TikTok has become important when it comes to businesses — particularly as a tool for marketing and advertising — thanks mainly to the sheer number of users currently using the app.
Let’s rattle off some important facts and numbers: There are currently 4.8 billion people using the internet as of this year, and in terms of social media platforms, some 1.39 billion of those are monthly active users of Tiktok.
TikTok, an app created in China, has grown exponentially and is expected to grow in the coming future based on what we can see in the app’s usage increase from 2018 to 2022. There was a 394.9% increase in app usage from January 2018 to December 2018. Since then, the number of TikTok users has grown steadily from 1 billion monthly users to 1.39 billion just between September 2021 and January 2022.
In terms of demographics, Gen Zs make up 40% of the consumers of TikTok ad campaigns. Surveys say that 63% of the Gen Z age group spend many hours of their week on TikTok. Gen Zs love TikTok because it allows limitless media-sharing that follows a successful algorithm.
So it makes sense that TikTok Ads garner engagements more than the usual pop-up ads on other streaming websites. Instead of annoying pop-up ads, TikTok ads bank on creativity and use an almost nuanced approach to generate views.
Let’s face it: young people grew up with technology. They can differentiate organic content from blocky ads. So it’s not a walk in the park to get TikTok users to spend seconds of their time watching ads—especially if the ad is not slated for success. This nugget of information can be useful for businesses, particularly e-commerce companies, should they wish to zero in on a particular niche or market (more on this later).
As a marketing tool, TikTok Ads are therefore powerful and impactful tools, and if used properly, can mean profit for a whole slew of businesses.
In this piece, let’s take a look and try to simplify the different kinds of TikTok advertising formats that businesses can use. The challenge here is for companies to choose which type or types of ads they can leverage to generate the most engagements, which will hopefully translate to more sales.
Types of TikTok ads
These are the type of TikTok Ads formats that advertisers should familiarize themselves with:
Ads that look like regular content are what they call in-feed ads. They seamlessly go with the features of the app. This type of ad often appears as people scroll through their “For You Page” or FYP.
Brand Takeover Ads
Again, these types of ads appear on a person’s FYP. However, these video ads are different from others as they appear full-screen, and are usually 3 to 5-seconds long. These ads also direct viewers to a “Hashtag Challenge” or landing page. Brands can thus choose either a hashtag or a landing page using this type of ad.
The first thing that pops up on the screen when you open the app—that’s the TopView ad. TopView Ads are often described as “video-first format” ads that are 60 seconds long and appear immediately after someone opensTikTok.
Branded Hashtag Challenge
Ad campaigns can use catchy hashtags for a more organic way of spreading content from user to user. These are usually sponsored hashtags and are found at the top of TikTok’s “Discover Page.” The unique characteristic of this type of ad is that it can generate content from users.
Branded effects can open small interactions between the users and the companies who roll out the ads through the clever use of sharable stickers, filters, and special effects. Experts say this type of ad is best used in combination with the other TikTok ads.
A quick note, though: TikTok requires a company to spend a minimum of $500 on an ad campaign. Depending on the type of ad, TikTok ads range from $50,000 to $120,000. Large as those numbers may be, companies are more than willing to pay simply because the potential is also great.
How great? One industry estimate says TikTok ads reached a massive 885 million users as of January 2022. Thus, TikTok ads do go a long, long way when it comes to advertising.
The app is a dazzling opportunity for commerce, and due to its expected growth of up to 1.8 billion users by the end of 2022. The number is expected to be even higher. TikTok is not just for large companies. Small businesses can also participate in the game—how and why? The TikTok algorithm.
TikTok can see the user’s likes and shares, which accounts they follow, which posts they comment on, the user’s created content, and the user’s re-watched videos. With this information, the app predicts which upcoming content the user might enjoy next. The app does not take how many followers a user has into account.
TikTok ads are unique in the way that engagement is measured through cost per mille: which is the cost an advertiser pays per 1,000 views. Through cost per mille (CPM), the cost of an ad can be relatively low. But features in branded hashtags appear on Tiktok’s Discovery Banner: that’s when the costs do get higher.
TikTok is complex in a way that a user is complex. The app is video-based and most often, viral Tiktoks feature authentic and shared experiences. Trends tend to pop up as groups of individuals create a shared interest. Fashion trends, music trends, celebrity trends—these are all ever-fluctuating.
Each video uploaded and watched by users is personalized. This nuanced feature within the app brings advertisers their biggest challenge: creating an ad that leaves an impact. It is therefore a challenge for companies to identify these complexities and how to maximize them.
What makes a TikTok advertisement impactful?
Most companies that spend big bucks on TikTok ad campaigns pay attention to the demographics. Identifying the age group, the location of its users, the ethnicity, the language users speak and understand, and the sex of the target audience can help advertisers create clickable and watchable content. Advertisers are expected to be creative.
Here are a few tips:
Early on, advertisers should figure out who their target audience is. Figuring out the audience’s interests makes for easier content-making. Businesses should also try to be as personal as they can, without compromising company integrity. Advertisers are encouraged to be as niche and as creative as possible in order for an ad campaign to leave the app and integrate itself into the user’s daily life. A funny ad can be shared from friend to friend.
Advertisers should consistently update their products to keep people interested. Explore what type of advertisement has the most engagement—and capitalize on that. Reaching out to influencers or participating in branded hashtags can rack up views. Don’t skimp on ad budget!
TikTok is a growing app that expects advertisers to keep up. Its reach to millions of active users offers unparalleled engagements that could make or break your brand.