choice for conversion-focused strategies.
Reservation Ads can be worth the investment if your goal is brand impact. They guarantee premium visibility (TopView, Top-Feed, BHCT, Branded Effects) and deliver fast, large-scale awareness that Auction Ads cannot match.
They’re ideal for product launches, seasonal events, and big-brand campaigns — but not necessary for small, performance-only budgets.
Yes. Reservation Ads cannot be set up through TikTok Ads Manager.
You must book them through TikTok or an official TikTok Partner, who will help you secure placement, manage creative approvals, and coordinate launch timelines.
Final Word
In a nutshell, if you are an individual or small enterprise who first entering the market, let’s focus on Auction ads. If you are a big and medium brand finding a solution to spread your identity, Reservation ads are effective options. Download our Ebook to learn more about all TikTok ad formats to better consider which one to choose.
![[Ebook] Explore 11 TikTok Ad Types for growing rocket](https://megadigital.ai/wp-content/uploads/2023/04/ebook-tiktok-ad-types.png)
