How does TikTok advertising work? (2024)

TikTok is the most recent social media platform to experience exponential growth and as with all other social media platforms, offering advertising solutions to brands will be their main source of revenue. The advertising potential is growing quickly with the recent introduction of TikTok for Business to streamline the process. Here’s all you need to know about how your business can get started…

How does TikTok advertising work? (3)

TikTok for Business

This is a newly launched venture for TikTok, who is growing its advertising potential. Unlike other social media platforms, the idea is not to make ads, but TikTok’s. This philosophy is one that is in line with the expectation of Gen Z’s who want to see content that has an authentic feel and matches the platform's lightheartedness.

Under the label TikTok For Business, brands will be encouraged to join the platform and make use of one of their 4 types of ads. With this comes the opportunity for discovery and connection with newer audiences. The app is formalising its advertising with brands so that the process is straightforward for marketers to follow. With these changes, the app is still heavily centred on the user experience, which is important for brands to keep in mind - creativity is required for your campaigns.

With these advertising opportunities, businesses can become part of pop culture and advertise through storytelling as a means of reaching the youth and growing their digital marketing on the growing digital platform. During its rise, advertising has been limited on the platform, but that is now changing.

Content on TikTok can be created with mini stories and share tidbits of relevant content with your audience. An example of this would be Seventeen magazine. They have garnered a large following and share sneak peaks of the magazine, tutorials and reposts of some of their favourite clips from their followers.

How does TikTok advertising work? (4)

TikTok Advertising

The TikTok platform is used mainly by younger audiences (between sixteen and twenty four year olds), though it is also rising in popularity with other generations who are exploring the app and finding entertaining content. It is available in over one hundred and fifty markets, in more than seventy languages.

There are options available to marketers, from hashtag challenges to working with influencers. The content heavily circulated on the platform includes quick and easy to make video clips with low production costs, offering a more ‘real’ perspective when compared to other more visually refined platforms.

Even if your brand seems a little off centre when considering the above, it is noteworthy to mention that several well known brands have found success when experimenting with TikTok content. The Washington Post, for example, have shown newsroom footage as a means to find their digital footing, while the NBA have shared funny and inspirational messages via the platform.

Ready to create an ad? How to get started with TikTok campaigns

  • Create a TikTok account: After agreeing to the terms of use and verifying your account, you can add in your business information.
  • Sign up: Sign up for TikTok advertising and create an ad campaign. You’ll first need to enter your country information, as it is only available in certain regions at the moment. If it is available, you’ll either be approved through the ads self-serve platform and if it isn’t, you can "Make a Reservation” or opt to be informed of future updates.
  • Selections: At this point, select one of 3 objectives, namely: Awareness, consideration, or conversion. The target audience will also be determined.
  • Budget: There are daily and lifetime budgets, both of which have a minimum spend and can be adjusted at any time.
  • Ad specifics: TikTok can select the ad placement for you, otherwise this can be manually selected and you can also add in visibility on affiliate platforms.

When it comes to budget, the platform caters to both big and small businesses. TikTok advertising for day-to-day business is cost effective in terms of the in-stream videos with a cost-per-click model. The other ad types, like branded takeovers and paid hashtag challenges are where significant budget is required, hence its appeal and high returns to companies like Nike.

How does TikTok advertising work? (5)


In summary

If you’re looking for the best ways to reach youthful audiences and make your mark in pop culture, your brand needs to consider advertising on TikTok, the app which continues to dominate and grow across the world.

We at Nexa are ready to help get you started with campaigns using TikTok!

How does TikTok advertising work? (2024)

FAQs

How does TikTok advertising work? ›

Short answer: TikTok Ads cost as much as you want them to. The platform uses an auction and bidding model, meaning you decide how much you pay per view, click, or impression. However, there is a minimum spend — $50 USD/day per ad campaign and $20 USD/day per ad group.

How effective are TikTok ads? ›

Specifically, for TikTok, research conducted by its Marketing Science unit suggests 50% of the impact from a TikTok ad is realized in the first 2 seconds, and the first 6 seconds capture 90% cumulative impact on Ad Recall and around 80% for Awareness.

How much does it cost to advertise on TikTok? ›

The average CPM on TikTok is $9.16 (as of November 2023). TikTok advertising prices start at $0.50 CPM and $0.02 cost per click. A minimum budget of $500 is required to spend on a campaign, with a minimum daily budget of $50 at the campaign level and a minimum of $20 per day at the ad group level.

How does TikTok ads payment work? ›

Manual Payment

You will maintain a sufficient balance to fund your specific Ad campaign before and throughout the Ad campaign period. We will not deliver any Ad in excess of your balance and reserve the right to cease any ongoing Ad campaign or reject any new Ad campaign if your balance is insufficient.

What is the minimum budget for TikTok ads? ›

Minimum Spend: TikTok requires a $500 minimum ad spend, with a minimum campaign level daily budget of $50, a minimum AdGroup level daily budget of $20. A Brand Takeover: TikTok will guarantee five million impressions with this advertising strategy. It comes with a hefty cost of $50,000 per day.

What is better TikTok ads or Facebook ads? ›

However, Facebook offers more advanced targeting options and a broader range of audience data and analytics. So, Comparing targeting in TikTok ads vs. Facebook ads, Facebook is a winner.

How much do ads cost per 1,000 views on TikTok? ›

TikTok ads start at $10 per CPM (cost per 1000 views).

How much does TikTok pay per 1,000 views? ›

How much does TikTok pay creators? It's estimated that TikTok pays around 2 to 4 cents per 1,000 views on a video. That's all thanks to the TikTok Creator Fund.

How much does TikTok pay for 1 million views? ›

According to at least one survey, the amount TikTok paid out per 1000 views was roughly $0.02-0.04 (find out how to get more views on TikTok here). So, how much does TikTok pay you for 1 million views? These numbers mean that for a million views, TikTok creators can expect to receive between $20-40.

How long do TikTok ads take to get approved? ›

While some TikTok Ads might take longer than usual for the review process to complete, most TikTok Ads are reviewed within 24 hours.

Do you have to spend 500 on TikTok ads? ›

TikTok ads pricing can vary depending on your ad format, targeting, and campaign objective. Studies show that the average CPM is $10, but there's a minimum campaign spend of $500 across any TikTok ad.

Can you advertise on TikTok without paying? ›

Typically, to set up an ad campaign, TikTok requires a $500 minimum ad spend, with a $50 campaign-level daily budget and a $20 ad group-level daily budget. The cost can be up to $10,000 or even more, depending on what type of TikTok ads you decide to use.

Is it cheaper to advertise on TikTok? ›

The average cost per link click (CPLC) is $0.17. And the average link click-through rate (LCTR) is 1.35%. While TikTok ads remain cheaper than ads on Meta's platforms (Facebook and Instagram), TikTok's advertising rates are growing at 12.28% year-over-year—growing nearly twice as fast as Meta's ad rates are rising.

Do you pay for ads on TikTok? ›

As much as you want them to. TikTok uses an auction and bidding model when it comes to ads. That means you decide how much you pay per video view, click, or impression. Keep in mind that, while you can spend as much as you want per optimization goal, there is a minimum spend on both campaigns and ad groups.

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