According to reports from Reuters, global ad spending is expected to grow by about 9 percent in 2022. This means more marketers and advertisers will be expanding their ad spend, but on which platforms?
From viral challenges to being crowned the most downloaded app of the year, 2021 was a breakthrough year for TikTok. As a result, many businesses are considering leveraging this video-centric social media platform to refine their digital advertising strategy and better reach their audience.
Continue reading to learn all the signs that indicate TikTok ads will soon take over the advertising world by storm.
About Advertising on TikTok
TikTok has been rapidly rising in popularity. Since it is a relatively new platform, several of your competitors still don’t know how to advertise on TikTok. This alone can provide your business with a great advantage. TikTok receives over 1 billion active members monthly and it is filled with a young and highly engaged audience that relies on the innovation of the app to express themselves in a fun and creative way.
Below are critical statistics from HubSpot that marketers and advertisers should know about advertising on TikTok:
- There are over 120,768,500 TikTok users in the United States
- Around 43 percent of TikTok users are aged 18-24
- TikTok has over 1 billion monthly users worldwide
What are TikTok Ads?
TikTok Ads are advertisements that are displayed to users on the TikTok app. Whether it’s designed to generate more traffic or increase engagement, these ads typically fulfill a goal of a brand.
There are six different types of TikTok ads:
1. Branded Effects
Branded effects are less like ads and more like branded material advertisers can use to boost brand awareness on social media. These TikTok ad tools generally come in the form of a virtual sticker, or filter. Branded effects help bring brand campaigns to life beyond the traditional digital advertisement.
2. Branded Hashtag Challenge Ads
Branded hashtag challenge ads are digital advertisements brands create to promote a branded hashtag challenge. These TikTok ads can appear in three different formats:
- Standard video ads that appear in-feed are one form of branded hashtag challenge ads. These are designed to boost engagement.
- A featured banner ad on the Discover page is another form of a branded hashtag challenge format. These direct more users to the branded challenge page and are designed to boost traffic.
- The branded hashtag page itself is another example of a branded hashtag challenge format. This page displays videos from all of the users on TikTok that participated in the challenge and included the music and hashtag in their posts.
According to BetterMarketing, over 35 percent of TikTok’s user base will eventually participate in a hashtag challenge. This is largely due to its viral capabilities and the visibility it offers.
For example, when Cheetos debuted their branded hashtag challenge, #ItWasntMe Challenge in 2021, a combination of incorporating a catchy song, targeting the right audience, and choosing the right platform helped it become one of the highest viewed TikTok branded hashtag challenges with over 14.2 billion reviews received today. The challenge enabled users to add “It Wasn’t Me”, a 90s classic by Shaggy as their background track while playing out scenarios of Cheetos thievery and lack of accountability.
The more #ItWasntMe videos TikTokers uploaded, the more visibility it provided to the Cheetos brand.
3. Brand Takeover Ads
Brand takeover ads can be a 3-5 second video or a 3-second image that appears the moment a user opens the app. TikTok users will only be shown one of these ad types per day. They are best to use when a brand wants to stand out from competitors and direct more users to its Hashtag Challenge or landing page.
4. In-Feed Ads
In-feed ads are TikTok videos that can be up to 60 seconds long and they appear as a user scrolls through their For You Page (FYP). When a user comes in contact with these ads, they can skip the ad or maximize it to full screen. These types of ads can also be used to fulfill many different business objectives. One of the best features marketers and advertisers love about in-feed ads is that a call-to-action (CTA) button can be included. This can be linked to a company landing page or another destination of your choice.
5. Influencer Collaborations
Influencer collaborations are one of the ad types that help put TikTok on the map. These sponsored ads allow businesses to collaborate with well-known influencers to boost awareness for their brand. An influencer collaboration on TikTok can be anything from promotion, a recommendation, or a review.
6. TopView Ads
TopView ads consist of videos that are 60 seconds long, typically include sound, and they occupy the entire screen of a user’s device. Like in-feed ads, TopView advertisements can also include a call-to-action (CTA) button.
Why TikTok Ads?
With TikTok ads, reaching your target audience where they are has never been easier. TikTok is responsible for helping several brands leverage the power of user participation to grow their brand. As other social media platforms struggle to keep up with the times, TikTok has experienced consistent growth, putting on the radar of marketing and advertisers in search of the next best advertising platform.
Below are some of the most common reasons businesses are now considering TikTok:
Facebook is on the Decline
In 2021, Facebook, the most popular social media platform nationwide, experienced its fair share of challenges. In October of 2021, the social media giant experienced a 6-hour outage on its platforms–Facebook, Instagram, and WhatsApp–causing it to lose almost $100 million in advertising revenue. But once the company announced its rebrand to Meta, it triggered its trustworthy score on the Harris Brand Platform to drop from 16 percent to 6.2 percent.
While Gen Z is TikTok’s largest and most engaged demographic, Facebook’s young audience is on the decline. According to The Verge, Facebook’s young users in the United States have decreased by 13 percent in the past two years. This is a sign that Facebook is losing its edge and the younger demographic, who are also responsible for catapulting many of our digital trends today, are spending their time elsewhere.
It’s Rapidly Increasing in Popularity
According to an end-of-year report by Cloudfire, Google has officially been dethroned by TikTok as the number one spot in its list of the most popular domains.
A report by Kantar ranked TikTok the number one platform for global ad equity. Ad equity measures the value advertising has to its end users. The platforms that followed were Amazon, Instagram, Google, and Twitter.
Audience Engagement is High
Since TikTok is fueled by user-generated content, its audience is already highly engaged. According to Influencer Marketing Hub, engagement rates on TikTok can range from 3 percent – 9 percent. Its engagement rate is higher than rival platforms, Facebook and Instagram.
Not to mention, many marketers and advertisers are gravitating to TikTok due to its ability to increase a company’s chances of going viral. Several brands have leveraged the platform and its very active user base to expand their business. Who knows, maybe your company will be the next big thing to come out of the platform.
How much do TikTok ads cost?
Are you curious to know how much TikTok ads cost? TikTok ads operate based on a bidding model that enables marketers and advertisers to manage all costs through daily and lifetime budgets.
In-feed ads, or TikTok native ads, are $10 per CPM (cost per mille or cost per 1,000 impressions) and there are two ways to bid:
- Cost per view (CPV) – The cost per view is calculated as $10 per 1,000 views
- Cost per click (CPC) – The cost per click charges can range from $0.02 – $1 per click
In addition, the platform also requires marketers and advertisers to spend at least $500 on a campaign.
While experts recommend a budget of at least $1,000 for your native TikTok ads, other forms of TikTok ads can be much pricier.
According to research conducted by Influencer Marketing Hub:
A branded hashtag challenge requires a flat fee of $150,000 for 6 days. In addition, they allow a brand to put down additional funding that can be allocated towards promoting the challenge.
Experts estimate the average hashtag challenge promotion budget to be around $100,000 – $200,000.
Brand takeover ads can typically cost a business around $50,000 – $100,000.
Are You Considering TikTok Ads for Your Business?
If you are looking to target more Gen Z’ers between the ages of 18-24, then TikTok ads would be a great platform to consider incorporating into your digital advertising strategy.
Its call-to-action feature allows marketers and advertisers to direct traffic to a landing page, a different account, or an app download. Secondly, its engagement rate is astronomical and it has only been continuing to grow. Lastly, TikTok ads are available in an array of price points ranging from $0.02 – $200,000. This provides businesses with a variety of options to choose from and allows all businesses–no matter the budget–to experience the power of TikTok ads.
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