How Much do TikTok Ads Cost?

TikTok was relatively slow off the block in implementing a formal advertising program. For this reason, brands had to find alternative ways to advertise on TikTok. This is one of the reasons that influencer marketing and branded promotions have thrived on the platform.

TikTok started experimenting with advertising in 2020, although it didn't take off until well into 2022. Before that, brands would advertise on TikTok through channel takeovers, hashtag challenges, and influencer promotions.

Since there was no general rule, brands would pay anywhere between $50,000 to $120,000 to take over a popular TikTok channel, for instance, and the cost of a hashtag challenge had a flat fee of $150,000 for six days, with firms spending additional dollars on promoting the challenge.

However, now that TikTok has introduced short native video ads, things are now much more affordable for brands wishing to advertise on TikTok. This guide will look at the costs associated with advertising on TikTok in 2024. It will cover detailed insights into the pricing structure, factors affecting costs, budgeting strategies, and future advertising trends. 

TikTok Now Has a Formal Ads Program? Will it Cost You a Fortune?

It has taken a while for TikTok to enter the ads market, but they have now set up their formal ads program. It has been slow, gradual progress, however. At least this has meant that you don't have intense competition to gain the coveted spots on TikTok – unlike on Facebook and Instagram, where winning the best advertising positioning can get ruthless and cutthroat.

Source: tiktok.com

Is TikTok Advertising Suitable for Your Business?

TikTok is rapidly growing in popularity as a short video-sharing app. In fact, there have been months when TikTok was the most downloaded non-gaming app in both the Apple and Android (Google Play) app stores. It shouldn't be a surprise that many brands want to be part of the action. 

However, any TikTok advertising (or even running a company TikTok account) will depend very much on the demographics of your intended customer base. So, let's look at the crucial TikTok statistics and see if TikTok advertising is suitable for your business.

• As of 2024, the majority of TikTok’s user base, 18.9%, are men aged 18-24, with women of the same age group making up 17.3%. The following age group, 25-34, boasts similar numbers, with 14.6% women and 19.3% male.
• Looking specifically at TikTok's user base by gender, most of the app's users are female, 51%, with males making up the remaining 49%. 
• TikTok ads have 30% cheaper CMC than Meta ads.
• TikTok has an average ROAS for ads of 11x. That means you get $11 for every dollar spent.
• Gen Z users are 1.2 times more likely to engage with brands on TikTok for shopping than on other social media platforms.
• Nearly 50% of Gen Z users use the platform for social commerce. Millennials make up 36% and Gen X 23%.
• TikTok reported $16.1 billion in revenue for fiscal year 2023.

So, if these statistics catch your attention, you should seriously consider advertising on TikTok, as well as setting up your own TikTok presence. If you sell products more suited to Baby Boomers or Generation X, then you will probably perform better on the platforms where they spend their time.

TikTok Advertising Can be Expensive Compared to Facebook and Instagram

Obviously, some of TikTok's best-known advertisers, such as Nike and Disney, have deep pockets when it comes to advertising. They are highly unlikely to quibble about cost unless there is a vast difference.  It can seem more expensive than the more familiar Facebook / Instagram advertising, however.

Ads on TikTok are still new. This means that TikTok can afford to charge a premium rate for them, knowing that advertisers aren’t going to abandon TikTok to compete with their competitors for prime Facebook/Instagram advertising space. 

To get a sense of the costs for TikTok ads, we have to look at TikTok ads' pricing structure.

TikTok Ads Pricing Structure

• As of 2024, TikTok's average CPM rate starts at $10 per 1,000 views.
• The average CPC on TikTok is approximately $1.
• To advertise on TikTok, there is a minimum campaign budget requirement of $500.
• TikTok also imposes daily budget requirements, with a minimum of $50 per day at the campaign level and $20 per day at the ad group level.

Types of TikTok Advertising and Marketing

When it comes to advertising and marketing on TikTok, several options are available to you. Those include:

Working with Influencers

Until relatively recently, if you were a firm wanting to market on TikTok, you only really had one viable option – to partner with a TikTok influencer and work with them to promote your brand. And in many ways, this hasn't changed.

If you can build up harmonious relationships with well-performed and popular TikTok users, whose follower demographics match your target audience, then this is still probably the most cost-efficient way to spread your message. Additionally, leveraging influencer marketing platforms can provide a streamlined approach to connect with suitable influencers, optimize campaigns, and track performance, enhancing the overall effectiveness of your TikTok marketing strategy.

If you can collaborate with an influencer to promote your products to a massive network of interested followers, you have the chance to gain a good return on your investment. This does, of course, assume that you sell a product that makes for interesting, enticing videos, that will spark an influencer's followers to take notice of your brand. So how much can you expect to pay for influencers to promote your product or service?

TikTok Influencer Advertising Rates

• Nano-Influencers (1 - 10k followers): $5 - $25 per post.
• Micro-Influencers (10k - 50k followers): $25 - $125 per post.
• Mid-tier Influencers (50k - 500k followers): $125 - $1,250 per post.
• Macro-Influencers (500k - 1 million followers): $1,250 - $2,500 per post.
• Mega-Influencers (1 million+ followers): $2,500+ per post.

@faithsfresh THE BEST DAY OF MY LIFE @Lumineux #lumineux #grwm ♬ Music For a Sushi Restaurant - Harry Styles

Promoting Your Own TikTok Channel

If you have a young social media marketing team, and your brand targets the correct demographics for TikTok, you could consider setting up a TikTok channel for your company. This is no different from a firm that sets up Instagram, Facebook, or Twitter accounts or shares videos on a company's YouTube channel.

But remember that people don’t come to TikTok to learn about your brand and its products. They generally go there for entertainment or to share their creative endeavors. The last thing they want to watch is the ads for your products.

So if you are going to set up a TikTok channel, you have to give value to your followers. You want to share videos that interest them, perhaps make them sufficiently curious to take a closer look at what your brand offers.

Of course, some products and services have a much easier time than others gaining traction on TikTok. Film studios can easily set up and share short video clips of the latest blockbusters. Likewise, it is a natural fit for music companies to share music clips.

Sharing TikTok Content on Other Social Platforms

Just because something originated on TikTok doesn’t mean that it has to stay there. You will find numerous channels on YouTube where people share TikTok highlights videos, for example.

You could even promote relevant TikTok content (either your own or those created by influencers with whom you have made arrangements) via your Instagram Stories, Instagram Reels, and Snapchat Snaps. Just avoid spending too much time sharing TikTok promotions on social sites with markedly different demographics to TikTok.

TikTok Challenges

TikTok’s name has become synonymous with challenges. Probably the best-known one was Jimmy Fallon's #Tumbleweed Challenge. He challenged people to make a video and share it on TikTok, of somebody rolling around on the ground like a tumbleweed, with Western-style music playing in the background. The challenge was a tremendous success, with Tikok fans uploading 8,000 videos, resulting in over 9 million views in seven days.

@fallontonight Jimmy takes the #TumbleweedChallenge ♬ #TumbleweedChallenge - FallonTonight

While a successful brand-focused challenge would bring maximum publicity, it would also be harder to get cynical TikTok followers to follow the lead.

TikTok’s Paid Advertising Program

TikTok has finally followed Facebook, Instagram, Twitter, YouTube, and LinkedIn, and set up its official paid advertising program.

While the other forms of TikTok marketing are relatively unofficial, you might prefer the structure of TikTok's official paid advertising program. It is relatively early days for this, so the platform lacks some of the finesse of the Facebook and YouTube versions in particular. But you may be able to make up for this because it is less likely that your competition will be flooding TikTok with higher ad bids than yours.

TikTok offers four main types of ads:

1. In-Feed Ads

Native in-feed ads on TikTok resemble the typical advertisements that one would encounter on platforms such as Instagram or Twitter. These ads last for 15 seconds and appear naturally within a user's feed, and they can be skipped. Various call-to-action (CTA) types, such as app downloads, website clicks, and more, are possible with these ads.

2. Brand Takeover Ads

One of the pricier options for ad-buying on TikTok is brand takeovers. These ads can come in the form of still images, GIFs, or videos, and are linked to a brand's profile or a corresponding hashtag challenge. TikTok allows only one brand per day to monopolize this feature, ensuring a genuine brand takeover. Although brand takeovers require a significant investment, they guarantee that the day belongs solely to the brand that pays for it.

3. Hashtag Challenge

The hashtag challenge is likely the most well-liked feature by TikTok users since it provides them with a sense of purpose beyond just viewing an ad. TikTok's foundation is user-generated content, and hashtag challenges encourage interaction by combining user creativity with brand messaging. Additionally, partnering with influencers can help to increase buzz around the hashtag challenge.

4. Branded Lenses

Similar to Snapchat's branded filters, TikTok's branded lenses feature allows users to choose from various filter options to enhance their videos. Branded lenses appear in the trending section, and users can interact with them while filming their videos.

As you would expect, TikTok in-feed native ads are generally short videos, although you can opt for static images if you prefer. You can even use custom filters to enhance the look of your work.

Experienced marketers who have used native TikTok ads suggest you should budget at least $500 for even a simple campaign. One marketer goes as far as to suggest that you should be prepared to pay $50,000 to $120,000 to run ads on the platform.

5. Spark Ads

Spark ads are different in many ways since they use organic TikTok content for the creative. You can post Spark ads using content from your own TikTok account or from other creators, pending authorization. Since these ads use content from TikTok accounts, they maintain the original video's likes, comments, shares, and comments. There is no limit to how many Spark ads you can use from the same post. You can spend as little as $20 on Spark Ads.

6. Top View Ads

Finally, there are Top View Ads. These ads appear the moment the user opens the app and can last up to a minute. What's interesting about Top View Ads is that they are highly impactful and the first thing a user sees once they open the app, making them highly effective at capturing attention.

Conclusion

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Influencer Marketing Hub

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The Influencer Marketing Hub Team brings together a diverse group of experts with a passion for influencer marketing, digital trends, and social media strategies. Each piece of content crafted by this team is researched and written to provide valuable insights, tips, and updates for our readers. Our authors are dedicated to delivering high-quality, informative, and engaging articles that help businesses and influencers thrive in this rapidly changing digital world.