How much does TikTok advertising cost to reach the right customers and optimize business efficiency? For those who are new to advertising on TikTok, calculating advertising costs is not easy. Let's refer to the secret to determining and optimizing TikTok advertising budget through the article below by Hidemyacc.
1. What is TikTok Advertising Cost (TikTok Ads)?
The TikTok advertising cost is the amount of money that advertisers must pay for their marketing content to be displayed on the platform. The paid content aims at target customers, then directs them to a Website, e-commerce store, or TikTok Shop to make a purchase.
Besides promoting customer purchasing behavior, the TikTok advertising cost is also influenced by factors such as: Ad position and format, target audience, campaign objective, ad settings, trends and seasonality of the ad, competitiveness among brands, and user performance and interaction level.
How much should the TikTok advertising cost be to reach the right customers and optimize business effectiveness? For those new to advertising on TikTok, calculating the advertising cost is not easy. Let's explore the secrets to determining and optimizing the TikTok ad budget through the article below by Hidemyacc.
The general TikTok advertising cost usually ranges from $8 to $20 USD, with each type of TikTok Ad having a different fee.
2. How to determine the TikTok advertising cost?
The TikTok advertising cost is determined through 03 forms as follows:
Bidding
This is a familiar form for Marketers, those who have experience running ads on platforms like Facebook or Google. In this form, advertisers will compete to gain display rights on the TikTok platform through bidding for the ad position. Advertisers need to set their budget, price, and ad campaign objectives. After that, TikTok will conduct the auction to choose the ad position on the platform. Through that, advertisers can reach the target audience and increase interaction opportunities on the platform.
Reservation
Due to the limited number of ad positions on TikTok, advertisers can pre-book to secure a spot. To pre-book the ad position, you need to contact TikTok’s advertising partners. Besides that, TikTok also has an automatic advertising system that helps users manage campaigns effectively. Reserved ad formats include: TopView, Branded Effect, Branded Hashtag Challenge. Reservation ads have a big impact, helping brands increase recognition level and brand coverage, but the budget is quite high and lacks flexibility because you must pay the TikTok advertising cost upfront.
Reach & Frequency (R&F)
R&F is an ad type that allows users to measure the scale of reach and the frequency of ad display to a specific group of users within a definite period. Key indicators in this form are: Reach (number of unique users who can see the ad in a definite time), Frequency (number of times each user sees the ad in a definite time), Target audience (The audience will be based on age, geographical location, interests, and user behavior, helping you optimize the ad campaign).
3. How much is the TikTok Ad Cost?
The TikTok advertising cost often ranges from $8 - $20 USD (200,000 - 500,000 VNĐ), where each form of running TikTok Ads will have different fees.
3.1 Reservation advertising cost
In the reservation advertising cost, TikTok divides it into 03 small costs such as: TikTok Top View Ad Cost, Branded Effect Cost, and Branded Hashtag Challenge Cost.
TikTok Top View Ad Cost:
- Basic cost per impression: $1.35 USD
- Targeted cost per impression: $1.69 USD
- Minimum daily budget: $10,800 USD
TikTok Branded Effect Ad Cost:
- 2D/2D pro effect (Standard): $37,350 USD
- 2D/2D pro effect (Advanced): $67,350 USD
TikTok Branded Hashtag Challenge Ad Cost:
- Cost promotion for the first 3 days: $11,100 USD
- Minimum budget for the campaign: $29,500 USD
- Maximum total campaign budget over 70 days: $40,600 USD
3.2 Bidding advertising cost
Bidding advertising on TikTok is calculated according to 4 main methods: CPM (Cost Per Mille), oCPM (Optimized Cost Per Mille), CPV (Cost Per View), and CPC (Cost Per Click).
In-Feed Ad Cost: Minimum $16 USD per day (400,000 VNĐ) and a minimum total cost of $224 USD (5,600,000 VNĐ).
Cost for 1,000 impressions (CPM): The average price for 1,000 impressions on TikTok is $2 USD (~50,000 VNĐ). You will pay this amount of money for your ad to be displayed to users maximally within your budget.
Price per view (CPV): The CPV method allows you to set a maximum bid for every 1,000 video views within 6s or 2s. From that, the ad is distributed to the most viewers within your budget.
Price per click (CPC): The average CPC bid on TikTok is about $0.20 USD (~5,000 VNĐ) per click. The system will optimize the ad to be displayed to users who are likely to click on the link in the ad.
Cost for optimized impressions (oCPM): The oCPM bid for 1,000 impressions. However, the system will optimize to target those who have high conversion potential or behavior related to the product.
3.3 Reach & frequency (R&F) advertising cost
The R&F (Reach & Frequency) ad allows advertisers to control the number of people reached and the frequency the ad is displayed. After setting the audience and budget, the system will estimate metrics like the number of people reached and the number of impressions.
The minimum budget for a 1-week R&F campaign in Vietnam is about $53.69 USD, with estimated results: Reach: 100,000 people, Frequency: 1.28 (For every 128 people reached, 28 people will see the ad at least 2 times).
4. Secrets to optimizing advertising costs on TikTok
For those who are new to doing business and running ads on TikTok, they will encounter some problems such as advertising not making money, large budget but low efficiency, unexpected revenue, etc. Below are some tips to help you save on TikTok advertising costs and optimize your advertising campaign.
4.1 Optimize your budget in the early stages of advertising
In the early stages of running ads on TikTok, optimizing the budget is an important factor to help the campaign be effective without exceeding the planned budget. You need to set the budget as follows:
- Campaign budget: Open budget.
- Advertising budget: Daily budget.
- Ad group level: Run Conversions ads with Lowest Cost and Conversions as your Optimization Goal.
- Initial budget: Minimum > 20x cost to achieve action (CPA) and ≥ 100 USD.
- See previous spend: See average spend for previous ad groups.
- Bid Optimization: Use App Event Optimization (AOE) to drive specific actions in your campaigns.
4.2 Using TikTok Agency account
TikTok Agency accounts are accounts verified by TikTok and granted to advertising media companies as their official partners.
- For regular TikTok accounts: Users must pay costs such as advertising fees, taxes (10.8%), and international payment card service fees.
- For TikTok Agency accounts: Pay for advertising only through the Agency, no additional taxes required. Ads will be easily monetized and flexibly converted without cost limits.
4.3 Optimize TikTok advertising costs when running conversions
TikTok conversion ads focus on converting user behavior into valuable actions for businesses, such as moving from watching a video to downloading an app, making a purchase, or leaving a contact.
When running conversion ads, you should avoid changing your bid, targeting, or budget before the end of the learning phase. For this ad group, the end of the phase is signaled when the ad reaches 50 conversions.
Additionally, you should also keep your TikTok ad spend at 50% during the research phase. Wait at least 2 days before making any changes to bids, targeting, or budgets.
4.4 Using advertising services of Agencies
There are 4 reasons why you should consider using advertising services from Agency partners:
- Expertise and experience: Agencies have a team of experts with many years of experience in building and optimizing advertising campaigns, helping to increase efficiency and achieve goals quickly.
- Optimization strategy: The agency helps you build the right advertising strategy, from identifying your audience to optimizing your budget and outreach strategy.
- Ongoing Support: Agencies provide ongoing support and troubleshooting services, ensuring that your advertising campaign is not interrupted.
- Increase campaign efficiency: With in-depth understanding of the market and algorithms, the Agency can optimize advertising to bring high results and save costs.
4.5 Determine the campaign's goals and objectives
Before you start your TikTok advertising campaign, it’s important to have a clear goal in mind. Decide whether your advertising goal is to increase traffic, increase engagement, increase brand awareness, or drive sales. This will help you focus your resources on the most important elements to achieve the best results.
4.6 Understand the rules and policies set by TikTok
To run effective ads on TikTok, you need to understand the platform’s rules and policies. This includes complying with ad content requirements, ensuring that your ads do not violate copyrights, and that they do not contain false or misleading information. Understanding the policies will help you avoid having your ads rejected or your account banned, and improve campaign performance.
4.7 Produce unique and interactive content
Creating unique and interactive content is also important on TikTok. Creative, engaging, and engaging content will help your ads stand out from the crowd. Users should also take advantage of features like music, effects, and trends to create videos that attract attention and encourage viewers to participate.
4.8 Diversify activities on TikTok
Finally, diversifying your TikTok activities will help you reach a wider audience. Besides advertising, you can participate in hashtag challenges, livestreams, or collaborate with TikTok influencers to increase engagement and expand the reach of your product promotion campaign.
Above, Hidemyacc has shared with you the most detailed information related to TikTok advertising costs . Hopefully, through the useful information above, it will help you better understand the factors affecting advertising budgets, how to optimize costs and appropriate options to achieve the highest efficiency for your campaign. If customers have questions about the service, please contact Hidemyacc for the fastest support!
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5. FAQ
5.1 How much is TikTok advertising tax?
Currently, TikTok has registered and is responsible for declaring taxes in Vietnam for advertising activities for all customers using accounts registered in Vietnam. From January 1, 2024, all advertising purchases in Vietnam will be charged an additional 5% Value Added Tax (VAT) to the user's account balance.
5.2 Should we increase TikTok advertising costs?
To decide whether to increase your TikTok advertising budget, you need to consider the results of your current advertising campaign and your upcoming campaign goals. Some factors you can consider when deciding to increase your budget include: The current campaign is delivering positive results with high conversion rates and reasonable TikTok Shop advertising costs. Make a difference from your competitors' ads. Increase brand awareness while creating community engagement to increase sales profits. Your advertising budget allows for growth without impacting other business finances.
