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TikTok Bidding Strategy: The Key to Winning The Auction

As TikTok has quickly become one of the most popular social media,  advertisers are flocking to the platform to promote their products and services. However, with so much competition, it can be challenging to make your ads stand out and generate results. That’s where a solid TikTok bidding strategy comes into play. In this article, we’ll dive into everything you need to know about TikTok ad bidding and provide tips and best practices for creating a winning bidding strategy. So, whether you’re a new advertiser on TikTok or a seasoned pro, keep reading to learn how to take your ad campaigns to the next level.

What is TikTok Ads Bid?

TikTok ad bid refers to the amount of money an advertiser is willing to pay to display their advertisement on TikTok. Advertisers can bid on ad space to reach a specific audience on the platform. The higher the bid, the more likely the ad will be shown to the targeted audience. 

How does TikTok ad bidding work?

How does TikTok ad bidding work?
Source: Internet

TikTok ad bidding works on an auction system where multiple advertisers compete for the same ad space, and the highest bidder wins. Advertisers can set a daily or campaign budget and bid on the basis of parameters such as clicks, conversions, and impressions. TikTok’s algorithm considers the ad bid, relevance, and quality to determine which ads to show users.

It’s worth noting that the cost per acquisition is kept under control by bidding. Normally, bidding higher than your competitors will give you a great position in the ad space. In contrast, if your bidding price for each interaction is low, your TikTok ads won’t be competitive enough to display and receive interactions compared to other ads.

However, choosing the bid wisely is essential, or else you will fall into the trap of overbidding and going over budget. Besides, it plays a crucial role in letting TikTok know the target of the advertisement and finding a way to optimize the outcome. 

TikTok ads bidding methods

TikTok ads bidding methods are actually how an advertisement on TikTok is charged. When studying this matter, you will bump into the term Billing event, which refers to the result that triggers the billing process for the advertising campaign. 

Currently, TikTok Ads Manager offers 4 different ad bidding methods, each serving particular objectives. 

  • Cost per Mille (CPM): 
    • Mechanism: pay for every thousand times their ad is displayed. 
    • Formula: (Total cost / Total impressions) * 1,000
    • Billing event: a thousand impressions. 
    • Advertising objective: Reach 
  • Optimized Cost per Mille (oCPM)
    • Mechanism: Pay to generate 1,000 impressions targeted at users who are most likely to convert, become leads, or download an app.
    • Formula: (Total cost / Total impressions) * 1,000
    • Billing event: a thousand impression
    • Advertising objective: Conversions, App Install, Lead Generation, Follows
  • Cost per View (CPV)
    • Mechanism: pay when a viewer watches 6 seconds of your video (or the full length if it’s shorter than 30 seconds) or interacts with the video, whichever comes first. 
    • Formula: Total cost / Total video views
    • Billing event: Charged when a viewer watches 6 seconds of your video or interacts with your video
    • Advertising objective: Video views
  • Cost per Click (CPC)
    • Mechanism: Your bid is the cost you are ready to pay per click. 
    • Formula: Total cost / Total click
    • Billing event: Charged by click
    • Advertising objective: Traffic, App Installs, Conversion, Profile Visits

TikTok bidding strategy

TikTok offers users 3 bidding strategies, including Bid Cap. Cost Cap and Lowest Cost. 

Bid cap

With this strategy, the average cost per result is always below the bid price you’ve established. The system will automatically optimize delivery based on the highest cost per result you are willing to offer.

Bid cap supported advertising objectives include Traffic, Reach, Video Views, App Install, and Conversions. Bidding methods available: Cost per Click (CPC), Cost per Mille (CPM), and Cost per View (CPV)

Cost cap

When applying Cost cap, the cost per result fluctuates around the ads bid. This means the cost per result occasionally rises or falls around the bid amount.

Cost cap is suitable for targeting App Installs, Conversions, and Lead Generation. Regarding payment, the Cost cap billing event is counted by Optimized Cost per Mille (oCPM).

Lowest cost

Unlike the above strategies, Lowest Cost does not require a bid but uses the available ad group budget to provide as many results as possible at the lowest cost. Regardless of how fiercely competitive the auction is, Lowest Cost can always stay within budget.

You should apply this strategy to get Traffic, Reach, Video Views, App Installs, Conversions, Lead Generation, and Catalog Sales. The payment will be calculated according to CPC, CPM, CPV, oCPM.

Remember that only Daily Budget campaigns support the Lowest Cost bidding strategy, not Lifetime Budget campaigns.


  • Choose Bid Cap or Cost Cap as your bid strategy if you need to control your daily cost per result. 
  • Lowest Cost is recommended when you run a Conversions campaign with Conversions as your optimization goal.
  • When your bid strategy is Bid Cap or Cost Cap, your bid should be the same as your target cost-per-acquisition (CPA).

Practice for a successful TikTok bidding strategy

To determine the TikTok ad strategy, you should take your business objective as the base.  Let’s make things more comprehensible. Imagine you are preparing to run advertisements for your fashion shop on TikTok. Your goal is to display your products to as many users on TikTok as possible. 

So Reach is your objective to let the system maximize the number of people interested in your ad. Then, CPM will be your bidding method, which means you will pay for every 1000 impressions of your ad. 

After you have reached your target users, let’s lead them to your website to make a purchase. At this stage, traffic is your priority, so change your bidding method to CPC and spend your budget on every click that redirects to your website.

How to optimize the budget for a successful TikTok ads bid? 

How to optimize the budget for a successful TikTok ads bid? 
Source: TikTok Ads Manager

Normally, the advertisement will go through a Learning Phase when first set up. During the Learning Phase, the system is constantly looking for new customers to help the ad group reach the most appropriate audience. This phase is passed only when at least 50 conversion events occur in a week. That’s why each ad set is advised to be at least 50 times higher than the bid in order to sail through this period. 

Once the ad set passes the learning stage, the system optimizes ad delivery to the users most likely to convert based on your optimization goal, and cost-per-action (CPA) will remain stable.

Tips to get a winning TikTok bid strategy

Start with a reasonable CPA 

You can determine a suitable CPA based on the historical data you have available, i.e. similar ad groups that have passed the learning stage. If you don’t have data available, try creating an ad group using the Lowest Cost bid strategy and run it until you reach at least 50 conversion events. You can then use that result as a benchmark for determining CPA. Or you can also use a Cost Cap with suggested bids.

Increase budget if necessary 

If your daily CPA is consistently lower than your bid, the number of users you attract is not commensurate with the amount of money you are willing to pay. Increase your budget to expand this winning strategy.

Final word

TikTok bidding strategy is critical to achieving success on the platform. With the right strategy, advertisers can win the TikTok ad auction and create impactful campaigns that drive business results. It will be more effective if you can learn how to combine it with a good targeting strategy since they support each other very well. If you want to achieve the best results for your TikTok advertising campaigns but you’re not sure which bidding strategy to use. Then, Mega Digital are here to help! Let us take your TikTok advertising to the next level!

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Xuan Vu
Xuan Vu
Digital Marketing Specialist


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