Is Buying TikTok Ads Worth It? Is Buying TikTok Ads Worth It?


How far will your marketing budget go with TikTok Ads? Let's find out.

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Jairene Cruz


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TikTok has recently emerged as a powerhouse platform, capturing the attention of diverse audiences worldwide. Brands seeking to infiltrate the robust market of Gen Z and Millennials find TikTok Ads a tempting arena—not just for its massive reach, but for the unique, authentic engagement it fosters.

With its rapid growth and innovative content format, TikTok provides a landscape where ads feel less intrusive and more like a natural segment of the user's scrolling experience.

Confronted with the skyrocketing potential of TikTok for digital marketing, companies are asking the critical question: Are TikTok Ads a sound investment?

Let's delve into the mechanics and outcomes of TikTok's advertising offerings to understand their impact on brand growth and consumer engagement. Join us as we unravel the effectiveness of TikTok Ads and their potential ROI for businesses looking to stay profitable in the digital race.

But first, let's talk about why you need to buy TikTok Ads in the first place.

Overview of TikTok Ads

Buying TikTok ads refers to purchasing advertising space on the TikTok platform. Advertisers can create various ads, such as in-feed videos (Spark or Non-Spark), branded effects, or TopView ads, which appear when users open the app.

The goal is to promote a product, service, or brand to TikTok's vast user base. Advertisers can fine tune their ads based on user behavior, demographics, and more. They bid for ad placements in an auction, and if successful, their ads get shown to their targeted audience.

This process is managed through TikTok's self-service ad platform, where advertisers can also track and analyze the performance of their ads.

TikTok has swiftly ascended to the top of the advertising world, ranking first globally in ad equity. This means it is the most preferred environment for both businesses seeking to advertise their products or services, and consumers looking for new, exciting content.

The platform's unique approach to social media has created an atmosphere that fosters creativity and authenticity, setting it apart from other platforms.

Quick Summary of TikTok Stats

While we will discuss these in depth in this article, here's a quick outline of the major stats advertisers should know about TikTok, as of February 2024:

What Makes Tiktok So Compelling For Advertisers?

From its trend-setting user base to its sophisticated algorithm that keeps viewers engaged, TikTok has become a hotbed for innovative marketing. As savvy marketers and business owners contemplate buying TikTok ads, understanding the platform's reach and engagement levels through statistics is crucial.

Let's explore the unique allure of TikTok that captivates advertisers worldwide.

Download Statistics

TikTok has exploded in popularity, with its creative content capturing the attention of billions globally. This platform isn't just a playground for trends and challenges; it's a burgeoning marketplace for businesses to advertise in a truly impactful way.

The numbers are staggering: according to data from Sensor Tower, TikTok was the most downloaded app globally in 2020, and it maintained a strong performance in subsequent years.

Worldwide, downloads have exceeded an astonishing 4.7 billion times across the App Store and Google Play. The total number of registered users is around 2 billion at the moment.

The app has been downloaded hundreds of millions of times in the top markets such as the US, India, and China (where it's known as Douyin).

According to Statista, the top five countries that downloaded TikTok as of June 2023 are:

  1. Brazil (5.62 million)

  2. Indonesia (4.91 million)

  3. Mexico (3.95 million)

  4. Pakistan (3.59 million)

  5. United States (3.53 million)

The impressive download statistics in these top countries are not merely numbers on a chart; they symbolize an expansive world of potential customers eagerly waiting to interact with your content. By buying TikTok ads, you can strategically tap into this massive, diverse user base, making your brand or product known to a global audience.

Moreover, the platform's Reach & Frequency campaign buying type allows advertisers to control which audiences they reach and how often, enhancing the effectiveness of their marketing efforts.

With such a wide-reaching platform at your disposal, your ads have the potential to transcend boundaries, reaching across continents and time zones to connect with consumers worldwide.

Important note: The caveat, though, is that you cannot really advertise to users worldwide — you are only allowed to target users from a specific region, and this is all based on the country where your account is registered. To know more about which countries you can target based on your business location, click here.

Large And Diverse Audience Base

This social media platform is bursting with creativity and youthful exuberance, captivating nearly 2 billion users worldwide. This vast audience offers small and medium-sized businesses (SMBs) an excellent opportunity to expand their reach.

But who exactly are these TikTok enthusiasts?

Gender Distribution

TikTok's user base is diverse in terms of both gender and age. The gender distribution is almost equal, with women representing 48% and men 52%. This variety allows businesses to connect with a broad demographic.

Age Distribution

Age-wise, TikTok appeals largely to the younger generation. A significant portion of TikTok's user base based on age resides within the 10-19 group, with 32.5% of its users in this age, and 29.5% aged between 20-29, reflecting its appeal to the newer generation who avidly create and consume content.

However, an increasing number of users fall into older age brackets—16.4% are 30-39 years old, 13.9% are 40-49, and 7.1% are over 50, indicating a growing trend where TikTok's user base is progressively aging.

This shift presents a compelling opportunity for advertisers to broaden their reach and tailor their marketing strategies to a more diverse age range. TikTok is not just for teenagers, after all!

In the United States, where this platform is highly popular, the most significant segment is aged between 10 and 19 years, comprising 25% of American users.

Indeed, almost half of TikTok users are under 30, making it a valuable platform for SMBs aiming at a younger market.

Yet, older age groups aren't left out. A significant 32.5% of US-based TikTok users are aged 20-29, 16.4% fall into the 30-39 bracket, while those aged 40-49 and 50+ account for 13.9% and 7.1% respectively.

Engaged Audiences

Beyond sheer downloads, the average time spent on TikTok reveals how engaged users are.

Reports indicate that users can spend an average of 95 minutes per day (worldwide) scrolling through a mix of dancing, comedy, and informational videos – a level of engagement that rivals even the most established social media platforms.

Americans spend around 82 minutes in TikTok, as of the second quarter of 2022.

While it ranks second to Instagram when it comes to daily open rate (29% to Instagram’s 39%), TikTok’s usage time dominates.

Variety of Short and Long Form Content

TikTok initially gained notoriety as a pioneer of short-form content, capitalizing on the trend of users' decreasing attention spans. With a snappy 15-second video standard, creators quickly mastered the art of conveying stories, showcasing talent, or marketing products in a concise format.

However, as the platform evolved, it embraced longer forms of entertainment, expanding its maximum video length to three minutes.

This shift has given creators and marketers alike the flexibility to dive deeper into their subjects, create serialized content, and explore new storytelling techniques while still benefiting from the platform's high engagement rates.

This deep integration into users' daily routines presents an unparalleled opportunity for brands to capture attention and create lasting impressions.

Proof of this is the fact that TikTok ads stand out with an impressive Engagement Rate (ER) ranging from 5% to 16%, towering over platforms such as Facebook, which sees an ER of just 0.09%, and Instagram, with an ER of 1.22%.

The average engagement rate across all industries for TikTok Ads is 5.38%.

This significant difference highlights TikTok's superiority in capturing audience interaction and sustaining their interest.

Data from Rival IQ and Social Insider

Users that Turn to Consumers

To top it off, people on TikTok are not just scrolling passively; they're actively engaging with the content they see. This engagement translates into action.

TikTok users are 1.5 times more likely to purchase based on something they discovered on the platform. This figure demonstrates the direct impact TikTok ads can have on driving sales.

But it's not just about the likelihood of immediate purchases. TikTok also offers a unique platform for advertisement content. In fact, according to Nielsen Custom Authenticity Study commissioned by TikTok, 68% of users believe that the ads on TikTok to be distinctive or different from what they see on other platforms.

This uniqueness gives brands the freedom to be more creative and authentic with their advertising, resulting in ads that are not only more engaging but also more memorable.

This is also one of the top reasons why TikTok Ads is worth the spend.

Good Targeting Options

When considering whether buying TikTok ads is worth it, one of the most compelling reasons to say yes lies in the platform's robust targeting options. These options allow businesses to reach their ideal customers more precisely and effectively.

  • Demographic

Firstly, TikTok's demographic targeting makes it possible to zero in on users based on age, gender, or location. This enables brands to tailor their message to the audience most interested in their products or services.

And when it comes to location, in some countries, you can pinpoint narrower areas such as provinces, cities and districts.

  • Interest

TikTok offers interest-based targeting, which allows advertisers to reach users interested in specific topics related to their business or products, or maybe just topics whose audiences are receptive to what’s being promoted.

Whether you're a fitness brand targeting workout enthusiasts or a bookstore reaching out to avid readers, this feature can significantly improve your ad's relevancy and effectiveness.

  • Behavior

TikTok's behavior-based targeting option lets advertisers target users based on their actions on the app, such as:

  1. Purchase intention

  2. Video interactions

  3. Creator interactions

  4. Hashtag interactions

This helps advertisers to connect with users who are likely to engage with their brand.

Other targeting options include Spending Power, Device, Operating System, Browsers, and Carriers.

TikTok's powerful targeting options make it a worthy investment for businesses aiming to reach a specific, engaged audience. It's not just about getting your ad seen; it's about seeing it by the right people.

Budget-friendly Platform

Unlike other platforms that require high production values for advertising, TikTok thrives on raw, unedited videos. This feature allows small and medium-sized businesses to create effective ad campaigns without a massive budget.

Even the edited ones make use of non-professional editing tools that TikTok itself has to offer, and other video editing apps.

On top of that, it doesn’t cost an arm and a leg to run ad campaigns there. Let’s talk more about this in the next section.

Cost of Running Ads on TikTok

The potential for business growth with Tiktok Ads is vast, but navigating the costs can be akin to learning a new dance. To strike the right chord with your budget, it's essential to master the beat of TikTok's unique cost structure.

Here's your insider's rhythm to keeping pace with the essentials of TikTok ad expenses, ensuring your marketing dollars hit the right notes.

CPM, CPC, and CPA Bidding

When diving into the world of TikTok ads, advertisers are primarily met with three cost-efficient bidding options: CPM, CPC, and CPA.

CPM refers to Cost Per Mille, or Cost Per Thousand Impressions, charging advertisers for every thousand times their ad is viewed. This model is often favored for increasing brand visibility and reaching a larger audience.

On the other hand, CPC, which stands for Cost Per Click, is the amount you pay each time a user clicks on your ad, making it a great option for driving direct engagement or traffic.

Finally, CPA stands for Cost per Action or Cost per Acquisition, which means your campaign is optimized so that you reach your target CPA.

All three models hold unique advantages, and selecting the right one hinges on your campaign goals and target outcomes.

  • CPM

This model is ideal for brands aiming to maximize reach and ensure that their content appears before as many eyes as possible. In the vibrant ecosystem of TikTok, where visual content reigns supreme, targeting a vast audience can significantly amplify brand visibility.

Advertisers flock to the CPM model to get more viewers on their ads, which in turn can lead to higher engagement and potential viral success. On TikTok, the self-run advertising campaigns predominantly utilize CPM due to its simplicity and effectiveness in measuring how often ads are seen. This translates to the fact that, with CPM bidding, brands gain the power to scale their visibility efficiently.

The platform's minimum CPM starts at only $0.50, making it an accessible entry point for businesses of all sizes. However, competition and targeting filters can drive the price upwards.

As of February 2024, the average CPM in the platform is said to be at $10.

  • CPC (Cost Per Click)

This model suits campaigns focused on specific actions or conversions, such as app promotions, lead generation, website conversions, and product sales. When employing CPC, you directly link your advertising costs to the level of user engagement with your call to action, making it a highly accountable and performance-oriented pricing strategy.

The minimum cost cap you can set per click is $0.02 when you choose to optimize based on clicks, providing an affordable starting point for advertisers. Nonetheless, the exact cost may vary depending on the audience targeting settings you select, as competition for more desirable or specific demographics tends to increase the CPC.

The average CPC for TikTok Ads currently stands at $1.

  • CPA (Cost Per Action)

CPA, or Cost Per Action, is a newer bidding model introduced by TikTok that charges advertisers when a specific action is completed. This could include anything from app installs to leads to website conversions or product sales.

This bidding option gives businesses greater control over their ROI and allows them to track the return on their ad spend more accurately. This can be done by choosing to optimize based on conversions and then applying a Cost Cap per conversion.

The billing event will show as Optimized CPM.

The average CPA for TikTok Ads depends on the country, but it typically falls between $7 to $20.

Average Ad Costs by Industry

A closer examination of TikTok ad expenditures showcases that costs can differ significantly across various industries. This is largely influenced by audience demand and competition within these sectors.

Make sure you consider these when evaluating whether TikTok Ads is for you or not.

  1. Alcohol Industry: CTR: 0.18%, CPC: $0.5, CPM: $8, ER: 18%
  2. Fashion Industry: CTR: 0.25%, CPC: $0.8, CPM: $12, ER: 15%
  3. Financial Service Industry: CTR: 0.1%, CPC: $1.5, CPM: $15, ER: 8%
  4. Food & Beverage Industry: CTR: 0.32%, CPC: $0.6, CPM: $9, ER: 16%
  5. Health and Beauty Industry: CTR: 0.32%, CPC: $0.7, CPM: $11, ER: 15%
  6. Home Decoration Industry: CTR: 0.15%, CPC: $0.4, CPM: $6, ER: 12%
  7. Retail Industry: CTR: 0.25%, CPC: $0.8, CPM: $12, ER: 15%
  8. Sports Teams Industry: CTR: 0.32%, CPC: $0.6, CPM: $9, ER: 16%
  9. Tech & Software Industry: CTR: 0.28%, CPC: $0.9, CPM: $11, ER: 14%
  10. Travel Industry: CTR: 0.15%, CPC: $0.4, CPM: $6, ER: 12%

Source: MegaDigital

Budgeting for Ads

Managing your budget for TikTok ads effectively involves choosing between two budgeting options: the daily budget and the lifetime budget.

To exert control over your advertising expenses, setting a budget at both the campaign and ad group levels is essential. However, it's important to decide upfront which type of budget to utilize, as it's not possible to switch between a daily and a lifetime budget once the campaign is live.

  • Daily Budget

The daily budget is the maximum amount you're willing to allocate each day for your ads, allowing for consistent spending over time. The minimum spend for campaigns is $50, and for ad groups, a daily floor of $20 is mandatory.

  • Lifetime Budget

The lifetime budget defines the total amount earmarked for the entire duration of your campaign, ensuring that spending is spread out over the scheduled days. The minimum is $50 per campaign as well. When calculating a lifetime budget for an ad group, multiply the minimum daily spend of $20 by the number of days the campaign will run.

For optimal budget utilization, we recommend going for the daily budget. With this, you can increase the amount you want to spend with relative ease (no need to compute, as opposed to when having a lifetime budget).

Also, you can easily scale when using daily budget in case your campaign shows some promise. You can either scale gradually or follow the Surf Scaling technique. Read our article on Scaling Techniques to learn more.

Costs Involved in Ad Creation

Beyond bidding and budget management, let's not overlook the creative costs of video production for your TikTok ads. These aren't just side notes; they're the melody of your ad's success!

Crafting visually captivating and thumb-stopping video content is the core of any TikTok campaign, but good beats come at a cost.

There are three ways to get a video ready for your Tiktok Ads, and these are through:

Professional Ad Production

Investing in professional ad production can be a game-changer for your TikTok campaigns. The cost can vary wildly, often swinging from a few hundred dollars for a freelancer to north of $5,000 for top-tier talent or agencies.

A hunt through Google reveals that, on average, businesses might shell out anywhere from $300 to $5,000 on a professionally produced video, depending on the creators' experience and the complexity of the project.

Think about it – these aren't just any videos. We're talking eye candy – the kind that stops those thumbs from scrolling and gets folks excited about your brand.

DIY Video Creation

Creating ads in-house isn't just about cost-saving; it's about injecting authentic personality into your brand. Rolling up your sleeves and diving into DIY ad creation can be immensely rewarding, especially when you see your own handcrafted content connect with your audience.

Many ads are those that look user-generated—like they are not meant for ads but rather for connecting with the audience alone. This gives your ad an authentic look that sometimes performs better than highly polished videos.

But it's not just about hitting 'record' on your smartphone. Plan your shoots with precision, storyboard your ideas, and keep your messaging clear and catchy.

For editing, there's a myriad of affordable or even free tools like InShot, Adobe Premiere Rush, or Canva that come loaded with features to give your ads that professional polish. However, don't wave off the fact that these tools might require a bit of a learning curve and potential costs for premium features.

Don't underestimate the power of good lighting and clean audio, either. Investing in a basic ring light and a decent microphone can vastly enhance the quality of your footage. And remember, top-notch advertorial content is as much about sound and visuals as it is about convincing copy.

Lastly, time is the invisible cost. Filming and editing take dedication, so remember to account for this.

Emulate Your Competitor's Videos

If you don't have the budget to hire professionals, nor the time to create your own video ad by yourself, then why not utilize the videos of top-performing Tiktok ads?

You can search for them manually, or you can use a TikTok Ads Spy Tool. These innovative platforms are akin to having a secret agent in the world of advertising, providing deep insights into what's working for the competition.

Spy tools not only reveal the most effective ads in your niche, but allow you to dissect their success. You can see the intricacies of targeting settings, scrutinize the ad text, and study the landing pages that are converting the most.

With tools like Anstrex, you now have the capability to download actual competitor videos directly from TikTok, providing a tangible blueprint for your campaign's success.

Imagine the edge you'd have by replicating proven strategies – it's like standing on the shoulders of ad giants.

Investing in Anstrex InStream, available at a cost of just $69.99 per month, is a strategic move that could position you well ahead of the curve, ensuring that your TikTok ads resonate with your target audience and yield the intended conversion outcomes, all while ensuring optimal use of your ad budget.

If you want to see if this tool is right for you, try it out first with the free plan. Learn more here.

Wrapping Up

As we've navigated the ins and outs of TikTok advertising, it's clear that the platform's unique fusion of virality, user engagement, and creative latitude presents a marketing playground ripe with potential.

Don't allow your brand to lag behind in the digital realm. Embrace TikTok's vibrant advertising platform to thrust your message into the spotlight and see your investment pay off.

Is buying TikTok Ads worth it right now? A big fat YES!

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