TikTok Ads: How much does an advertising campaign cost?

Prior to the end of 2018, the social network TikTok had not implemented a formal advertising program. Because of this, brands had to use other methods to advertise on TikTok.

It is therefore only in 2019, that the platform unveiled its advertising tool: TikTok For Business . The latter provides brands and advertisers with several marketing solutions. At that time, the cost of a broadcast for an advertising campaign on TikTok was very high, and companies still had many questions about the budgets to optimize their ads. 

However, now that the platform has introduced short native video ads, advertising on TikTok has become significantly more affordable. 

TikTok ads are even a big hit with users. In fact, 91% of Generation Z prefer video ads to traditional advertising formats. This makes TikTok a great acquisition channel for any brand that wants to reach this target. If you're considering using it, here are our tips for estimating the cost of a TikTok ads campaign. 

The cost of a TikTok advertising campaign

The cost of an advertising campaign on TikTok, just like any other type of advertising campaign, will depend on two main envelopes:

• A creative envelope, intended to pay for the video advertising content that will be used for the campaign.
• A media envelope, intended for the media coverage of the advertising content.

In the case of television, for example, the creative envelope will allow the production of the TV video spot. The media envelope will correspond to the remuneration of the advertising agencies that will allow the spot to be broadcast on TV channels.

This logic also applies to a TikTok Ads campaign.

The creative cost of an advertisement

On TikTok, brands have the advantage of having a lot of flexibility in their creative envelope to create video advertising content.

Creative content can be produced cheaply in-house, with just an iPhone. Brands can alsopartner with TikTok content creators for a few hundred euros.

However, it is necessary that the brand has a good understanding of TikTok, the formats and the tone to adopt. An ad that doesn't use TikTok's codes has little chance of performing.

If the content is bad, it is really the whole campaign that risks failing. Because 80% of advertising performance on TikTok comes from the relevance of the creations.

Creative agencies, such as Sleeq, can intervene to help brands produce relevant creative content, and enable the campaign to achieve its performance objectives. The price of creative agencies varies greatly, but on average it is several thousand euros for the production of several pieces of creative content as well as all the strategic thinking around their performance.

No matter what, a Tiktok ad represents a certain cost. For a good return on investment, you should not neglect this creative part: the ad should look like a native TikTok video.

The media cost of an advertisement

As for the media envelope, it will greatly depend on the product and the audience targeted by the brand.

As with all digital media buying platforms, TikTok Ads sells advertising space to advertisers on a CPM (cost per thousand impressions) basis. This CPM depends on the objective of the campaign, and the size of the targeted audience.

It ranges from 0.7 for reach campaigns, on a large audience, to more than 4€ for conversion campaigns on a very specific audience.

If a product is cheap, for example 10€, the TikTok budget will be lower, because it will be easier to generate a sale than for a 200€ product.

🤔 But what budget should you budget for your ads on TikTok?

TikTok's recommendations are to plan a daily budget of 50x your target CPA (cost per action). This means that for our product worth €10 and a campaign whose objective is to generate a purchase of at least €10 (and therefore break even), we will have to invest €500 per day.

If we follow the same reasoning for a product at 200 € and a CPA of at least 200 €, the budget of the advertising campaign on TikTok will be 10k€/day (which can be difficult to maintain in the long term).

At Sleeq, we recommend TikTok Ads budgets of around 10k€ per month for a first launch. This will enable you to achieve your e-commerce objectives without taking too many risks and committing large sums of money.

What advertising strategy on TikTok?

Once you have a general idea of the budget breakdown and orders of magnitude, you will need to think about the TikTok advertising strategy to be put in place.

There are two main ways to launch an advertising campaign on TikTok:

• A campaign with creations made in studio.
• A campaign in collaboration with designers.

Within the framework of an advertising operation with studio creations, the videos are produced either by the advertiser internally or in collaboration with an agency (without influence). Afterwards, they can be directly imported on TikTok Ads in order to launch the advertisement on the platform.

Within the framework of a campaign in collaboration with content creators, the videos are directly produced by them . The advertiser or its agency will choose influencers who will produce a video to be broadcast on their account.

These videos will then be sponsored on TikTok Ads to boost their reach, refine their targeting and redirect engaged users to the brand's website via a call to action (CTA).

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Create ads that convert

If you want to be able to measure the immediate ROI of your campaign, ads with a conversion goal are the best option.

Generally, this type of operation is favored by brands that want to generate downloads of their application, purchases on their e-commerce site or registrations on a landing page. The video must be very persuasive, because the goal is not to "entertain" (which is usually the objective of a classic TikTok video). 

The creative challenge is therefore all the more important, but the conversion campaigns allow you to directly measure the profitability of your TikTok advertising.

To optimize video ads and ensure maximum conversion, there are several things to put into the video:

• Capture attention from the first few seconds.
• Point out a problem.
• Provide a solution.
• Put a relevant call to action.

This video structure significantly increases your conversion rate and thus the immediate profitability of your TikTok advertising. Your objective is to accompany TikTok users to the desired action without them feeling that it is a commercial transaction. Your marketing strategy must be as subtle as possible so as not to increase the natural mistrust that TikTok users have towards video ads.

Beyond the content of the video, it is also important to know the different ad formats available on TikTok. Each one has its own characteristics that will impact your performance. The idea is to choose the right format for your advertising campaigns according to your objectives.

Master TikTok ads

As you can see, there are many elements that can impact the performance of your TikTok ads. Influencers are not necessarily a miracle solution. What is important is to have a good strategy, consistent with your objectives. Be inspired, for example, by the many brands that have used TikTok to their advantage and set up successful campaigns.

All brands have their place on TikTok and the possibility to perform with TikTok ads. But as for organic content, it is essential to master the culture of the platform and its codes, even before mastering TikTok for Business. 

If you want to launch your first TikTok Ads campaign, don't hesitate to be accompanied by an agency. Our team will be happy to put its expertise at your service.