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TikTok Ads vs. Facebook Ads: Which One Will Give Your Business the Best ROI?

TikTok has skyrocketed in growth and has become a new avenue for marketing your eCommerce or SaaS business. Yet, Facebook has been a strong foundation of any marketing strategy for years. 

Which one should you focus on? Ultimately, it all boils down to which platform gives you the best ROI to help grow your business effectively.

TikTok Ads vs Facebook Ads: Core Differences

Every business will have varying results from marketing on TikTok and Facebook as a result of the differences between these platforms. Some eCommerce stores will have a better ROI on TikTok; others may have a better ROI on Facebook.

Let’s explore some of the main differences between these platforms that may affect your own results.

{{cta-tiktok-guide}}

Ad Formats

Facebook offers more flexibility in ad formats than TikTok, which might be necessary for some types of products or services. However, TikTok still offers several ad formats that can propel brand awareness to new levels.

Facebook has a range of ad formats that accommodate plenty of different types of ads:

  • Image ads
  • Collection ads
  • Messenger ads
  • Video ads
  • In-Stream Video ads
  • Carousel ads
  • Stories ads

TikTok offers the following ad formats that allow you to focus on conversions and brand awareness:

  • In-Feed ads
  • Top View ads
  • Collection ads
  • Branded Hashtag ads
  • Brand Takeover ads
  • Branded Effects ads

We can see how both platforms give you plenty to work with. For example, TikTok focuses on video ads with branded options to increase brand awareness, while Facebook lets you work with any media.

User Demographics

A notable difference between Facebook and TikTok is the demographics of the user base.

TikTok has a younger user base, although as it has grown in popularity, users of all ages have adopted the platform. Still, people under 34 make up a significant portion of the platform. For example, 36.5% of users are 18 and 24, while 32% of users are between 25 and 34 — for a combined 68.5% of users under 34.

Facebook, conversely, has a much broader user base. Combined, 54% of its users are over 34 years old.

We can see how there isn’t as much of a split as some believe, but TikTok still leans toward a younger audience.

{{cta-tiktok-guide}}

Understanding ROI for Facebook Ads and TikTok Ads

Your ROI is calculated based on two major components — costs and revenue. Therefore, you need to understand all the metrics involved in costs while properly tracking revenue generated from your campaigns.

Let’s review the ROI formula, then explore four key KPIs for Facebook Ads and TikTok Ads eCommerce, so you’re ready to start your campaigns and calculate your ROI.

The ROI Formula

The ROI formula highlights how much money your paid ads bring based on cost. The standard ROI formula is:

Return on investment (ROI) = (Net Return / Cost of Investment) * 100

The result is a percentage describing how much revenue was generated based on how much was spent. For example, an ROI of 50% indicates your initial investment was regained, and then 50% of those costs created revenue for your business.

Additionally, ROIs can be positive or negative percentages. A negative percentage means you spent more on the campaign than it generated, while a positive percentage indicates it generated more revenue than it costs.

Properly tracking expenses and results of your campaigns is crucial to understand your ROI accurately. Otherwise, you’ll be left with only the metrics the platform provides, which do not give you the entire picture.

Let’s explore a few things to keep in mind when deciding which platform is right for your business and is most likely to give the best ROI.

Cost-Per-Mille (CPM)

CPM and CPC are the two primary metrics to understand regarding your advertising costs. CPM describes your costs for every thousand impressions on your ads, making it the standard metric for brand awareness campaigns.

Below, you can see how the median CPM for TikTok ads is $6.67.

The median CPM for Facebook Ads is significantly higher at $15.22. 

Conclusion: Facebook has a higher median CPM, but keep in mind these stats take into account all ad formats. Facebook video ads costs contribute significantly to this figure, but you may have lower costs if you focus on cheaper formats. TikTok offers a more limited variety of ad formats, allowing for more consistent costs.

Cost-Per-Click (CPC)

Every time someone clicks on your ad, it costs you money. CPC is the average cost of every click on your ad. So it’s vital to minimize CPC while ensuring visitors are sent to a persuasive landing page ready to turn them into customers.

You can see below that the median CPC for TikTok Ads is $1.14

The median CPC for Facebook Ads is $1.65, a notable increase on TikTok’s CPC.

Conclusion: Like CPM, the median CPC for Facebook Ads is also higher. Does this mean you should focus on TikTok? Not entirely, as there are two more KPIs more concerned with revenue that should also be considered.

Click Through Rate (CTR)

Your CTR describes how many people see your ad that actually click on it and take the next step towards becoming a customer. The higher the CTR, the better.

Below, you can see how the average CTR for TikTok Ads is 0.59%.

The average CTR for Facebook Ads is almost double, coming in at 0.98%.

Conclusion: CTR doesn’t reflect costs but instead reflects the effectiveness of your ads and your opportunity to take people off the platform and over to your site. Facebook has a much higher CTR, indicating more people are willing to leave the platform and investigate your offer.

Conversion Rate (CVR)

Your conversion rate is the percentage of visitors who reach your website that becomes customers. The higher your conversion rate, the more effective your ads and your landing pages are at generating revenue. As one of the most important KPIs, increasing your CVR is how you improve your ROI.

Below, you can see how the median TikTok CVR is 2.8%.

At present, Facebook also reflects the same median CVR at 2.8%.

Our data are calculated in real-time for the designated period, which in this case is roughly 30 days. If we take a look at a longer timeframe, we can see how the average conversion rate for TikTok Ads is 1.1% for 2022, while Facebook’s CVR for the same period is 9.21% — a substantial difference.

Conclusion: TikTok may be cheaper for advertisers, but Facebook’s higher CTR and conversion rates indicate it helps make sales. However, these averages do not consider the industry, products, price points, and many other factors unique to your business.

So, Which Platform Will Give You the Best ROI?

Every business will have a different answer — some will thrive on TikTok, others on Facebook.

TikTok is all about video ads and offers a range of specific types of ads to choose from. Ads on this platform typically need to look similar to a user’s post, build excitement, and ultimately lead users to your site to make a purchase.

However, not every business is well-suited for only video ads. Facebook Ads gives you more variance to explore, so you can use a broader range of media to convey your marketing message.

Additionally, you must have a strong understanding of the best ad formats for your product or service, then, from there, decide which platform to focus more on.

{{cta-tiktok-guide}}

Use TikTok Ads and Facebook Ads Together to Build Your Business

Fortunately, you don’t have to choose one platform and ignore the other. Instead, you can put both TikTok and Facebook to work building your business while focusing more on the platform that generates the best ROI.

  • Benefit from the power of cross-channel marketing: Cross-channel allows you to reach users of both platforms and benefit from the varying ad formats and user bases. You can even reuse Tik Tok Ads on Facebook to deliver a consistent message.
  • Strengthen your brand identity: A strong brand identity paves the way for new customers and improves the first stage in the customer journey. While brand identity is hard to reflect in your ROI, it’s crucial for the long-term success of your business.
  • Expand your campaign’s reach: Using both platforms in tandem allows you to reach the varying user bases of TikTok and Facebook. So, for example, even if the younger demographic on TikTok isn’t your specific target audience, you can still leverage the ad platform to reach the right demographic since TikTok now has users of all ages.

Team Up with Varos for Real-Time Benchmarking to Boost Your ROI

Regardless of which platform you focus on, having the full context of your results is crucial. For example, if your CPC is too high compared to your competitors, you’re likely missing out on opportunities to cut costs.

Varos unlocks the entire story behind your KPIs by providing real-time competitor benchmarking. You’ll see how other industries in your industry are performing on the same platform you’re using. 

Below, you can see how our dashboard gives you an overview of TikTok, Facebook, and more:

Ready to enable more data-driven insights about how your results compare to your competitors? Sign up with Varos or contact us today to learn more.

About the Author

Yarden Shaked

Co-founder & CEO at Varos

LinkedIn

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Chase Dimond | Email Marketing Nerd 📧
@ecomchasedimond

Bottom line: I’m recommending Varos to you all because it’s FREE (for now) and it’s already added a ton of value for myself and my clients.Check it out 👇

Social Savannah
@social_savannah

I would definitely recommend checking out Varos. With Varos you can easily see how your peers are performing, for free. You get insights into not only TikTok Ads benchmarks, but also similar data for Facebook Ads, Google Ads, and more. #VarosAmbassador

jason wong
@eggrolI

Varos allows thousands merchants to upload anonymize marketing data across meta and google and aggregating it to show what the average is across different categories and ad spend

Cody Plofker
@codyplof

With varos.com, I can see exactly how our performance across channels stacks up against our competitors in our space.

Barry Hott ☄️
@binghott

Compare your ad performance to benchmarks of companies just like yours, anonymously.
I would've killed for this tool years ago and now it's here and oh it's free. Amazing.

Ron Shah
@obviceo

I've been seeing some content about @Varos_com so we decided to check it out.

One underrated feature of theirs is the Shopify Benchmarking, which is FREE btw.

Literally impossible to access this data anywhere else. Check out what we're seeing at @my_obvi 👇

William Harris
@wmharris101

I'm loving what @Varos_com is doing with providing much more relevant benchmarks for #ecommerce... especially since it shows that we are absolutely DOMINATING @Elumynt on #facebookads!

This is in the Baby and Children vertical.#fbads #ppcchat #retail #dtc

Chase Dimond | Email Marketing Nerd 📧
@ecomchasedimond

Bottom line: I’m recommending Varos to you all because it’s FREE (for now) and it’s already added a ton of value for myself and my clients.Check it out 👇

Social Savannah
@social_savannah

I would definitely recommend checking out Varos. With Varos you can easily see how your peers are performing, for free. You get insights into not only TikTok Ads benchmarks, but also similar data for Facebook Ads, Google Ads, and more. #VarosAmbassador

jason wong
@eggrolI

Varos allows thousands merchants to upload anonymize marketing data across meta and google and aggregating it to show what the average is across different categories and ad spend

Cody Plofker
@codyplof

With varos.com, I can see exactly how our performance across channels stacks up against our competitors in our space.

Barry Hott ☄️
@binghott

Compare your ad performance to benchmarks of companies just like yours, anonymously.
I would've killed for this tool years ago and now it's here and oh it's free. Amazing.

Ron Shah
@obviceo

I've been seeing some content about @Varos_com so we decided to check it out.

One underrated feature of theirs is the Shopify Benchmarking, which is FREE btw.

Literally impossible to access this data anywhere else. Check out what we're seeing at @my_obvi 👇

William Harris
@wmharris101

I'm loving what @Varos_com is doing with providing much more relevant benchmarks for #ecommerce... especially since it shows that we are absolutely DOMINATING @Elumynt on #facebookads!

This is in the Baby and Children vertical.#fbads #ppcchat #retail #dtc