How Does Advertising on TikTok Work? (2024)

TikTok is growing rapidly in popularity. Although it existed before its 2018 integration with Musical.ly, it was virtually unknown in the West. Since then, it has skyrocketed up the app download lists.

By late 2019, TikTok had reached around 800 million monthly active users worldwide. This is a massive increase from the 100 million of Musical.ly at the time of the merger. It has nowpassed 1.5 billion downloadsworldwide on the App Store and Google Play.

With this rise in popularity, it should be no surprise that marketers are clamoring to advertise on the platform. Until recently, this had to be through a relatively informal process, but TikTok has finally realized its potential to take a cut of this and introduced a formal TikTok advertising platform.

How Does Advertising on TikTok Work?:

What is TikTok?

We have written extensively about TikTok in the past, including our white paper, The Ultimate Guide to Marketing on TikTok, that you can download for free.

TikTok is a video-based social media app where users can upload short videos and share them with their friends. The earliest users used TikTok and Musical.ly to lip-synch to popular music videos, and that is still TikTok's most popular video genre. However, many TikTok users have become more creative with their video-making, and you will now find a broad range of video types.

As with other social video apps, such as YouTube and Twitch, most TikTok users probably spend their online time scrolling through other peoples' videos, watching those that attract their attention. However, TikTok has made it easy to upload videos, so quite a few of its users have had a go at making and sharing videos for their peers.

Demographics of TikTok Users

TikTok predominantly attracts a youthful audience. Most TikTok users are under 30, with 41% of them aged between 16 and 24. While a few of the early TikTok followers probably still have accounts in their 30s, you don't see many "old people" on the platform.

With most TikTok fans’ introduction to the platform being karaoke-like lip-synch videos, it is not overly surprising that TikTok has more female followers than males. You could argue that guys of this age are more likely to follow their favorite gaming streamers on Twitch or sports stars on YouTube than they are to share music videos with their friends.

This makes TikTok ideal for any brand that targets young women and teenage (or even more adolescent) girls. But don't write the boys off totally. There may be fewer males on TikTok than females, but they are still a sizeable minority group.

How Brands Can Market and Advertise on TikTok

Run a TikTok Profile with Valuable Content

If you run a suitable brand, you could create a TikTok profile, share content, and build yourself an audience.

In all probability, this is harder to achieve than on more traditional platforms such as Facebook, Instagram, or Twitter. TikTok's young audience is not interested in brands; they just want fun, exciting, sociable content. They have no reason to watch commercials for your products. If you intend to run a TikTok profile, you will need to take a long look at the types of content that your target audience loves and share similar types of video clips.

Pay for TikTok Ads

It took TikTok some time to get their act together, but they now have a formal advertising program enabling brands to create paid ads on TikTok. Of course, you will have to be smart with your ads on this platform – TikTok’s users are going to be harder to please than those on most other social sites.

Work with Influencers

The traditional method for marketing on TikTok has been influencer marketing. In many ways, TikTok is the perfect app for working with influencers. There are quite a few much-beloved stars on the platform, who can genuinely sway their audience's views.

TikTok is Trialing Shoppable Videos

TikTok is currently testing shoppable ads, similar to the types now available on Instagram. They are currently only available to a few select influencers, but hopefully, TikTok will allow more widespread access soon.

With these posts, influencers can add shopping site URLs to their TikTok posts.

Steps to Creating an Official TikTok Ad Campaign

Assuming you aren’t paying a TikTik advertising agency to do most of the work for you, here are the steps that you should follow.

Create a TikTok Ads Account

You need to begin the process by setting up an Ads account at TikTok. If you haven't already done so, then you trigger the account set-up process by clicking on Create an Ad on the TikTok Ads home page. This will ask existing advertisers to log in to their accounts or take new advertisers through the process of setting up an account.

Campaigns vs. Ad Groups vs. Ads

TikTok structures its advertising into a hierarchy involving three layers:

• Campaigns

TikTok ad campaigns are similar to any other ad campaigns. They are a series of ads that you make and share that combine for a common purpose. For instance, a gaming company may release a new game, and create a campaign on TikTok to help with the release of the game. An ice cream company may choose to create a campaign with a mix of ads to promote a particular product on sale over this summer.

TikTok requires you to set yourself a specific advertising objective for each Campaign.

• Ad Groups

Ad Groups are the next level down from the Campaign. They can be a particular combination of ads for which you set the same target audience, placement, and bids. You can include multiple ads in each Ad Group, and numerous Ad Groups in your Campaign.

Brands often use Ad Groups to target different groups of people. For instance, a film studio could create a Campaign to promote a new movie on TikTok. They could then set Ad Groups for different groups of consumers. For example, they may have separate Ad Groups for males and females and customize the ads they share for each group. Another possibility would be to create different Ad Groups for each region where the film is released, with advertisem*nts tailored to show local screening times.

• Ads

The ads are the copy visible to the users. Every variation on an overall theme is technically a different ad, and these can combine to make Ad Groups.

Make a TikTok Ad Campaign

Once you log in to your TikTok Ads account, you can begin the process of creating your TikTok advertising campaign. You go through the following steps to create each Campaign:

1. Click the “Campaign” tab at the top of the page
2. Click on the Create button
3. Select a Campaign goal
4. Name your Campaign
5. Decide on your Campaign budget

Selecting Your Campaign Goal

For TikTok to optimize your Campaign, it needs to know the purpose of your advertising. What are you trying to achieve?

You have three options:

1. Traffic
2. App Installs
3. Conversions

This step is critical. You need this to match your business goals.

Determining Your Campaign Budget

You can choose to select either a Daily Budget or a Total Budget for your Campaign. The latest TikTok help files suggest that they have now reduced their requirements for minimum spending to be $50 for both the total and daily budget and $20 per day for an ad group. TikTok adjusts your ad bids to ensure that you don’t exceed your daily or total ad budget amount.

Creating Ad Groups and Placing Them

At this point, you set the placement details for at least one Ad Group – a group of ads that you will promote to a specific group of people. You can repeat this as many times as you need to cover all your intended audiences.

TikTok gives you two methods for ad placement:

1. Automatic placement – you leave it to TikTok to optimize your ad delivery across TikTok and its related apps (TikTok, Vigo Video, TopBuzz, BuzzVideo, and NewsRepublic)
2. Select placement – you select the apps where you want your ads to appear

If you chose App Installs as your campaign goal, you are now asked to give details about the App Stores where you wish to send people to download your app. In the case of a Traffic objective, you are asked for information on the website to which you hope to send traffic.

Targeting

One of the best features of TikTok Ads is that you can clearly define the target audience for your Ad Group. This supposes that you understand the interests and behaviors of the people that you hope to target. You can even create Lookalike Audiences based on your current customers.

You build your intended audience by selecting a suitable combination of genders, locations, age groupings, languages, interests, and other factors.

Pacing and Scheduling

Your next decision is on how you spend your budget. You have two choices here:

1. Standard – your budget is spent gradually over a day
2. Accelerate – your ad budget will be spent as soon as possible during the scheduled campaign time.

Scheduling

You then tell TikTok when you would like to run the ads in this Ad Group. You can set your preferred dates for your ads, or you can opt for them to run continuously. If you select for your ads to run continuously, you choose a start date, and your ads will run until your budget is exhausted.

You can opt for what TikTok calls Dayparting. With this, you can select one or more periods or all day to run your ads.

Bidding and Optimization

TikTok Ads works similarly to the ads on Facebook and Instagram. There are only so many ad slots, so each potential advertiser bids (automatically behind the scenes) for the right to have their ad presented to the targeted TikTok users. They compete against other advertisers for their spot in each TikTik user's feed.

You set an Optimization Goal so that your bids reflect your campaign goal. You can choose from three optimization goals:

1. Click – TikTok will show your ads to people who are more likely to click on them, and bill you by CPC (Cost Per Click).
2. Impression – TikTok will show your ads to the best people to get the most possible ad impressions, and bill you by CPM (Cost Per Mille).
3. Conversion – TikTok will show your ads to the people most likely to achieve your conversion goals. Billing here can be complicated, as it depends on what you are trying to convert, but will effectively be a modified CPC (Cost Per Click).

Ads

Once you have set up your Campaign and at least your first Ad Group, it’s time to start creating your Ads. The TikTok Group of apps now allows you to use both video and image apps, although image apps are not yet available in the TikTok app itself. You can get around this, however, by making a video from a series of images.

You should generally go through the following steps when creating your ads:

1. Add your creatives, i.e., design, film, edit, and upload your videos (and images for TopBuzz/BuzzVideo/NewsRepublic). You can upload creatives from your “Library " or click "Use Template" to create creatives.
2. Choose a cover – usually one of the eight keyframes that the system automatically uploads from your video
3. Preview your creatives
4. Add an “Ad Name” for your ad group
5. Fill in the "Ad Text" – the text that will show on top of your creative to the audience
6. Include a Call to Action (CTA) in each ad you upload. You will want this to relate to your campaign goals and Ad Group objectives.

If you are sending people to your website, you will also need to set up a tracking pixel to collect the necessary data so that you can track the success of any conversions.