Advertising on TikTok for E-commerce Brands: What to Know

TikTok is the fastest-growing social media platform, with over 80 million monthly active users in the US alone (Doyle). In 2022, TikTok’s e-commerce engine earned a total of $208 billion, causing millions of new advertisers to flock to the platform. With such rapid cultural and economic impact, it begs the question for e-commerce brands and digital marketers alike: how do I advertise on TikTok, and is it profitable? In this article, we’ll discuss TikTok audiences, ad types, and what to expect.

Overview of TikTok’s Audiences and Segment Growth by Age Group

When building your TikTok advertising strategy, it’s essential to specify your target demographics and interests. According to a 2022 study by Statista, TikTok’s user demographics are as follows, broken down by age

TikTok’s age targeting is restricted by age groups, which only allows you to target static age ranges consisting of 18-24, 25-34, 35-44, and 55+. In specific cases, it could be advantageous to niche down your age targeting depending on the product. However, we suggest leaving your age targeting relatively broad when first launching your ads on TikTok, and then comparing ad spend vs conversion breakdowns by age using TikTok’s view data feature to find what age group is most profitable for you. TikTok also offers various engagement and interest-based cold audience targeting options, as well as algorithm-based optimizing options for audiences, including:

  • Interest Targeting: Target users who have shown interest in categories across a multitude of industries like Apparel & Accessories, Beauty & Personal Care, Household Products, etc. 
  • Hashtag Targeting: Target users who used and watched videos featuring specific hashtags (EX: A Fitness Clothing Brand can target #fitness, #gym, or #fit.) 
  • Behavioral Targeting: Target highly engaged users who like, comment, and share posts regularly. 
  • Creator Interactions: Target users who follow creators in a specific content category. 
  • Video Interactions: Target highly engaged users who like, comment, and share posts regularly. 
  • Targeting Expansion: An algorithm-based feature that delivers your ads to the audiences you selected first and then expands delivery to other users with similar characteristics to improve performance over time.

TikTok also offers many retargeting options for warm audiences, including web visitors and pixel data, users who have engaged with your ads and page, and even uploading customer lists and files. All retargeting audiences can also be used to create lookalike audiences that target users who follow and have interacted with users within a specified warm audience.

TikTok Campaign Objectives, Ad Types, and When to Use Them

TikTok offers a wide range of campaign types for various industry objectives. We’ll focus on two specific campaign types to drive traffic and sales to your e-commerce website and TikTok Shop: Website Conversions and Product Sales. The Website Conversion Objective allows you to optimize for valuable actions to a linked landing page URL, such as view content, add to cart, and complete payment (purchases). The Product Sales Objective allows you to add clickable product tags to videos linked to products within your TikTok Shop, which customers can use to add their payment and shipping information and receive their order without leaving the TikTok mobile app. On the ad level, TikTok also offers a wide variety of features and ad types. Each ad type serves its unique purpose of fulfilling specific KPI metrics that brands are looking to improve.

In-Feed Ads

Ads that appear in the user’s “For You” page feed, alongside organic content. These ads can include a variety of multimedia elements, such as images, GIFs, and videos, and can be used to promote products, services, or events. In-feed ads are an effective way for e-commerce brands to reach a wider audience on TikTok since they appear alongside organic content that users are already engaging with. These ads can drive conversions effectively due to the ability to create custom copy and call-to-actions.

Spark Ads

An ad feature that allows advertisers to show their organic posts and videos to a wider audience. When users see a Spark Ad in their “For You” page feed, in addition to a clickable call-to-action linked to an external landing page URL, they have the ability to click on the profile associated with the ad, helping increase brands’ organic following and engagement. Likes, comments, and shares will remain on the Spark Ad that was present on the original organic post ID. This allows brands to take advantage of organically posted videos that gained exposure or saw viral results to achieve a higher conversion rate due to the credibility of social proof.

Search Results Placement

Similar to search ads on Google Ads, shows ads to users searching for relevant keywords to a brand in the search function within TikTok. Unlike Google Ads, TikTok’s Search Results Placement does not allow you to bid on specific keywords but rather utilizes AI to target search keywords that TikTok deems most relevant to a brand.

Video Shopping Ads

Take advantage of TikTok Shops to allow advertisers to add product tags linked to their TikTok Storefront and attach them to videos inside the ad account. This ad type helps drive conversions by shortening the customer journey through a closed-loop solution. Video Shopping Ads feature exponentially more accurate attribution than normal In-Feed Ads since all actions taken by the customer take place within TikTok, instead of relying on inaccurate pixel data being tracked on an external landing page.

Brand Takeover & Top View Ads

Brand Takeover is a TikTok ad feature that enables brands to take over TikTok’s full-screen interface with an image, GIF, or a 3-5 second video, immediately upon opening the app. 

TopView Ads is a similar feature that enables brands to show videos to users upon opening the app. However, they feature a 60-second video to offer better storytelling and a more immersive brand experience.

Branded Hashtag Challenge & Hashtag Challenge Plus

A Brand Takeover is a TikTok ad feature that encourages user engagement by asking them to participate in a branded challenge, creating and sharing their own videos with a specific hashtag. The challenge can be centered around a theme or product, and TikTok users can showcase their creativity by participating in it, while also creating buzz for the brand. 

Hashtag Challenge Plus is an enhanced version of the Branded Hashtag Challenge that offers additional features such as a shoppable component or a sponsored lens to create a more engaging and interactive experience.

Branded Effects

A TikTok ad features that enable brands to create customized effects and filters that users can apply to their own videos, incorporating the brand’s logo, colors, or other brand-related elements. This ad feature is an effective way of increasing brand recall by making the brand a part of the user’s own content.

Getting Started: Setting Up Your Ad Account and Launch Strategy

When launching TikTok campaigns for the first time, it’s crucial to define your brand objectives to determine the most suitable ad type for your product. Moreover, since TikTok is a highly momentum-driven platform, it’s essential to customize your strategy to enable the TikTok algorithm to optimize your ads better, especially during the early stages of your ad account. TikTok recommends using the Nurture Strategy, which starts by targeting low-cost conversion objectives, such as View Content, to increase the algorithm’s data and gradually progresses to higher-converting, more expensive conversion objectives, such as Add to Cart and Complete Payment.

When it comes to ad types, it’s advisable to begin with In-Feed Ads, as they have the lowest CPM (cost per mille or impression) and CPC (cost per click). In-Feed Ads should comprise the majority of your funnel strategy and account for most ads in the initial stages. When promoting high-priority items like sales, events, or new product releases, consider using higher-converting ad types like Brand Takeover, TopView, Branded Hashtag, or Hashtag Challenge Plus ads. However, keep in mind that these ad types come at a higher cost due to their sought-after real estate and increased exposure.

It’s also beneficial to use spark ads featuring previously posted viral videos on your brand’s page. Spark ads showcasing posts with high engagement rates will give you an edge with the algorithm since it favors proven content that drives views, engagement, and clicks. Lastly, optimize your ad campaigns regularly and intentionally. Remember, if you don’t understand your funnel strategy, the algorithm won’t either. In most cases, a broad and straightforward approach is the most effective way to run successful campaigns on all platforms and optimize on a daily basis in order to train the algorithm to work with your funnel strategy instead of against it.

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