The Performance Marketing Guide to TikTok Ads Cost (2024)

In social media and performance marketing, TikTok is synonymous with creativity and engagement. With its unique video-sharing framework, it empowers users to craft short, captivating videos across genres like dance and comedy. And in 2024, TikTok is making a big push into shopping, in a bid to take on the likes of Facebook and Instagram. TikTok boasts 150 million monthly active users in the U.S., and more than 1 billion total monthly active users, making it the sixth-largest social media network globally.

For brands, TikTok advertising presents a fertile ground to reach a young, dynamic audience. The platform's advertising campaigns are known for driving targeted traffic, augmenting product sales, and fostering a genuine connection between businesses and the TikTok community. The essence of TikTok advertising lies in its ability to combine promotional content seamlessly with user-generated content, fostering a creative space for brand-consumer interaction.

As we navigate the nuances of TikTok advertising, we'll show how you can harness the platform's potential to elevate your brand's digital footprint, with a focus on understanding cost and value. TikTok's efficient advertising model, coupled with its expansive user base, positions it as a formidable player in the digital marketing arena. And by understanding the seasonal factors driving TikTok ads cost, marketers can discern the insights needed to craft impactful advertising campaigns tailored to this vibrant platform.

Understanding TikTok’s Audience: Tapping into a Well of Engagement

TikTok boasts a younger-learning user base, and it’s become the go-to platform for those seeking entertainment, creativity, and community. That cutting-edge vibe makes TikTok fertile ground for brands aiming to engage with a dynamic, trend-savvy audience.

The majority of TikTok users fall within the 16-to-24 age bracket, a demographic known for its propensity towards digital interaction and online shopping. By advertising on TikTok, brands have a direct conduit to this energetic audience, ready to interact with engaging content. Moreover, the platform's algorithms ensure that well-crafted ads reach the right eyeballs, amplifying the chances of engagement and conversion.

GET SMARTER: 10 TikTok Myths, Debunked

TikTok advertising is not just a route to visibility; it's an opportunity to forge a genuine connection with a demographic that appreciates creativity and authenticity. The relatively lower TikTok Ads Cost, compared to other platforms, coupled with a high engagement rate, renders TikTok an attractive advertising avenue for businesses aiming to make a lasting impression on a youthful audience.

TikTok Ad Formats: Unleashing Creative Potential

Before we get into cost, let's talk about what we're buying. TikTok's ad formats provide marketers with a rich palette of options to craft engaging campaigns. Each format is designed to cater to different marketing objectives, be it brand awareness, engagement, or traffic. 

In-Feed Video Ad: Appears within a user's "For You" feed, offering up to 60 seconds of content that auto-plays with sound on, mirroring the feel of native posts.

TopView: These ads occupy prime real estate at the top of the "For You" feed upon opening TikTok, offering an immersive, full-screen experience for up to 60 seconds, perfect for brand awareness campaigns.

Brand Takeover: These full-screen, high-impact ads are the first thing users see upon opening TikTok, lasting 3-5 seconds, and providing a clickable gateway to internal or external landing pages.

Branded Hashtag Challenge: Engaging users in co-creating content around a branded hashtag, this format includes standard video ads, a featured banner on the Discover page, and a challenge page aggregating user submissions.

Branded Effects: These ads allow brands to design shareable stickers, filters, and effects, enabling user interaction and can be integrated into your Branded Hashtag Challenge for an enriched ad experience. These effects can also have a dramatic impact on your TikTok ads' cost. For instance, TikTok Countdown Stickers—which allow users to set reminders for an event—can drive up engagement rates and drive down the Cost Per Link Click (CPLC). We've seen even more dramatic improvements with TikTok Voting Stickers, which in our tests have nearly doubled engagement rates and cut CPLC by as much as 50 percent. 

How much does TikTok advertising cost?

According to Gupta Media’s Social Media CPM Tracker, the current cost of TikTok ads in March 2024 is $2.89 CPM (cost per thousand impressions). The average cost per link click (CPLC) is $0.23. And the average link click-through rate (LCTR) is 1.24%.

While TikTok ads remain cheaper than ads on Meta’s platforms (Facebook and Instagram), TikTok’s advertising rates are growing at 12.28% year-over-year—growing nearly twice as fast as Meta’s ad rates are rising. 

CHART: Social Media Ad Rates, 2023, using 14-day trailing average CPM for Meta (in blue) and TikTok (in red).

TikTok’s advertising rates fluctuate throughout the year, typically peaking during the Black Friday/Cyber Monday period. The least expensive month for TikTok ads is generally in January. In 2023, Gupta Media tracked billions of ad interactions to calculate the daily, weekly, and monthly average CPM rates for TikTok and other social media platforms for its report on The True Cost of Social Media Advertising. The figures below, taken from the report, show how TikTok’s average CPM changes from month to month during the year:

TABLE: TikTok average monthly ad rates, updated March 2024. To access real-time CPM rates and historic data for TikTok, Meta, YouTube, and other platforms, visit Gupta Media’s Social Media CPM Tracker.

TikTok vs. Meta: Which is better for holiday advertising?

This year, TikTok and Meta are expected to go head-to-head for advertising dollars, as TikTok makes a big push into shopping on the back of new features introduced this year, including TikTok Shop, Video Shopping Ads, and a “High Spending Power” targeting option. In a newly-released report, we found TikTok ads trending between 49% and 53% cheaper than Meta ads during the height of the holiday season. But just because TikTok ads are cheaper doesn’t mean they’re more effective. More sophisticated platforms like Meta and Google still reign during the holidays when it comes to harnessing a powerful algorithm designed to reach the users most likely to make it across the purchasing finish line. 

Chart: Meta (blue) vs TikTok (gold) between November 1, 2022 and January 1, 2023. Source: Gupta Social Media CPM Tracker 2023.

Still, TikTok’s efficient CPMs present an opportunity for smart advertisers: With a combination of the right audience, the right conversion rate, and the right creative—typically native to the platform, and user-generated—there’s an opportunity to save big with a heightened share of spend on TikTok compared to Meta. 

Is it worth buying TikTok ads during Q5?

Recently, both TikTok and Meta have introduced the concept of Q5—a so-called “fifth quarter” of the year—to encourage advertisers to continue spending after the gold rush. Last year, Meta defined Q5 as running from December 18 through January 31, while TikTok offered incentives between December 26 and January 8. 

In 2023, Meta is encouraging advertisers to buy in Q5 because:

• Data shows that during the last week of December, the auction is less competitive resulting in more cost efficient CPMs.
• Engagement and attention on Facebook and Instagram surge, as more devices come online and people have more time to connect with others on social media and be in the discovery mindset.
• Purchase intent is still high, with people still actively celebrating with family and friends or doing some last-minute shopping. 

Similarly, TikTok advised 2023 advertisers that Q5 offers opportunities to:

• Drive efficient CPA's due to reduced competition.
• Capitalize on reduced CPM's to drive mass awareness—TikTok saw a 22% decrease in CPMS in Q5 compared to the rest of Q4.
• [Advertise while] consumers are hyper-engaged. The week after Christmas, TikTok views increased +24% compared to Q4 average. 

Our analysis shows that combining TikTok’s and Meta’s definitions of Q5 yields an interesting sweet spot: CPMs dip between December 18 and the first week of January, offering a potential window for advertisers to unlock holiday value. On TikTok, it’s worth looking at mid-December, when consumers are still in gift-shipping mode, and CPMs are available at a relative discount. 

Campaign Objectives: The Blueprint of Your TikTok Advertising Success

In the realm of TikTok advertising, defining the right campaign objectives is akin to setting a strong foundation for a building. Your objectives are the blueprint that shapes how your campaign is structured and ultimately, how it performs. 

TikTok offers a myriad of campaign objectives tailored to meet diverse marketing goals. Here’s a breakdown of various campaign objectives and scenarios where they might be aptly employed:

Brand Awareness: Ideal for businesses aiming to enhance their brand's visibility and recognition among the TikTok community.

Reach: Suitable for brands looking to maximize their reach to a broader audience within a specified budget.

Traffic: Opt for this objective if your goal is to drive traffic to a website or app.

Landing Page View Optimization: Previously, TikTok traffic campaigns offered only a link-click optimization goal. But with 60% of all clicks on a TikTok video happening within the first 6 seconds, smart marketers may worry about paying for low-quality and accidental clicks. That’s why the relatively new Landing Page View optimization is a game changer. Unlike other platforms, such as Facebook, that require a pixel to track landing page views, TikTok automatically tracks the metric on page load.  

App Installations: Best suited for mobile app developers and marketers aiming to boost app downloads.

Video Views: Choose this if your aim is to garner more views for your brand's video content. Lead Generation: Ideal for brands looking to collect leads for future marketing efforts. Conversions: This objective is tailored for campaigns focused on driving actions such as purchases or sign-ups.

How do campaign objectives impact ad performance?

The selection of campaign objectives is pivotal as it guides TikTok's ad delivery algorithm to find the most relevant audience for your ads. For instance, a campaign with the objective of “App Installations” would be optimized to reach users who are more likely to download apps, thereby enhancing the ad's performance in terms of the desired action. Similarly, a “Conversions” objective would steer your ad towards audiences with a higher propensity to make a purchase or sign-up. Each campaign objective comes with its set of key performance indicators (KPIs) that enable you to measure the success and ROI of your advertising endeavors on TikTok.

Creative Tips at TikTok Ads Creative Center

TikTok's Creative Center is a treasure trove of resources for advertisers looking to elevate their ad creatives. The center provides insights, tools, and guidelines to help you create engaging and effective ads. Here are some key takeaways:

Utilize the Video Editor: TikTok's free online Video Editor allows you to edit your existing assets into TikTok-ready ad creatives, ensuring they align with the platform's unique formats.

Explore Video Templates: For those new to video creation, TikTok provides a range of templates to help you get started on your ad creative journey.

Follow Creative Best Practices: Understanding and adhering to TikTok’s creative best practices is crucial for crafting ads that resonate with the audience and comply with the platform's policies.

Stay Updated on Trends: TikTok Creative Center offers a glimpse into the latest trends, providing a springboard for your creative ideas.

Access Creative Tools: Discover creative solutions that assist in uncovering trends, finding partners, and crafting content tailored for the TikTok community.

The fusion of best practices and creative insights from TikTok's Creative Center can significantly amplify the effectiveness of your advertising campaigns on TikTok. By investing time in optimizing your ads and harnessing the resources available, you are well on your way to mastering TikTok advertising.