It started out as a video-sharing social network where users shared short clips of themselves lip-synching and dancing to trending music. It has since expanded to house more diverse videos and become a creative outlet for brands.

After the merger, TikTok's active user base grew by almost 800%. Today, the platform has over 1 billion monthly users and brands use TikTok ads to reach them.

In this article, we'll cover everything you need to know about TikTok's advertising platform and discuss if it's worth leveraging.

• Types of TikTok Ads
• How do TikTok ads work?
• How to Set Up Your TikTok Account
• TikTok Ad Review Process
• TikTok Ad Examples
• TikTok Advertising Cost
• Should you leverage TikTok for Business?
• TikTok For Business Pros and Cons

The platform's e-learning service helps businesses unleash their creative side and learn how to make advertisements on the Ads Manager platform. 

The sole marketing format for businesses to use on TikTok is video advertisements. The TikTok For Business Ads Manager platform helps marketers create these advertisements, and you can choose from five different formats.

TopView Ads

TopView ads appear once a day immediately after a user opens their app for the first time. Here’s an example of a TopView ad by M&M that advertises a virtual Halloween experience.

Image Source

TopView ads can be up to 60 seconds long, making it perfect for businesses looking to advertise products or services that require longer periods of attention, like TV or movie trailers. The longer run-time works, as 71% of users say TopView ads grab their attention.

In-Feed Ads

In-Feed ads appear as the fourth video users see as they scroll through their “For You” feed, which is where they land when they open the app. A For You feed features videos that the algorithm believes are of interest to the user based on their app activity. A study by Neuro-Insight found that TikTok In-Feed ads achieve 23% higher detail memory than TV ads. 

Here's an example of an In-Feed ad created by food delivery service GrubHub.

Image Source

In-Feed ads can feature a CTA, making them especially useful for marketers looking to use the platform to drive sales and conversions. Acorns, a finance business, has used the In-Feed CTA feature to prompt viewers to download their app.

Image Source

Some brands create their own version of In-Feed ads by partnering directly with influencers. For example, Raising Cane's Restaurant partnered with famous TikTok influencer Chase Hudson to promote their business.

@lilhuddy

this my way eating @raising.canes what's yours #CaniacAmbassador #raisingcanes

♬ Stuntin' On You – Tyla Yaweh

Users who follow Hudson would see this video in their For You feed.

Branded Hashtags

Branded Hashtags are advertisements that businesses use to inspire TikTokers to create content around a brand-related hashtag of their choice. Brands using this ad format have exclusive access to the hashtag, which is not the case on other social media sites. Its exclusivity, however, comes with a higher price tag and reported average costs are around $150,000 USD for six days. 

The investment can be worthwhile, though, as the ad type has a median engagement rate of 17.5%. In addition, 77% of TikTok users like it when brands come up with new challenges, trends, or memes for them to join in with, so using this format speaks directly to audience desire. 

The hashtag challenge #WorldSeries, sponsored by Major League Baseball, is featured on TikTok's Discover feed, and the hashtag encourages users to post videos showing how they've celebrated baseball games. Clicking on the hashtag brings users to an internal landing page that features the sponsors' logo, challenge description, and other videos using the hashtag.

Image Source

Brand Takeovers

Brand Takeovers are an ad format that can include TopView, In-Feed, and Branded Hashtags all at once, and the takeover aspect of this type is that the platform only features one business per day. The starting cost is reported to be around $50,000 USD per day. 

Guess, a fashion company, ran a Brand Takeover on TikTok to advertise their denim jeans. Over six days, its TikTok account gained over 12 thousand new followers and generated a 14.3% total engagement rate. Its Brand Takeover included Top View, Branded Hashtag, and In-Feed ads.

Image Source

Branded Effects

Branded Effects ads use 2D, 3D, or AR to add images of your products into TikTok videos. Brands typically create stickers of their products or filters that TikTokers can use when creating their videos. These filters and stickers increase engagement and brand awareness, as using them typically involves playing brand-specific games.

Not Okay Movie used the Branded Effects feature to create a game where users can use the effect to find out which character from the movie they are. The effect has generated over 2,000 videos of UGC of people playing the game. 

Image Source

How do TikTok ads work?

Setting up a TikTok ad is relatively easy.

First, you have to create a business account from which you will build, manage, and track your ads. The next step is describing your business and setting up your payment type.

Now, here's where the fun starts. You can choose between two ad manager modes: simplified and custom.

In both options, you build your ad in levels. You first outline your campaign, then define your ad group, and finally create your individual ads.

Here's the difference between these two modes:

• Simplified mode takes a simple and straightforward approach to ad creation, letting Tiktok's algorithm do the heavy lifting.
• Custom mode gives advertisers full control over their ads with advanced customization options, such as A/B testing, audience targeting based on video and creator interactions, and ad combinations.

Choosing a mode isn't permanent, you can always switch to another mode.

Now that you know how TikTok ads work, here's how to set up your account and build your ad.

1. Create a business account.

2. Describe your business.

3. Enter your billing information.

4. Set up your payment type.

5. Select your ads manager mode.

   

6. Build your ad.

    

   Pro-tip: When building your ad, consider Promo, the video marketing tool that allows you to find video templates and create high-quality promotional videos.

7. Review and submit.

TikTok Ad Review Process

When you submit an ad for review, it usually takes 24 hours to review. To avoid any delays, you want to make sure your ad meets the platform's ad requirements and follows its policies.

Here's a checklist to use when reviewing your ad before submission:

• The landing page:
  • Is functional and mobile-friendly.
  • Delivers on what it outlines in the ad.
  • Matches the product name in the ad.
  • Is in the language of the region it's targeting.
  • Doesn't automatically download files to a user's device.

• The ad:
  • Is free of spelling and grammatical errors.
  • Contains audio.
  • Is between five to 60 seconds.
  • Doesn't include excessive use of symbols, spacing, numbers, or capitalization.
  • Matches the caption.
  • Is in the language of the region it's targeting (or includes subtitles.)
  • Doesn't include any prohibited products or services. Find a full list here.
  • Is not blurry or pixelized.
  • Follows standard video sizes: 9:16, 1:1, 16:9.

TikTok Ad Examples

1. Fly By Jing

In this TikTok ad, food brand Fly By Jing partnered with food influencer TiffyCooks to demonstrate how easy (and tasty) it is to use the brand's product.

Leveraging a known influencer is always a great way to raise awareness for your brand and build trust with your audience. Another great thing about this ad is that the offer is clear: Users can get 10% off by clicking on the CTA and using the code.

2. Tiffany & Co.

To promote its latest partnership with Beyoncé and Jay-Z, the brand has launched a series of ads including the artists. The ad is simple, but effective, and leads users to a landing page where they can learn more about the campaign.

3. Omsom

In 20 seconds, this food brand accomplishes a lot.

The video effectively showcases how its product is used. The caption also gives users some background on the brand and tells a story in just a few words. In addition, the CTA leads users right to a product page (instead of the homepage) where they convert.

Lastly, too often, ads seem jarring because they don't fit the feel of the platform. That's not the case here. The ad feels so natural in the feed that you wouldn't know it was an ad if you removed the #sponsored tag and CTA.

TikTok Advertising Cost

When it comes to budgeting for Tiktok advertising, here's the breakdown. You can select a daily or lifetime budget, which can be changed at any point during your campaign.

At the campaign level, you must have a minimum daily and total budget of $50 USD. For an ad group level, your budget must exceed $20 USD daily.

As for the advertising cost, TikTok hasn't released its pricing policy. However, there is some information out there.

In 2020, Digiday reported that TikTok had a cost-per-mille as low as $1. After running their own experiment, JungleTopp reported that the cost-per-click was $0.19 – much lower than Facebook and Instagram.

With this platform, you can choose between several bidding strategies, each optimized for specific goals.

Should you leverage TikTok in your marketing strategy?

Since peaking in 2020, TikTok has become a go-to advertising platform for many brands. As the number of users increased, the number of ads they saw also followed from 19% in 2020 to 37% in 2021.

A 2021 Kantar report ranked the short-form video platform in the number one spot for ad equity, surpassing Amazon, Instagram, Google, and Twitter. This isn't the first time either – they also held that spot the year prior.

Despite this impressive ranking, the data suggests marketers are still unsure about the platform. According to the report, many marketers view TikTok as highly innovative but not quite trustworthy.

From a consumer perspective, consumers go to TikTok for authenticity and community.

According to a 2020 Nielsen study surveying global TikTok users, 59% of respondents said they feel a sense of community when they hop on the app. It's also a major source of discovery for consumers, with 55% of users saying that TikTok helps them discover new things. 

So, the audience is there and ready to engage. However, the decision to use TikTok For Business in your marketing strategy ultimately comes down to your business goals and desired campaign outcomes.

To make the decision easier, we've compiled a list of pros and cons for marketers to use when making this decision.

TikTok For Business Pros and Cons

Should you choose to incorporate TikTok into your advertising strategy, it can be a valuable tool for growth. While the app does call for niche types of content, brands and businesses can diversify their strategy and advertise to a new audience.

Whatever your final decision is, TikTok For Business is available to those who want to harness the app's advertising potential.