How Much Does It Cost to Advertise on TikTok?

So you're ready to dive into the world of TikTok advertising. Who can blame you? The app has skyrocketed in popularity. In fact, social media users spend more time on TikTok every day than on any other platform.

In this article, we’ll dive into what it actually costs to advertise on TikTok. These essential details will help you make an informed decision on whether or not you should add TikTok ads to your marketing mix.

Minimum TikTok Advertising Spend

TikTok doesn’t impose any minimum spending requirements for new advertisers. Whether you’re a small business hoping to run some tests or a larger enterprise looking to gain new market share, you can start running ads on TikTok that fit your budget.

CPM Prices on TikTok

When it comes to the cost-per-thousand impression (CPM) prices on TikTok, it’s important to note that they will vary based on factors such as targeting options, ad formats, and campaign objectives. If you are needing to estimate potential impression volumes for your budget, I like to use a $15 CPM. I’m often pleasantly surprised when our actual CPM comes in below this projected number.

Billing Options for a New Advertiser

TikTok understands the importance of flexibility and offers a range of payment options to cater to the needs of advertisers on its platform. Here are some common payment options you can expect:

1. Credit/Debit Card: TikTok allows advertisers to make payments using major credit and debit cards

2. PayPal: TikTok also supports transactions through this popular online payment platform.

3. Wire Transfer: TikTok provides the option to make payments through wire transfer. This method is for advertisers who prefer direct bank transfers and want to handle transactions offline.

4. Ad Credits: TikTok also offers the option to use ad credits as a form of payment. Ad credits can be purchased in advance and then used to pay for your advertising campaigns within the platform.

Bidding Options

TikTok’s self-service ads platform offers a variety of bidding options including daily budget caps, campaign lifetime budgets, and bid strategies that allow you to optimize your spending based on your goals. It’s fairly simple to manage your budget with these bidding features, especially if you are comfortable with other major ad platforms.

Driving Real Business Results on TikTok

If your goal is to break through the ad noise and drive real business results, you will want to keep a close eye on your campaign’s reach and frequency, as well as your main “cost per” metric. This may be a cost per acquisition (CPA), a cost per lead (CPL), or even a cost per view (CPV).

Your reach and frequency allow you to understand how much of your audience has actually seen your ad and how many times the average person has seen the ad. Understanding this will give you an idea of the overall ad saturation, and if you need a creative refresh.

We usually recommend an ad frequency of around 3x/week with at least 2-3 creatives rotating. You’ll then want to refresh every quarter - if your reach and frequency deem it necessary.

Before launching your first campaign, try to get an idea of what your “cost per” metric goal needs to be set at. Don’t guess or accept a “finger in the wind” metric. Do the math and figure it out.

If you know your average acquisition is worth $100 and you need to maintain a 50% margin after the lead, you know that you can only afford a $50 CPA.

What is the “cost per” metric you should focus on, and how should your business set the goal?

The Impact of Quality Ad Creative

On TikTok, the creative is key! The quality and appeal of your ad creative can significantly impact your CPM prices. Engaging, eye-catching content that resonates with TikTok users is more likely to generate higher engagement rates and lower CPM costs. So, unleash your imagination, experiment with innovative ideas, and create ads that stand out from the crowd.

Don’t fall into the trap of thinking that every piece of content you use as an ad needs to be polished, tailored and perfect. Often the most organic feeling content performs best on TikTok!

CPM Price vs. Optimization Options

CPM prices on TikTok will fluctuate based on the optimization options you choose. It’s important to keep in mind that different optimization settings may yield varying price results.

Factors such as campaign objectives and conversion goals can influence CPM prices greatly. For example, you should expect to pay more when you are telling TikTok to optimize your campaigns towards a lower funnel activity. Think of something like purchases or a detailed lead. Awareness and reach tactics will almost always yield lower CPM prices.

Regularly monitoring and adjusting your campaigns based on performance data can help you optimize your ad spend effectively.

Should your business be testing TikTok Ads?

We always encourage businesses to test new platforms especially when they have the capacity and are already winning on other marketing channels.

The reality is, for most businesses, TikTok Ads will act as a strong higher funnel activity. If your business meets the criteria above and has the cash flow to support driving awareness through a new paid ads channel, we say test away!

If reading this has solidified your interest in TikTok advertising but you are unsure where to start, High Beam Marketing is here to help. Schedule a discovery call with our experienced team of digital ad specialists, and let us guide you on your way.