In just a few short years, TikTok has become nothing short of a cultural phenomenon. The short-form video app has skyrocketed to over 1 billion monthly active users globally, with an ultra-engaged audience spending an average of 95 minutes per day on the platform.
Once mostly the domain of dancing teens, TikTok now attracts a diverse range of users across age groups, locations, and interests – and brands have taken notice. With ad spend on TikTok surging 500% in just Q4 2021 alone, a growing number of businesses of all kinds are dipping their toes into TikTok advertising.
But with any hot new ad channel, one big question looms: is it actually worth the investment and effort? Let‘s dig into the key benefits that make advertising on TikTok a smart bet for brands in 2023 and beyond.
TikTok by the Numbers: A Massive Global Audience
First, it‘s impossible to overstate TikTok‘s incredible reach and growth. The latest statistics paint a staggering picture:
- 1.2 billion monthly active users worldwide
- 173 million monthly active users in Europe
- 100 million monthly active users in the US
- Available in over 150 countries and 75 languages
- Over 200% year-over-year growth since 2018
For comparison, Instagram has about 1.4 billion monthly active users globally, while Facebook boasts nearly 3 billion. So while TikTok may not be the biggest social media player (yet), it‘s quickly gaining ground on the long-dominant platforms.
What‘s more, TikTok isn‘t just popular with teenagers anymore. While 60% of US TikTok users are under 30, the 30-50 age bracket is the fastest-growing cohort on the app. There are thriving communities on TikTok for every niche and interest, from cosmetics and cooking to B2B software and investing.
In other words, no matter what audience you‘re trying to reach, chances are a significant chunk of them are scrolling through TikTok every day. The platform‘s enormous potential for reach and exposure is hard to match.
Breaking Down the TikTok Ad Basics
So how can brands tap into TikTok‘s massive audience? The platform offers five core ad formats:
- In-Feed Ads: Video ads up to 60 seconds that appear between organic posts
- Brand Takeover: Full-screen ads that appear when a user first opens the app
- TopView: Similar to Brand Takeover but stay at the top of the feed for 5s before turning into In-Feed Ad
- Branded Hashtag Challenge: Custom hashtag and landing page encouraging user-generated content
- Branded Effects: Custom stickers, filters, and special effects for users to engage with
TikTok‘s ad targeting options include:
- Age
- Gender
- Location
- Language
- Interest and behavior categories
- Custom and lookalike audiences
The minimum TikTok campaign spend is $500, and typical costs range from:
- $10 average cost per mille (CPM)
- $1-2 average cost per click (CPC)
- $6,000 for Branded Hashtag Challenge (6 days)
- $50,000-100,000+ for Brand Takeover (estimated)
While not the cheapest social ads, TikTok‘s unique benefits and impressive results make it a worthwhile investment at a variety of budget levels. Let‘s explore those benefits more closely.
Benefit #1: Unmatched Potential for Viral Reach
Perhaps the biggest draw of TikTok advertising is the potential to go viral and achieve massive organic reach with your branded content.
Unlike other social platforms that prioritize content from friends and family, TikTok‘s discovery-based algorithm and "For You" feed surface posts from anybody – including brands. If your ad is relevant and engaging enough, it can spread far beyond your paid audience to millions of users for no extra cost.
This viral potential has been a game-changer for many brands on TikTok:
- E.l.f. Cosmetics‘ #eyeslipsface campaign sparked 5 million user-generated videos and 7 billion views
- Chipotle‘s #GuacDance challenge saw 250,000 video submissions and 430 million hashtag views
- Crocs‘ #ThousandDollarCrocs giveaway earned 100,000 video entries and 2.9 billion views
The earned media value and brand lift from just one viral TikTok ad can be astronomical. Getting that kind of runaway exposure through a traditional ad buy alone would be incredibly difficult and expensive. On TikTok, sharing is the default.
Benefit #2: A Uniquely Engaged and Attentive Audience
TikTok‘s potential reach is matched only by the depth of its user engagement. While other social platforms struggle with declining usage and public trust, TikTok remains incredibly sticky:
- Average user session is 10.85 minutes – more than 3x longer than Instagram
- Average of 8 sessions per day per user
- 90% of users visit multiple times per day
This deep engagement means users are more immersed in the TikTok experience and paying closer attention to the content they see – including ads. One study found that TikTok users are 23% more likely to remember a brand after seeing a TikTok ad compared to TV viewers.
TikTok‘s unique combination of lean-back entertainment and active participation (via likes, comments, and video replies) creates an ideal environment for ads that can capture attention and drive meaningful interaction. If your brand can create truly entertaining content that feels native to TikTok, your potential for engagement is through the roof.
Benefit #3: Strong Proven Performance for Driving Results
All that potential is only meaningful if it translates into concrete business results – and luckily, TikTok ads deliver. The platform‘s average click-through rate (CTR) and conversion rates are among the best in the social ad landscape:
- 1-3% CTR for In-Feed Ads (vs 0.6% industry average)
- Up to 18% CTR for TopView Ads
- 3.5-5% average conversion rate (vs 1-2% industry average)
These strong engagement rates mean more efficient customer acquisition and stellar return on ad spend (ROAS). Many top brands are seeing impressive numbers from their TikTok campaigns:
- Aerie generated 700,000 videos and $2 million in donated media value from #AerieREALPositivity challenge
- Poshmark earned an 8x ROAS from a shoppable hashtag challenge
- Mucinex drove a 97% increase in follower count and 38 million views on their #BeatTheZombieFunk challenge
While results will vary based on industry, budget, and campaign goals, it‘s clear that TikTok‘s unique ad formats and creative flexibility lend themselves to driving meaningful, measurable user actions when executed well.
Benefit #4: A Playground for Creative, Authentic Brand Expression
Perhaps TikTok‘s biggest advantage as an ad platform is the endless creative possibilities. Unlike the polished, painstakingly produced ads common on other channels, TikTok users embrace and even expect a raw, DIY aesthetic from brands.
The most engaging TikTok ad content often looks just like a regular TikTok post:
- Short (15-60 seconds), vertical videos
- Starring real people, often employees or customers vs actors/models
- Casual, conversational scripts with humor and/or compelling stories
- Featuring trending songs, dances, filters, and organic post styles
- Shot on a smartphone with minimal editing
This refreshingly authentic approach is a huge opportunity for brands to show a more human, relatable side and connect with customers on a much deeper level. Some of the most successful brand TikTok accounts (@duolingo, @chipotle, @washingtonpost) have distinct personalities that shine through everything they post.
Colaborating with established TikTok creators is another great way to build instant credibility and trust. Influencer posts on TikTok feel more like a recommendation from a friend than a paid endorsement – a valuable perception for any brand advertiser.
The key is to remember that TikTok is an entertainment platform first and foremost. Build your ad creative accordingly and you‘ll be rewarded with unparalleled engagement.
Benefit #5: A Cost-Efficient Approach to Reaching New Audiences
Despite its impressive performance, TikTok remains a highly cost-effective channel for social advertising. While ad costs vary based on targets and formats, TikTok‘s CPMs and CPCs are lower than many other channels:
[Insert ad cost comparison table – TikTok vs other social platforms]What‘s more, the wide range of TikTok ad products means there are options to suit nearly any budget. For example:
- Small businesses can start with highly targeted In-Feed Ads with a lifetime budget of a few thousand dollars
- Mid-size brands can invest in a Branded Hashtag Challenge to drive widespread UGC and engagement for under $50,000
- Large enterprises can go all-out with custom Branded Effects, creator partnerships, and takeover placements to dominate the platform over a period of time
This flexibility, combined with TikTok‘s younger user base and unmatched organic reach potential, make it an ideal platform for reaching coveted new audiences efficiently. Brands can start small and scale up spend as they refine their approach and prove out campaign ROI.
The Takeaway: TikTok Ads Are More Than Worth the Hype
TikTok‘s unique combination of scale, engagement, and creative potential make it a no-brainer for brands looking to up their social ad game in 2023.
By advertising on TikTok, you can:
- Expose your brand to an enormous global audience
- Capture the attention of highly engaged, leaned-in users
- Drive exceptionally strong ad engagement and conversion rates
- Express your brand personality in new, authentic ways
- Reach key audiences efficiently at a variety of budget levels
While the platform‘s ad formats and best practices may be a creative departure for some marketers, the results are more than worth the learning curve. And as more users of all ages flock to TikTok, its potential value for advertisers will only continue to skyrocket.
No matter how you slice it, TikTok is simply too big – and too effective – to ignore in your social ad mix. So get out there and start experimenting with TikTok campaigns that can entertain, inspire, and engage your target customers like never before. The world of short-form video is your oyster!
Need some extra help getting started? Check out TikTok‘s official guide for businesses for tips, tools, and inspiration to make the most of your advertising efforts on the platform.
