TikTok Ads Guide 2023: How it Works, Formats, Costs and More

TikTok Ads is one of today's most promising ad platforms. The social network has reached the global milestone of 1 billion monthly active users.

In Brazil, TikTok has more than 73.5 million users, almost half of whom (43%) are between the ages of 18 and 24 - according to the Digital 2022 report produced by We Are Social and Hootsuite.

Many Brazilian companies see TikTok Ads as an excellent opportunity to diversify their investments and have a successful paid media strategy.

This becomes even more relevant when they want to communicate with a younger audience. Read on and find out more!

Quick Navigation

Is it worth using TikTok Ads in your marketing strategy?

What Are the Types of Ads on TikTok?

How much does it cost to advertise on TikTok?

Create your TikTok Ads Manager (Step by Step)

How do I set up a campaign on TikTok Ads?

How to Promote Existing Content?

How does TikTok's Ad Analysis Process work?

Best Practices for Advertising on TikTok

Pros and Cons of TikTok For Business

Is it worth using TikTok Ads in your marketing strategy?

TikTok, the world's fastest-growing platform, has been driving down the CPM charged to advertisers, according to an article published by the Financial Times in January 2023.

In the graph below you can see that TikTok delivers a thousand impressions for 60% less than Snapchat, 50% less than Instagram, and 30% less than Twitter.

This strategy of offering discounts to keep and attract customers in times of crisis is not new, but the platform's potential is impressive.

Just look at the other figures: the engagement rate for brands on TikTok (6%) is up to 10 x higher than the rate on Instagram (around 0.6%). With lower CPM and higher engagement, the ROAS becomes unbeatable.

Data from another survey carried out by Opinion Box further reinforces the importance of social networks in marketing strategies:

• 82% of users access the app at least once a day and 39% access it more often;
• 46% of users believe that the ads have something to do with them;
• 38% of users have already bought something after clicking on an ad on TikTok.

What Are the Types of Ads on TikTok?

Now that you know the power of influence and the low cost of advertising on TikTok, check out the different types of ads you can exploit in your campaigns.

The creative formats vary between image, video and Spark. See more details about each one!

TopView

TopView are videos that appear each day as soon as you open TikTok. They can last up to 60 seconds. It's ideal for companies that want to promote products/services that require more time, such as TV ads.

Example of an ad in TopView format:

In-Feed Ads

In-Feed Ads are videos that appear on the For You Page (the first page highlighted when you open TikTok). The application's algorithm displays videos of interest to the user based on their activity.

This type of ad is similar to those that appear in the Instagram feed. They are ideal for stimulating conversions and sales, as the videos can contain a call-to-action (CTA).

Example of an ad in the In-Feed Ads format:

Branded Hashtags

Tagged hashtags are specific ads used by the brand to influence TikTokers to use a hashtag related to the brand. Companies gain exclusive access to the hashtag, but the benefit costs around US$150,000 for just 6 days.

For example, let's say your company is a cosmetics company and has just launched a new line of products for oily skin.

You can create a Branded Hashtag called #MinhaPele, with which you encourage TikTok users to post videos related to the treatment using your products.

An example of an action already carried out with this type of ad was that of singer Jennifer Lopez, who used the resource to promote a song, Pa Ti. The hashtag was #PaTiChallenge, and Jennifer posted a video and challenged other TikTok users to do the same routine.

Example of an ad in the Branded Hashtags format:

Brand Takeovers

Brand Takeovers are an advertising format that can include the three formats already mentioned: TopView, In-Feed and Branded Hashtags.

They can be videos, gifs or static images. The difference with this type of format is that the platform only serves one company per day, starting at US$50,000 per day.

A successful case in point is the Guess clothing brand, which ran a Brand Takeover on TikTok to promote a new jeans model over six days. The results were 12,000 new followers and an engagement rate of 14.3%.

Branded Effects

Branded Effects ads use 2D, 3D or Augmented Reality to insert product images into videos on the platform. Companies create product stickers or filters for users to use in their videos.

These resources increase engagement and brand awareness, and usually involve your own content.

For example, the Puma brand used Branded Effects to promote a new model of football boots. The brand's 3D sticker invited users to play a virtual reality game with a soccer ball.

This action generated more than 100,000 videos of user-generated content.

Spark Ads

They are ads in a native format that allows companies to create campaigns with their own organic posts or with the posts of other accounts, such as influencers, with their permission.

Most users instinctively "swipe" ad-like content when it appears in the Feed. As Spark Ads look like "normal" content on the platform, they offer advertisers a huge differential in results.

How much does it cost to advertise on TikTok?

Tik Tok ads are based on an auction model, similar to other platforms such as Facebook Ads and Google Adswhere you can control the daily or total budget of the campaign.

The minimum is 50 dollars per day or for maximum duration for campaigns. Ad groups need a minimum of 20 dollars a day and, for maximum duration, a bill is made according to the period chosen.

The platform does not set minimums for individual ads, but it does provide two fundamental tips:

1. If the Auction Limit or Auction Cost option is chosen, leave the campaign budget at No Limit and set the ad group's daily budget at 20 times the desired cost per action (CPA);
2. If you choose Lowest Cost Conversion campaigns, set a minimum budget of 100 dollars or 20 times the CPA - whichever is higher.

Create your TikTok Ads Manager (Step by Step)

To get started, you need to create an account in the TikTok Ads Manager. Here's a step-by-step guide to setting this up:

 1. Create Login

Go to the TikTok Ads Manager page and fill in the fields with your details. Click on "Send Code" to receive your verification code, read and agree to the platform's terms and conditions. Then click on "Sign Up" to create your login.

2. Open your account

Fill in the fields with basic information about your business. After that, just check that the information is correct - especially the time zone, as you won't be able to change it later. Click on "Register" to open your account.

3. Enter your company information

On your first login, a pop-up form will appear asking for some more information about your company and other billing data. In addition, your website URL must be in the format https://www.suaempresa.com.br/.

To go through the review phase, all the information must be correct, the site must work well and it must have all the necessary information for potential customers.

4. Select the Payment Method

You can choose between manual or automatic payment (if available in your region). However, once you have entered it, you will no longer be able to change this setting.

5. Send your details for approval

Once you have filled in all the necessary information, click on "Send" at the bottom of the page. The platform's team will review your account within 24 hours. They will then send you a confirmation or rejection of your profile for advertising.

So the first stage is complete!

How do I set up a campaign on TikTok Ads?

Now all you have to do is proceed with the settings to create a campaign. We've also created a step-by-step guide to help you through the process:

1. choose your ad objective

There are three categories of ads on TikTok. Choose the one that makes the most sense for your goal with the platform:

• Recognition

This objective displays your ads and maximizes the number of impressions for as many people as possible.

• Consideration

This objective operates on four different fronts:

1. Traffic: directed to a URL, such as a website, Landing Pageblog post, etc;
2. Video views: maximize the views of your ad;
3. Lead generation: collect leads for your company with a customizable and instant form within TikTok;
4. Interactions with the community: generate greater engagement, increasing traffic and followers on the brand's profile.

• Conversion

This objective operates on three different fronts:

1. Conversion: traffic directed to website registrations or e-commerce sales;
2. App download: targeted traffic downloading the app;
3. Catalog sales: dynamic ads based on products in the catalog (available for accounts with sales reps - see the Paid Media Consulting service).

2. Choose the Campaign Name and Budget

The campaign name can be up to 512 characters long. Then choose the budget limit for the ad group. You can choose between a spending target or a daily budget, similar to Meta Ads.

3. Define the Name of the Ad Group and Select the Placement

After choosing the name of the ad group (also with a limit of 512 characters), you have to configure the channels to run the ads:

• TikTok feed;
• News feed from BuzzVideo, TopBuzz, NewsRepublic and Babe;
• TikTok's audience advertising network;
• Automatic placement (offers automatic and optimized ad delivery).

In this final option, you can allow or disallow TikTok to create automatic combinations of ads with photos, videos and text. The system will prioritize those with the best results.

Although it is recommended for those starting out in paid media, there is a risk of creating unwanted combinations that damage the advertiser's reputation. There is a limit of 999 ad groups per campaign.

4. Segment your audience

TikTok allows you to segment your audience to find the ideal public, working in much the same way as Facebook Ads:

• Demographic: location, gender, age and language;
• Interests and behavior: uses user browsing data to offer segmentation of interests and recent interactions with videos, creators and hashtags;
• Audience: offers the possibility to segment or exclude users visiting the site, registration data, activity in the app and engagement, also allows you to create Lookalike audiences with these audiences;
• Device: offers the possibility of segmenting users according to the operating system, its versions, type of network connection, model and price of the cell phone.

Finally, TikTok Ads offers two additional options:

• Audience recommendation: based on the interests and behaviors that can most contribute to the objectives;
• Audience expansion: when activated, allows the platform to reach new audiences when there is a likelihood of increasing results.

5. Set your Ad Group Budget

To set the budget for your ad group, select the start and end date, and the best times of day to run the ad.

6. Define the Optimization Objective and the Auction Strategy

Start by setting the optimization objective between: conversion, clicks or reach.

Then select your auction strategy:

• Bid limit: a maximum amount that the platform will spend to achieve the result. Suitable for keeping the cost per result below the bid. Works for CPC, CPV and CPM;
• Bid cost: an average value that will be sought by the platform. The average cost per result will be close to or below the bid, regardless of the budget. Works for oCPM;
• Lowest cost: there is no bidding, so the system uses the ad group's budget to generate as many results as possible at the lowest cost per result. Works for CPC, CPV, CPM and oCPM.

Finally, simply choose your type of ad delivery: standard or accelerated.

• Standard delivery: divides your budget equally between the dates of the campaign;
• Accelerated delivery: spend your budget as quickly as possible.

7. Create your Ads 

It's very simple to create ads in TikTok Ads Manager, but beware of testing dozens of different versions, as each ad group can have up to 20 ads.

First, you choose the ad format: Spark Ads (transforming organic posts by the brand itself or influencers into ads) and Non-Spark Ads (normal ads in the feed - similar to Facebook Ads' "dark post").

After filling in the name of the ad, you must define whether or not you want to use Spark Ads. If you don't want to use them, you'll have to choose the profile (identity) that will be linked to the ad and then move on to the next steps in the creation process:

• Ad format: choose between image or single video, carousel with up to 10 images, "Playable Ads" with a preview of your app's usability and Collection Ads, with an instant gallery for users to explore your products;
• Ad creative: upload your images, access them directly from assets or easily create stunning videos with TikTok's features;
• Thumbnail: for video ads, you must select a frame that will be the thumbnail;
• Text: will complement the ad, bringing more information to your audience;
• Landing Page: this can be a website or a TikTok page, which will give an immersive experience with fast loading in the app itself;
• Call-to-Action (CTA): select a phrase such as "Learn More", "Visit Store", "Play", etc. You can activate the dynamic CTA, which will display the best CTA for each person who sees your ad.

Interactive add-on: add a deeper layer of engagement to your ads, such as a Countdown, voting or coupon sticker, a Super Like 2.0, a gesture system, etc.

The ad will go through a review and approval process before it starts running.

How to Promote Existing Content?

Just as Meta Ads and Instagram allow you to boost pre-existing content through a campaign with the aim of engagement, TikTok has the same functionality. To do this, simply:

1. Go to your TikTok profile, click on the 3 dots and click on the Creator tools;
2. Click on Promote;
3. Define the video you want to promote;
4. Select the objective from: views, site visits or followers;
5. Select the audience, budget and period;
6. Set up the payment and that's it!

How does TikTok's Ad Analysis Process work?

TikTok's analyses take into account two main items: Landing Page and ads, for about 24 hours to be carried out. Some recommended criteria for meeting the ad requirements are:

Advertisement

1. The videos must have sound;
2. Duration between 5-60 seconds;
3. Avoid unnatural writing, with too many special characters, spaces, numbers and capital letters;
4. It must be in the language for which the ad is targeted;
5. The video must be in good quality.

Destination page

1. It must be responsive and working;
2. Be compatible with the advertisement;
3. Be in the language of the region advertised.

Best Practices for Advertising on TikTok

As a way of preventing disapprovals and ensuring that your ad is ready to run in a way that optimizes its performance, we have prepared a list of the best practices to follow:

General Tips:

• Record the video in high resolution;
• Make noise with some music or simply by talking to the camera;
• Make short videos. Bear in mind that a length of between 21 and 34 seconds has a higher impression rate;
• Create full-screen experiences. 98% of the platform's best-performing videos are in this format;
• Plan and execute the video in vertical format;

Tips for E-commerces:

• Vary the angles: create several variations of scenes and angles to display the products. On average, variations of scenes have 40.6% more impressions than videos with just one person on the screen selling the product without any transition;
• Captivate with subtitles: stimulate what you want your audience to do by adding subtitles and on-screen text. Videos like this have a 55.7% increase in impressions compared to others that don't add these elements;
• Emphasize the offer: when you have an offer or a coupon, don't let it fade into the background. TikToks that emphasize at least one offer have a 67.4% increase in impressions.

Pros and Cons of TikTok For Business

Still wondering if it's worth advertising on TikTok to boost your business? Check out our list of the biggest pros and cons of TikTok Ads!

Pros of TikTok For Business

• The platform has more than 1 billion users in 155 countries. In Brazil, it has 73.5 million, almost half of whom are 18-24 years old;
• TikTok Ads Manager helps you advertise mainly to a young audience;
• The social network thrives on informal or "behind the scenes" content. This can help diversify content and make your creatives more authentic;
• It can offer better performance than other ad platforms. This is because it is a newer platform and the auction is not so inflated by the large number of advertisers competing for the same audience;
• It has higher engagement rates than Twitter and Instagram.

Cons of TikTok For Business

• Most of TikTok's user base does not represent all demographic groups. As the majority are very young, the audience you want to reach may not be covered by the platform;
• Users are looking for more informal content. If your company is more serious, the type of content on the platform won't suit your brand;
• The TikTok For Business reporting tool has no integration with other platforms. This directly affects the collection of insights from the data obtained.

It's a fact that many companies are investing more and more in digital, which means increased competition and competition for people's attention.

It is therefore extremely important to diversify your investment in different types of marketing channels and to delve into a good media plan for your brand.

A Pareto can help you with this mission, after all it has years of experience providing paid media consultancy to a portfolio of over 15,000 clients. See our tips on How to Set Up a Paid Media Plan and Track Its Effectiveness!