TikTok is the latest social media platform to be added to the advertising platforms rooster available for mobile marketers to acquire new users. Many experts in the digital space have been observing the growth of this app. Still, very few have managed to understand the tremendous TikTok business potential, especially regarding user acquisition.
What is more, TikTok opened its doors to advertisers globally not so long ago. REPLUG, like other agencies, has had access to it to help our partners grow on new and unexplored channels— being one of the few partners whitelisted for advertising in Germany and other European countries.
Let’s start with some background information, in case you missed the whole TikTok phenomenon and want to understand TikTok ads.
What is TikTok?
TikTok is a video social network where users create vertical videos of 15 seconds in length. These, however, can be combined with other short videos to make a longer collection of a maximum of 60 seconds. The videos can include music samples, filters, and other visual effects that allow users to maximize the short length of the clips.
ByteDance, a Chinese company founded in 2012, launched in early 2016 the first version of the video social network, specifically for the local market, with the name Douyin. The internationally known version was launched officially only in 2017 and became popular in several countries, especially in the US— thanks to the acquisition of the other music app musical.ly
In a very short time, TikTok took the Stores by storm and climbed in popularity in no time. As a matter of fact, in 2021, TikTok was the most downloaded app, ahead of YouTube, Facebook, and Instagram.
TikTok in Numbers
To understand how TikTok is taking over the world, it’s better to take a look at some numbers:
- TikTok MAUs are estimated to be one billion
- In 2022, TikTok has been downloaded more than three billion times
- In China, 600 million users access it daily
- In the US, TikTok has been downloaded over 200 million times
- Around 53% of TikTok users globally are Gen Z (18-24 years old)
- TikTok is now accessible in more than 200 countries
According to SensorTower, it is estimated that TikTok has more than $2.5 billion in consumer spending. Moreover, Tinder, Netflix, YouTube, and Tencent Video are among the other applications that have produced more than $2.5 billion in customer spending.
Another interesting point is that the majority of the downloads are in the Google Play Store— accounting for over 1.5 billion downloads, while the App Store has had 495.2 million downloads.
With those numbers is not so difficult to understand why this relatively new social network has become the center of attention for many advertisers. Both branding and performance marketers are embracing the TikTok business platform to create new and exciting content to engage an underserved audience.
TikTok Business: What Are the Advertising Options for Marketers?
There are three main ways advertisers can take advantage and go for mobile marketing on TikTok to promote their services or product:
- Create a TikTok page and start to create content. Like any other social media, this would request someone who understands the audience and start creating visual content that can generate organic reach and engagement.
- Work with influencers and pay them to create content that would have organic reach. For this purpose, TikTok has created a “Creator Marketplace” where advertisers can find relevant influencers.
- Advertise directly on TikTok with relevant content— TikTok ads manager— usually using influencers’ videos for performance-based campaigns (auction solution).
To these options, advertisers can book directly with TikTok-specific placements or “challenges” that have predefined pricing and positioning in the app— such as the “hashtag fyp” or the “Top View” format.
How to Master TikTok Commercial for Performance-Based Mobile UA Activities?
For mobile UA activities on a performance basis, we need to understand the TikTok business opportunities and how best to take advantage of the fastest-growing social video platform.
First, we have used the platform’s self-serve TikTok ads for performance activities. This is convenient as it is already connected to all the major MMPs and the UI is very similar to Facebook ads manager, making it very easy to navigate.
The below data has been gathered while running campaigns for some of our partners in the past few months, specifically in the European markets, but across different verticals.
Learning #1 – Relatively Low Ad Inventory Costs
The first thing we have noticed while running app installs campaigns on TikTok is that the ad inventory is very affordable compared to other ad platforms. Most likely, it is because they have recently opened to advertisers on a performance basis, and the competition is somewhat limited.
To better understand the low TikTok ads inventory costs, we made a direct comparison with Facebook, and the results were just astonishing.
The data above prove to be even more interesting if we consider that on TikTok, we spent only 16% of the budget on Facebook.
Learning #2 – Audience Is Engaged and Converts Down the Funnel
One of the biggest concerns for many advertisers is that being the TikTok audience very young— compared with Facebook or other social media channels—they barely convert down the funnel (they don’t buy).
Concerning the period analyzed, we noticed quite the opposite, though. When it comes to TikTok business, we can see the following:
- TikTok ARPU was lower than Facebook (-37%), confirming that the buying power of its audience is lower (i.e., younger audience).
- TikTok eCPA was, on average, 53.5% lower than Facebook, giving us confidence that the lower cost of acquisition per in-app action can fully justify a smaller basket size.
- Finally, the quite amazing thing we noticed was that TikTok’s ROI was, on average, +46% (for both OS), proving that investing in TikTok’s business side (if done correctly) can bring incredible results.
Learning #3 – Work Closely With TikTok Business Influencers to Get the Results
While running the campaigns for our partners, we noticed that the key to bringing meaningful results is creating content aligned with the channel. As TikTok claims, “Don’t make ads; make TikTok.”
In the initial mobile marketing on TikTok testing phase, we decided to try video creatives used on other channels (like IG) and got some first encouraging results. However, based on our experience and research, we were not entirely convinced that using other channels’ creatives was the best approach to improve further the cost of acquisition.
After agreeing with our partner, we changed gears and took a new approach.
We researched whether TikTok users already used our customers’ products in their videos. Moreover, we did so by searching for the company name in the hashtag section. Following that, we approached a few micro-influencers and asked them to create custom-made videos for our partner.
While doing this, we also looked at TikTok Creator Marketplace to approach bigger influencers and test this option.
TikTok Business: Conclusion and Our Tips
Our combined approach resulted in a great opportunity for our partner. In addition, it allowed us to reach users with a paid strategy and organically—as those influencers kept sharing the videos on their profiles.
On top of that, the content created was perceived as “original” by viewers, getting an incredible engagement rate.
So, mastering this TikTok business approach is fundamental to getting the right channel results. For this reason, we put together a few key insights based on our experience:
- Try to engage with users who created content using your product. Offer them a discount in exchange for a video. The success rate will be incredibly high, as they already love you.
- Use the Creator Marketplace. It’s easy to use and facilitates communication (with no additional cost).
- Start first with small influencers—they are more affordable and easier to “manage.”
- Consider working with some agencies—they could have access to popular influencers on other platforms (such as YT or IG). But they’re still growing on TikTok so you can get good deals.
- Ask the influencers to create TikTok videos, not ads for your products.
Interested in testing TikTok to scale your audience and result on a performance-driven basis? Get in touch with us.
Originally published on October 16, 2020. Updated on August 23, 2022.