Brands 5x Spend on TikTok in Last Six Months

Here are the results you can expect when you start advertising on TikTok

TikTok is new and has brands buzzing. Its video-first platform has challenged brands to attract Gen Z & Millennial audiences in a time when the pressure to diversify away from Facebook Ads has been higher than ever.

But, is it really a place where your brand can drive positive ROI? Yes, it is - Let's look at why brand spend is exploding on TikTok

TikTok is Buzzing

To evaluate whether a brand should start advertising on TikTok, they need to know what similar brands have been seeing in terms of performance. 

TikTok is like Facebook in that it targets based on age, location, gender and interests rather than on search intent. So, we thought we’d compare TikTok Ads and Facebook Ads KPIs from 15 DTC ecomm brands currently benchmarking their TikTok KPIs with each other on Varos.

TikTok spend is skyrocketing. It has increased 5x when comparing the half years of Mar ‘21 - Sep ‘21 vs. Oct ‘21 - Mar ‘22. In that time, TikTok spend as a percentage of Facebook spend increased by 9x.

With trends like that, it’s important to set expectations of what you can expect from advertising on the hottest new platform.

Results to expect on TikTok 

How we calculated the metrics in the analysis below:

• Companies included: 15 Brands
• Industries: A variety of DTC, including apparel, beauty, and food & bev
• Metric calculations: Median
• Data source: TikTok Ads & Facebook Ads platforms
• Data aggregation & benchmarking platform: varos.io 

Over the last 9 months, TikTok has been 12% cheaper on Cost Per Conversion than Facebook as reported by TikTok & Facebook ads platforms.

Let’s break it down: 

CPMs are way cheaper on TikTok than on Facebook. It’s much cheaper to reach large audiences of ppl. This doesn’t surprise us given how much less spend there is on TikTok, and at least among Gen Z, TikTok occupies a lot more facetime than Facebook/Instagram. 

We see that CTRs are about the same when comparing between the two. And we see that the conversion rate is way lower for TikTok ads traffic than from Facebook ads. 

The low conversion rate indicates that TikTok targeting might not be as good at reaching high-intent users as Facebook is. Given Facebook’s years in the business and breadth of services offered, it makes sense that Facebook has a leg up in its targeting abilities. Even despite that, due to the engaging nature of TikTok’s video-first platform, CTRs remain equal between the two platforms. 

So, is TikTok right for you?

Brands are flooding to TikTok because it offers the world's cheapest source of engaging content. At the same time, we are seeing the need for competitor insights skyrocket, since brands want to know if their metrics are within reason. 

With Varos you can easily see how your peers are performing in real time, for free. Signing up to Varos takes one minute, and you can get insights into not just all the TikTok data above, but also similar data for Facebook Ads, Google Ads, Shopify, and more. 

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