TikTok Ads for Customer Acquisition: A Deep Dive

Right Side Up recently hosted a webinar on the current state of TikTok and best practices for achieving success with TikTok ads for customer acquisition. It was led by Kyra Richards, a member of the Right Side Up project strategy team as well as one of our senior performance marketing consultants who has spent more than $400M on paid social channels. Watch the full webinar for more TikTok insights from our experts.

TikTok isn’t just for Gen Z anymore. Although the platform began as a darling of youth subculture, it has experienced unprecedented growth over the past few years, cementing itself as a staple of mainstream media and offering lucrative opportunities for performance marketers. But before you jump into this channel and use TikTok ads for customer acquisition and to scale your business, you must first understand who is on the platform, how they’re using it, and where TikTok is headed.

What’s Happening with TikTok Today

Since its launch in 2016 (late 2017 for markets outside of China), TikTok’s growth has exploded. It hit 1 billion monthly average users in Q4 2021, making it the fifth largest social platform in the world. While TikTok was originally embraced by Gen Z and younger audiences, its stratospheric growth has driven the platform to become more mainstream, with only 25% of users under 19 today. This broader, increasingly diverse audience is creating opportunities for more brands to incorporate the platform into their marketing strategies. 

Source: Data Reportal

How and why TikTok is being used

As performance marketers, it’s important for us to understand both how and why people are using a platform before we can develop a strong paid strategy for that platform. We must also be deeply in tune with the mindset and motivations of people as they interact with it. For TikTok, the majority of people using the platform simply want to be entertained. The sound-on, immersive experience of consuming short-form videos captures and holds our short attention spans, with the average user spending 95 minutes on TikTok daily. Creators are able to hold this attention through genuine and authentic content, which, to the user, feels like hanging out with friends or being behind the scenes. There’s also a lot of trendsetting that takes place on the platform. As a result, users feel comfortable using TikTok as a platform for discovery—discovery of new content, new brands, new products. In fact, a recent Nielsen study found that an overwhelming average of 85% of TikTok users discover new content that they enjoy through the TikTok platform. For performance marketers, this is pure gold.

Increased use leads to increased spending

We know that TikTok use is way up, which is great for marketers because it offers us a wide audience to tap into. But what’s even better? Consumer spending on TikTok has also increased rapidly. After the roll out of iOS 14 in April 2021, a gap was created in the paid social ad market. TikTok took advantage of this opportunity through:

• Increased hiring for the ads business across engagement, measurement, and sales (nearly doubling the headcount on their advertising product and technical teams in 2021)
• Emphasized organic campaigns to increase buying behavior on the platform (remember #tiktokmademebuyit?)

This smart strategy has led TikTok to see increased consumer spending each quarter since the release of iOS 14.

Source: MoneyTransfers.com

Understanding the challenges of TikTok’s algorithm

The quick growth of the platform means that TikTok has an incredible reach, but its ad serving algorithm is still trying to catch up to Meta, which typically results in a longer ramp up period for your ad campaigns. Traffic quality often starts low and gets stronger over time. TikTok’s algorithm has been trained by organic content to serve people content they’re likely to consume (watch through or repeatedly), so it has a great gauge on what people are interested in, but it’s still learning to better predict outcomes like purchases or leads.

Are You Ready to Add TikTok to Your Marketing Strategy?

TikTok has seen massive growth and solidly increased consumer spending patterns—but does it make sense for your business? Here are a few things to consider before diving in.

Product-channel fit

To find success with TikTok ads, you’ll need to make sure your product and audience fit with the platform’s users and creative format. If you can answer ‘yes’ to the following questions, it’s likely worth exploring this channel:

• Do you have a product that can show an authentic visual payoff?
• Does your product solve a problem for someone?
• Do you have creator content or are you willing to get it?
• Does your product align closely with a TikTok subculture? (Hint: Organic hashtag research can help identify this.)

Even if you don’t have a visually pleasing product, you can be creative with your approach, like using customer testimonials or use cases with a floating logo or other visual cue that ties in your brand.

Diversification timing

In addition to determining whether TikTok is the right channel for your current business needs, you should also decide if now is the right time to diversify your marketing mix. In general, there’s nothing wrong with diversification for the sake of diversification. Expanding your channel mix is perfectly valid, especially given the volatility we’ve seen with Facebook CACs this year. More specifically, it’s smart to consider diversifying if you’re seeing diminishing returns on other channels. While a channel like Facebook might outperform TikTok on the first dollars you spend on the platform, at a certain point the balance will shift in favor of other channels. 

Capacity for testing

The last big thing you’ll want to consider is your ability to test into a new channel. Based on your company’s current budget, resourcing, goals, and culture, how easy will it be for you to test, learn, and optimize your TikTok ads? And how quickly can you ramp up or exit (if needed)? TikTok’s distinct creative needs and longer learning periods make this platform more challenging to test than other social platforms, however, it’s still easier to test into TikTok, which allows you to buy directly from the platform, than channels like direct mail, which require third-party participation.

It’s important to keep in mind that you can’t just pull creative content from Meta or Pinterest and expect it to perform on TikTok—you’ll need to allocate resources to generate new assets specifically for this platform. (Note: TikTok creative does tend to perform well on Meta and Pinterest, so it’s possible to repurpose assets away from TikTok but not into TikTok.)

Testing budgets and timelines

Like all channels, there’s no one-size-fits-all answer to how much you should spend on testing or how long it will take to see results. It depends on your business, product, company size, and goals. Your testing objective should be to get a line of sight to your target CAC and ROAS while minimizing the cost and time needed to do so. Remember to give the platform (and yourself) enough time and ad spend to test, learn, and optimize—we find that most brands need about 6–7 weeks of testing before seeing success. You need sufficient conversion data to identify patterns of what's working and what's not. 

Here are a few things to consider when thinking about testing budgets and timelines:

• What is your conversion event—transaction, lead capture, app install?
• How long is your sales cycle?
• How targetable is your audience?
• How much user data does the ad platform have to correlate impression with conversion, and how sophisticated is the targeting algorithm?

In terms of budgeting, most consumer product companies will need to spend $50K/month for 3–4 months to see a positive trend. And if you choose to spend less than that, be aware of the risks—lower budgets may get you the performance you’re looking for, but could also produce a false negative.

Regardless of whether you’re ready to add TikTok to your mix, this is a platform you should keep your eye on. TikTok is growing and changing quickly so even if it’s not something you can tackle right now, it could be a great option in the future.

Setting Up a Successful TikTok Test Campaign

Getting the best results from your test campaign requires a careful understanding of the different levers involved. If one part of your campaign is broken or overlooked, you’re not going to see the results you want.

Rely on reps for your account structure

TikTok’s reps are much more hands-on than what you might have experienced with Meta or other platforms. Reps typically supply a full-funnel media plan that consists of three layers:

• Top of Funnel—6 Second Video Views
• Middle of Funnel—ATC or Initiate Checkout
• Bottom of Funnel—Complete Payment (Purchase)

Reps will tailor your plan based on the monthly budget that you indicate. If you don’t give them a number, reps often recommend a spend of $3,500+ per day, but you probably don’t need to spend that much. We recommend most companies start at $50K/month.

Remember that performance at every point in the funnel tends to be poor at first. CPAs 10–15x your target is not unusual even after a week or two.

TikTok’s algorithm takes much more time to learn and the entire pixel ecosystem isn’t nearly as well seasoned as Meta. Trust the process and take guidance from the reps—they have valuable insights about how to make TikTok work for you.

Here are a few tips for configuring your campaign:

• Don’t use CBO unless you have more than three ad groups in a campaign.
• Uncheck Pangle and Premium News placements (you want TikTok Feed only).
• In ‘advanced settings’ uncheck ‘video download’ to make it harder for competitors to steal your content.
• In ‘advanced settings’ uncheck ‘user comment’ unless you really want them. (A word of warning: If your ad gives off boomer vibes, you will be mercilessly ripped apart in the comments.)

Keep your targeting broad

TikTok’s ad platform offers both manual and automatic targeting. With manual targeting, reps will almost always suggest using broad audiences, even when it may feel counterintuitive. This approach typically works best and just requires trust and patience in the algorithm. For certain companies, there are free, premium Whitelist audiences that perform well (e.g. Food & Drink).

Automatic targeting on TikTok is similar to doing AAA on Meta; you just choose the country and nothing else. We’ve found that performance can be hit or miss with this approach, but when it hits, it makes the job of the media buyer much much easier.

Unlike other platforms, it doesn’t seem like audience testing is currently a big factor in successful campaigns when it comes to TikTok. And don’t forget that TikTok’s targeting features are always changing, so keep an eye out for new tools that could unlock better performance for your campaign.

Automatic bidding is best (for now)

There are options for automatic and manual bidding on TikTok, but the platform’s manual bidding process is not currently evolved enough to present any significantly useful opportunities. Spend volatility (hour to hour and day to day) is an issue with a manual approach and spend can easily vary 90% DoD, or have key hours with zero spend.

You’ll likely want to stick with automatic bidding until the bidding and delivery engine on TikTok matures. For most people, auto bid (“Lowest Cost”) is the way to go. There is one exception where manual bidding can be useful: You have a specific time window within which to run ads intraday (e.g. insurance lead gen/affiliate campaigns) and a huge budget to spend in that window.

TikTok recently rolled out a new product that offers reach and frequency campaigns. As with Meta, these campaigns are strictly for awareness and brand lift objectives, not for conversions. And although this feature isn’t useful for conversions, it does provide some of the lowest CPMs you’ll see anywhere.

Optimization is all about patience

For TikTok campaigns, creative is the most important piece, so the first metrics to look at are average view times, including: 

• Average view time per impression: Dwell time of each ad is shown
• Average view time per viewer: Total average view time including people who rewatch, swipe down then back up to restart, etc.

The bigger the difference is between your per viewer and per impression metrics, the more people are rewatching your ad. In general, anything over :05–:06 seconds is solid for per impression and anything over :06–:07 seconds is good per viewer.

For the first 4–6 weeks of your campaign, optimization will be focused on gathering learnings to move down the funnel. During this time, you should:

• Not expect great CPAs anywhere near launch
• Continue to add creative (via TikTok Creator Marketplace (TCM), influencers, in-house shoots etc.)
• Follow the media plan supplied by account reps
• Only move to the next event in your funnel after a few hundred events per point in the funnel are gathered

Let the experts handle attribution and measurement

Understanding how to accurately measure TikTok ad performance is crucial for determining the success of a test campaign. To do this, you’ll need to have the right technical resources and personnel in place. Attribution shouldn’t be your media buyer’s job, especially for TikTok—the growth marketers with the best TikTok advertising chops tend to be creative strategists with an eye for numbers, not measurement specialists. Hiring an expert to handle attribution will give you the confidence you need to make important diversification and budget allocation decisions. And make sure to hire the right person (most likely a developer) to install your pixel correctly to avoid any confusion down the road.

Creative Best Practices for TikTok Ads

Everything we’ve covered so far is important, we promise. But in practice, it probably drives less than 10% of performance. The overwhelming majority of your performance is dependent on your creative strategy, coordination, and vision. So how do you create magic on TikTok?

Your ad shouldn’t feel like an ad; it should feel like someone sharing a life hack with a friend through a TikTok frame of reference. In other words: Don’t make ads, make TikToks.

You’ve probably seen the rise of user-generated content (UGC) on Meta over the past few years and TikTok requires the same sort of DIY-creative-authentic ethos, combined with tried and true direct response advertising principles, to generate conversions. The content needs to feel human and down to earth, but that doesn’t mean it necessarily needs to look cheap. Big budget content can resonate well, but once it feels inauthentic users are more likely to swipe away.

Using trending sounds in TikTok ads

When done correctly, TikTok ads that feature trending sounds can win you points with the platform’s algorithm and keep your product stuck in users’ heads (along with the trending sound). Because the sound is doing some of the heavy lifting, these ads can be quite simple, for example, mapping your product benefit or story to the beats or rhythm of the song. And while these types of ads are simple, you need to have a freelancer or existing team member who is incredibly dialed into TikTok trends and culture to hit the mark and not look corny.

Direct response TikTok ads

Direct response ads can drive results if you focus on four main components:

• Hook—This should capture attention through self interest, news, or curiosity.
• Product—Here’s where you share details about your product’s benefits or impact.
• Belief—Emphasize the unique solution your product provides compared to the competition. Viewers should believe that this is the only product that addresses their pain point.
• CTA—Close with a TikTok-specific offer. TikTok conversion rates tend to run lower, so give yourself an edge by creating a “TikTok10” discount code or something special for the platform.

If you’re not sure where to start with structuring your direct response TikTok ad, we’ve found success with the following formats and narratives:

• “_____ That Actually Work,” that highlights three product benefits, followed by an offer
• “My _____ Routine,” featuring an embedded product mention, direct product benefit, and an offer
• “TikTok Made Me Buy It,” focused on three product benefits, then an offer
• “Here’s What I Ordered…and What I Got,” that shows product benefits, followed by an offer

Editing considerations and required components

The fast-scrolling, never-ending-content nature of TikTok lends itself to quick cuts and fast narrative pacing. But how fast is too fast? Aim for cuts that are an average of 1.5–2.5 seconds. Anything faster than that seems frantic and anything longer than three seconds gets boring and feels out of place on the platform. Shorter cuts tend to work best for product shots from multiple angles (ecommerce) or screen captures (mobile apps).

Along with the right editing pace, there are a few content requirements and components that you’ll want to consider:

• Text overlays are critical at the beginning of the video to emphasize the hook, during each product benefit, and on the CTA screen with your product name and URL.
• Subtitles, presented as small overlays, can be used in lieu of native TikTok auto-generated captions to help make your main messaging more memorable.
• Music doesn’t necessarily need to be a trending sound, but you should have some audio component in your ad. Note: There is a checkbox regarding legal permission for popular music. Tick at your own risk (most advertisers check this without having permission; we can’t recommend doing that, but TikTok won’t stop you).
• Voiceovers should be recorded separately and close enough to the phone to ensure high quality audio.
• Ad captions should be kept under ~30 characters. Longer adds an extra line of caption text, which pushes the page name/caption higher up on screen and eats into your visual real estate.

How to (Actually) Get TikTok Creative Made

We’ve covered how important creative is to the success of your TikTok campaign. And we’ve also stressed the importance of knowing what you’re doing to design your creative correctly. So what do you do if you (or your team) don’t personally eat, sleep, breathe, and scroll TikTok? 

Meet the TikTok Creator Marketplace. This database is full of TikTok creators that are open to band collaborations and ad content creation. Registered LLCs and corporations can invite 100 TikTok creators per week to collaborate and create paid assets for their brand. 

There are many opportunities and risks involved in the TikTok Creator Marketplace process—if you need help sorting out how to maximize your experience, we can help.

Drafting an influencer creative brief

To get the best results from the Marketplace, start with a solid creative brief. This will help ensure that you and the creators are on the page regarding what assets you’re looking for and how they can align with your existing brand and messaging. Your brief should include the following components:

• Brand guidelines, tone of voice, and visual collateral—typically, this is a 4–5 page, easy to read document
• Comprehensive list of do’s and dont’s for creative best practices, platform-specific requirements, captions, and guiding principles to help creators produce ads that are designed for conversion first
• Confirmation that creators are going to get paid—this will increase enthusiasm and compliance

Tracking influencer outreach

TikTok’s TCM feature allows you to track your outreach each week to your 100 creators, along with each creator’s responses, scripts, shipping addresses, video submissions, and review status. Within this tool, you can tag coworkers and brand stewards for asset approval, while also linking to Marketplace profiles for easy access and streamlined reviews. 

And finally, there is a lot of back and forth involved in this process with creators. Be prepared to have your inbox flooded with lots of messages and repeated questions. Tip: Templatize your response and save repeat answers to streamline your workload.

Staffing for TikTok Ad Campaigns

The last piece of the TikTok ad puzzle is building the right foundational team to understand your test results and optimize based on those learnings. There are a few core areas where you’ll need coverage when launching on TikTok. For some companies, this will be handled by one person. For others, it may be four independent positions. 

Here’s what you’ll need:

• Someone who is extremely well-versed in the platform; usually this will be the ads specialist (they should be involved in as much of the process as possible and they will be your guiding light of what tends to work on TikTok)
• Someone to set your creative strategy for the platform and build concepts to brief the creators on
• A creator manager, who is responsible for finding creators (may be split with media buyer/strategist roles), contracting, briefing, project managing through feedback rounds and posting, and maintaining the relationship after deliverables are met
• Depending on your creators, you may also need someone to edit their videos before running them as ads

And when you identify a gap in your current resources, you can tap us in.

Do you want to increase conversions and scale your business with the help of TikTok ads? The experienced team at Right Side Up can help you create a winning strategy or improve on what you’re already doing. Contact us at growth@rightsideup.co to get started.