Pay Attention: TikTok Ads For Your Business

Is a change of thrones coming soon for social media advertising? For more than a decade, social media advertising has been dominated fearlessly by Facebook. Since the acquisition of Instagram in 2012 and the Whatsapp app in 2014, Facebook made one thing clear to other social media platforms – there is no second place. The extremely aggressive approach that later included copying stories format from SnapChat in 2017, paid off big time as other social media platforms couldn’t pay the heavy toll and couldn’t provide their advertisers with the same efficiency and return on their advertising budget as Facebook could. 

Not only did Facebook have control so much social media ad space online, but it also had generated ruthlessly massive amounts of data on its users across three major platforms from more than 3.45 billion people. The logic is simple: own more ad space to be able to mitigate the cost to advertise on the platform, and gain as much data to generate the most efficient and accurate results to its advertisers. This means that even if advertising is cheaper on other  young platforms, Facebook will always have an edge because it will be so much more efficient in the outcome it delivers to advertisers. 

Startups could never really pose a threat to this empire, and only an army of companies or large forces could challenge their dominance. Then came TikTok….

TikTok, which is owned by Bytedance and other major investment companies, has been the most successful opponent to date, passing by long-shot companies like Twitter, Snapchat, or Pinterest. No one really knows what exactly made TikTok so popular early on. Perhaps it was the fact that it initially became viral outside of the US or the fact that it was based on music clips that were more refreshing to users, or maybe the fact that it appealed to young demographics.

The reasons don’t matter much, what matters is how fast TikTok has been growing and more importantly, that it now leads and sets the trend for the type of content being uploaded and consumed on social media. Loyal to its own traditions, Facebook quickly introduced Instagram reels and rewarded users with massive organic growth to encourage them to use this new feature. If you’re familiar with both platforms, then you might have a hard time noticing the difference between TikTok and Instagram reels. 

Unlike the success of copying stories and launching them on Instagram, I think that this time the outcome will be different. TikTok has been growing at alarming rates that should make Zuckerberg lose some sleep at night and it’s only the beginning. Influencers are moving over to creating content first on TikTok because of the reach they are getting, and businesses are shifting their social media strategies to incorporate TikTok as a future priority for growth. 

TikTok plans to not only compete with Facebook but to be the next Facebook. 

If you are an active reader of my blog, then I am pretty sure you won’t mind skipping this short history lesson and get down to business. So what does it mean for businesses and advertisers anyways?

A new door is open for business…

TikTok is growing at alarming rates and so are businesses who take advantage and try to ride that first wave. Large advertisers have already shifted big chunks of their advertising budget to TikTok which in return leads smaller advertisers to follow the herd. This results in a shift in budgets from Facebook to TikTok. Before you run and set up advertising on TikTok, it’s important to understand what results you should expect and know what you’re getting yourself into.

Karma is a bitch…

Do you know how Facebook has a reputation for copying its competitors? Well, what goes around sometimes comes around, too. The TikTok advertising platform is almost a replica of Facebook ads manager. Minor differences were added to create a sense that it’s not a copy-paste job. The good news for you is that if you know how to advertise on Facebook, then you know how to advertise on TikTok. The logic is completely the same. There is objective-based advertising where you pick the event (Purchase, Sign Up, etc..) that you want to optimize your ads for and then select your target cost (specific bid or auto bid), complete some optional demographics and targeting preferences, pick a creative, and let it run. Then, an algorithm gets to work and tries to find the most relevant and similar people to the people who complete the same conversion that you are optimizing for. Exactly like it happens on Facebook. 

TikTok 

Facebook: 

The same terminology is used to create the campaigns when you break them down by campaign, ad set, ad level. Custom audiences (targeting warm traffic), and slight targeting options and tracking methods are available in case you want to narrow down your reach. Ad creative formats include videos, images, using your TikTok posts (spark ads), and using a product catalog to create dynamic ads for your users, etc… Long story short, both advertising platforms are extremely similar. Some of the nomenclature might be slightly different, but generally speaking, both platforms work in the same way and appear visually similar.

CPM & reach opportunities – 

Usually, the first waves of advertisers who rush to advertise on new platforms are the ones who are in search of cheap opportunities to acquire new customers. The reason being is that almost all advertising platforms don’t set their own prices, they use automated bidding auction systems to compete on the ad space between advertisers and that’s how the ad cost is regulated. The more advertisers and the more they spend, the higher the cost to advertise will be. Like it was done on previous social media platforms, initially, TikTok was open to invite-only and was reserved for large companies. Then it was open to specific regions and now it’s available in most large markets. 

If you are worried that you have missed the train, then worry not. Although the platform has been and is still less competitive than Facebook, the cost to advertise was not incredibly cheap to start with and was not far from Facebook. In fact, many advertisers reported the same or similar cost per impression (CPM) on TikTok. This happens because even though the advertising platform was much less competitive than Facebook & Instagram, it also had a lot less ad inventory available) When you have fewer advertisers, but also have a lot less space to advertise on, the price per impression goes up. Additionally, even advertisers who reported significantly lower costs per impression on their ads were facing very low performance and low efficiency on their ads. Extremely low click-through rates (clicks on their ads) and very few conversions (sales, sign-ups) were generated directly from the ads. 

Not all impressions are created equal, an impression on Facebook could be more expensive, but that’s because that space is more competitive. It’s more competitive because it’s more targeted and produces more revenue for advertisers. Think of how much data Facebook has to use for its ads. Ads on Facebook started in 2007, that’s 15 years of data, algorithms, and machine learning, privacy scandals, and what not… the bottom line is that there is no comparison between the levels of efficiency between the two platforms, and that’s why cost per impression should not be your main factor as to how much you want to invest in the platform, it’s also the efficiency level that you should be examining. 

Levels of direct competition…

This is a point that many advertisers either overlook or are simply not aware of. It’s not just about what cost per impression or cost per click that you might be paying. More importantly, it’s about who is showing their ads before and after your ads and who they are targeting. Think about the following example: if I am selling mattresses online and I am debating what platform I should start with, then the amount of direct competition should be a key factor in my decision-making process and not necessarily the cost per impression or the number of advertisers on the platform. 

If on Facebook, a user sees 10 ads a month for mattresses online, and on TikTok he only sees 2 per month, then he is 5X more likely to click on my ad and maybe even purchase. In this case, does the cost per impression really matter? If it costs me more money to reach that user on the platform with less direct competition, isn’t it still worth it? Perhaps that “extra exclusivity” is worth it. It’s not just about what’s the cost to advertise or the cost to get them to click to your website, it’s about who else is marketing the same or similar product and how many other direct competitors are trying to tap in on the same market. That’s assuming of course that the users on FB and TikTok are not exactly the same users. It’s kind of like being a predator in the wild, it’s sometimes better to hunt in areas where you have less direct competition for the same prey, even if it means that in that area there is less prey available. 

Buying Off ads TikTok is more fun

How many times have you heard someone tell you that they bought this product from Facebook or Instagram or bought it off from an ad they saw on Facebook? Isn’t that just crazy? People tend to forget that Facebook doesn’t sell products to their users, the businesses who advertise on their platforms do!

Another thing that many marketers don’t talk about, is the ad-to-purchase ratio on an advertising platform like Facebook or TikTok. These numbers will always remain confidential but think of the number of ads you have on your newsfeed per month and the number of purchases you make off clicking or seeing them. A decrease in that ratio puts an advertising platform in huge risk as it will eventually lead to decreased advertising spend by businesses as the advertising will become less effective for them. It basically means that you will need more impressions and more ad space to generate the same amount of purchases as you did previously. After much criticism from users, a few years ago Facebook tried to respond to this threat by creating a feedback system that suspends and bans advertisers who give users a bad shopping experience from advertising on their platform. This was done as studies conducted by Facebook, showed that users who had a bad experience purchasing on Facebook are less likely to purchase again. So users’ saturation and dissatisfaction along with the fact that when people have a bad shopping experience, they hold the advertising platform responsible as well. 

Right now, this is not the case with TikTok. Not only TikTok is a young and viral platform, shopping on ads on TikTok is relatively new, and so are ads on TikTok. Because Tiktok is relatively new and exciting, the ads on the platform might also be more appealing to users. Just like there are trends within every platform on the type of ads that perform well, the same concept works across platform, which means that it might be more trending to buy from an ad on TikTok than to buy from Facebook. More buyers, means more businesses for everyone.

My recommendation for getting started with Tiktok Ads:

Because advertising on TikTok is relatively new, advertisers will be looking for guides and best practice recommendations for setting up and managing their ads. Below are my recommendations for getting started: 

1. Remember that similarly to how Facebook ads are designed, the platform works based on optimization towards achieving your advertising goals using feedback they receive from your ads and pixel. This means that everything that you should do from day one should reflect that. Don’t use or promote anything but your main objective. If your objective is to get sales, all campaigns should be set on “conversion” mode from day one. Ignore what other sources you read that tell you differently. The reason being is that if you use any other objective to set up your ads such as “traffic” or “engagement”, then you will be bringing people into your funnel or website that are not your core users and are not likely to complete the action that you are after. Add to that that you are likely then to retarget them again and even might target them on another advertising platform that you are using like Facebook. So it means double damage. Remember that platforms like TikTok have ways to fine tune your targeting even without data. They can look for “early cues’ ‘ and focus first your ads on the people who click, then later on the people who add to cart and then finally on people who are likely to purchase. So even without data, they will work their way up to your final goal while always keeping targeting set on the most relevant audience.

2. Use a simple setup. Remember that platforms like TikTok use machine learning optimizations to maximize your ad performance. No one really can predict how the machine will work and break down the exact steps, but all experts agree that the more freedom you give the machine, the better results it will deliver in the long run. This means again, leave targeting broad, refrain from having many different campaigns, and keep things simple. The fewer campaigns the better, leave targeting broad and focus just selecting your budget, advertising goal and your target cost, let the machine do the test.

3. Focus on the creatives. Machines can’t create appealing creatives, only humans can. I strongly advise against using their recommended templates or ready to go designs as this is not something you should shortcut. Creatives are the most important element in your campaigns, way more important than how you set up your campaigns. Remember that it’s not about one creative that will perform better than others, it’s about creating a story for your brand. There is a correlation between the number of creatives you publish and the amount of money you spend on ads. The process needs to be ever-green. 

4. Remember it’s a discovery platform. Just because you spent $100 today and you didn’t generate any sales, it doesn’t mean you lost $100. People are not searching for your product and it takes persuasion and built intent to make a purchase. Understand that analyzing daily results won’t get you anywhere and focus on long time frames such as a week or two to evaluate performance and optimize your campaigns.

5. Minimal interference. The algorithm or the machine learning (whatever you want to call it) are acting as an external factor. It can’t predict when you’re going to make changes to the budget or bid, or even creatives. Therefore, everytime that you make changes, it must be recalculated to try to meet your new advertising goals. Algorithms work best when we interfere the least amount possible.

6. Think long term, any successful account that I audited or had access to, always had long-term planning in mind. Think of how you turn TikTok from a platform that generated results early on for your business to a sustainable incoming traffic channel for your business.

And don’t forget, don’t ever give up.

Summary

There’s a new advertising superpower in town that goes by the name of TikTok. Before you jump on the bandwagon, there are some important things to keep in mind even though the two advertising platforms appear virtually identical. Facebook has 15-years worth of user data that drives its ad efficiency. As a new platform, TikTok has some catching up to do. Don’t get caught up analyzing the cost per impression on each platform and instead focus on how much you want to allocate towards the platform overall. Despite not having as much user data to feed its advertising algorithms, TikTok may have a leg up on direct competition. As we all know, Facebook has become saturated with ads and TikTok offers itself as a new playing field. 

Tips to succeed on TikTok as an advertiser aren’t much different than for Facebook. Remember to focus on your goal. If your goal is conversions, then set your campaign to conversion mode and stick with it. Use a simple setup to avoid overcomplicating your campaign by setting all sorts of strict targeting requirements. Like on Facebook, creatives are the most important aspect of your campaign. Avoid using templates and keep your creatives fresh and unique. 

Your success shouldn’t be measured by daily results. Instead, choose to focus on long-term timeframes to evaluate performance. A long-term mindset will also help prevent your growth from plateauing and help you generate sustainable traffic to your business. Lastly, give the algorithm time to collect user data and generate results. Continuously changing your campaign forces the algorithm to recalculate and start from scratch.