Blog Post

TikTok for Brands: Is It Worth It?

by: Power Digital April 1, 2021

Table of Contents

TikTok has taken the world by storm.

In just a few years, the video-sharing platform has catapulted itself into the conversation of the most popular global social media sites in existence. It recently reached a billion worldwide users, making it the fastest-growing social media network ever.¹

Because this is a rapidly expanding platform, early adopter brands have a tremendous opportunity to establish a presence, especially if their audience is in the 25 and under demographic. And with the launch of TikTok for Business in 2020, the opportunities for social media marketing teams to build their brand are greater than ever.

Wondering whether your brand should get in on TikTok marketing? Here’s everything you need to know as a social media management agency about the social media platform and the potential marketing opportunities it presents.

TikTok For Brands—A Run Down

TikTok is an iOS- and Android-based social media app built for users to craft and share short videos (that last up to 15 seconds). In a word, Tik Tok is about creative expression. This ingenuity is most often channeled in the form of a quick dance, lip-sync, or comedy sketch.

If you remember Vine, TikTok operates on a similar premise. You film a short video that plays on a loop. But it also took some of the most popular features from Snapchat that allows you to add:

Effects
AR filters
Musical overlays
Text

TikTok’s company mission is “to capture and present the world’s creativity, knowledge, and precious life moments, directly from the mobile phone. TikTok enables everyone to be a creator and encourages users to share their passion and creative expression through their videos.”²

To that end, it’s been a raging success, creating viral sensation after viral sensation—from songs, to dances, to memes, to TikTok stars. Users love the challenge of creating something memorable within a limited time frame and then seeing how others channeled their creativity.

Just a scroll through the feed and the current trends will give you a sense of what Tik Tok is all about. It’s fun, bizarre, hilarious, and addicting.

Brands on TikTok: By The Numbers

A look at the numbers is quite revealing:

By demographics, it skews young. 62% of its user base are aged between 10 and 29.³
90% of TikTok users use the app at least once per day, but studies have shown that a significant majority of users will return multiple times each day.⁴
In the U.S., the average time spent on TikTok was over 60 minutes, with 13 daily app opens.3
21% of users share brand posts and brand/product recommendations. 24% of users share influencer posts.⁵

But this isn’t simply a silly dancing and lip sync site. Well, it is. But it can be a lot more, especially for savvy brands willing to take risks and channel their creativity. Put simply, TikTok creates an experience that its users crave and keep coming back for, which should have marketers paying close attention.

Although the audience is younger than most social media demographics, celebrities, marketers, and brands spared no time nor expense rushing to leverage the platform’s capabilities. For some, it cracked the code on how to reach their target audience, Gen Z—a generation that has been unreceptive to traditional advertising methods.

For others, it was simply a new opportunity to be creative, market themselves, and build their brand by posting videos and engaging their audience. This entrance of celebrities and global brands has granted the app legitimacy and helped propel it from the minors to the big leagues.

TikTok for Businesses

In June of 2020, TikTok launched TikTok for Businesses.⁶ This new platform was created as a marketing hub for brands. It provides several solutions for increasing engagement and building an audience.

Currently, there are several ways brands on TikTok can leverage the app’s potential. But only one of them is free.

Build Your Own Content (Free)

Creating an account and posting content won’t cost you a dime aside from the time of editing and determining proper social media image sizes and other resources you spend on building the assets. It can all be done with just a smartphone.

But this method isn’t a sure-fire way to expand your reach; it takes work, effort, creativity, and luck to go viral. Otherwise, you will need to grow the old fashion way—slow and steady—by regularly posting engaging content and gradually building an audience.

If you have a creative marketing team, they may be up for the challenge. Or, if you have an established name, it’ll be easier to grow your channel. Whatever you do, don’t treat your content like a normal advertisement. Instead, embrace the TikTok ethos and build your own fun and engaging content that keeps your audience thirsting for more.

Brand Takeover Ads ($53,000+ per day)

Brand takeover ads take up the entire screen and run a 3 to 5 second video ad that often appears the moment a user opens up the app. Think of the non-skippable YouTube advertisements. The ad shows up in the “For You” feed, and it allows you to include a website link or clickable hashtag.

For Instance, HBO Max has been recently running a video brand takeover ad that shows several brief clips of Big Bang Theory, displays a message that says “Big Bang Theory is NOW STREAMING,” and then prompts the user with a CTA to start their free trial.

It’s brief, to the point, and instantly conveys their unique selling position.

TikTok guarantees that a brand takeover will receive at least 8,900,000 impressions. But those eyeballs aren’t cheap. Brand takeover ads start at $53,000 per day and can run even higher if you want to create more impressions.⁷

TopView ads ($65,000 per day)

This is a prime ad placement since it will appear as the first video that appears when a user enters their TikTok feed. These are 60-second videos that ensure your target audience will see your messaging. Often, a brand will partner with a TikTok influencer to make it feel more like a natural plug than a direct advertisement.

TopView ads are pricey. For 7,400,000 impressions, you’ll need to pay $65,000 per day. And if you wish, you can turn your Takeover ad into a TopView ad by paying the $12,000 difference.⁷

In-Feed Video ($25,000+)

These are 5 to 15 second ads that will show up in users’ feeds. There are two types of in-feed video ads:

One day max – These are programmed to always be the fourth video in a user’s feed. Because of this, the best type of ad will blend in with other content. The campaign lasts 24 hours, and TikTok charges a starting point of $26,000 for 3,600,000 impressions.
Brand premium – These are randomly placed among the first 130 in-feed videos on someone’s app. The minimum price for this is $25,000.7

Hashtag Challenge ($130,000)

This was the very first ad format created for brands. TikTok allows advertisers to complete challenges or dances and then link them to a hashtag. The hashtag acts as a call to action for site users to create and share their own version over the next six days. The minimum price for a hashtag challenge is a hefty $130,000, but with an average engagement of 8.5%, it can be a worthwhile investment.⁷

For example, one of the most successful hashtag challenges in TikTok’s history was also one of the first. Guess Jeans created the #InMyDenim challenge, which showed someone wearing an out-of-style outfit and then transforming into a fashionable look that included Guess-branded denim clothes.

This campaign created more than 52.7 million impressions. To that end, for an additional $30,000, you can upgrade to the Hashtag Challenge Plus package. This gives your brand the banner, hashtag, challenge page, special content protection, and the ability to direct people to your store within the app.

Branded Effect ($45,000)

Branded effects are like Instagram filters, except they’re brand-sponsored 2D animated filters that can be triggered via hand or facial movement. After launch, the branded effects will appear on the first page of the effects panel for 30 days. This type of format will cost $45,000 for the month.

Influencers (TBD)

Paying influencers to promote your brand is one of the most effective and natural ways to leverage your content. They have already established a following who enjoy their videos and trust their opinions. When they recommend a brand, young people especially are more receptive to the message.

TikTok offers creator packages that vary in terms of cost and influencer reach⁷:

Mid-tier – For $12,000, you get access to five creators, each has less than a million followers.
Top-tier – For $35,000, you get access to five creators, each with 1 to 5 million followers.
Value hybrid package – For $20,000, you get access to two top-tier creators and three mid-tier creators.

Get On TikTok

Brands on TikTok understand that the world of traditional advertising is from a bygone era. There are newer, more creative, authentic ways to reach your target audience—particularly if they’re 30 or younger.

The app is only going to grow, so you should strike while the iron is hot. Even if you’re a smaller brand with a limited budget, you should at least create a profile and post regularly since it’s a free opportunity to engage your customers.

So, build a profile, acclimate yourself to the site, and start posting. From there, you can determine whether a paid event like a Hashtag challenge would be a worthwhile investment. To further your marketing strategy, go beyond TikTok marketing and read on how to get more twitter engagement or how to use twitter for business for helpful tips!