Friday, February 19, 2021

TikTok Ads for eCommerce: What We Learned

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We wanted to give TikTok ads platform a test. So what better way to test than put our money on the line and give it a test for one of Ascenial’s own brands: Cat Bandanas.

Our goal was simple — test our product line of cat bandanas with a budget of about $1500 for about two weeks and learn as much as possible about TikTok ads platform and it’s viability for our 7 figure clients.

Let’s dive into it!

The Product


Keep in mind we do eCommerce advertising, and the brands we own and run ads for are eCommerce as well.

This product had an AOV of over $20, as most people bought 2.

The Creatives

It’s no surprise, TikTok style videos have taken over the social media world. They’re being shared on all other platforms and they perform extremely. Naturally, we wanted to test them in their natural habitat.

Our creatives consisted of four videos, with different styles, ranging from “explainer videos” to “testimonial videos.” All of them kept the user-generated style that’s familiar to the TikTok users, in order for them to be appear as native videos.


And here’s the first big lesson we lesson we learned from our experiment: you CANNOT use assets that are filmed using the TikTok app. The presence of the TikTok logo automatically triggers the platform to disapprove the ads.

Targeting Capabilities

Compared to the more broadly used paid platforms (Facebook/Instagram, Snap, Google), the targeting capabilities of TikTok are much broader, with fewer options and less granularity than you might be used to.

The narrowest of audiences for TikTok is at least 3-4 million people. As I was used to the targeting offered by Facebook, we were surprised to see such an audience fail to deliver initially, due to it being “too restrictive” for the algorithm.

In our case, we tested three bigger audiences:

  • Female audiences, ages 18-34 in an Interest in Pets
  • No limit gender audiences, ages 18-35 with in-app behavior related to “Cute Pets”
  • Female audiences, ages 18-35 with a Interest in Apparel & Accessories AND Pets

At the time of writing the article, the platform had difficulties in ensuring the proper ad delivery based on the selected website event. We found ourselves having to optimize for 3 different events (Add to cart, View content and Complete Payment) until “Add-to-Cart” event suddenly worked and the algorithm started to deliver the impressions.

Results

Before sharing our results, here’s the most relevant piece of information regarding TikTok’s tracking: the only purchases that are counted by their reporting system are IN-SESSION. That means if someone will make the purchase sometime later, it will most likely be attributed to direct or organic traffic.

Compared to the other platforms, the click-through-rate for TikTok ads are a pretty poor, between 0.62% and 1.2% in our experience. It’s not particularly surprising, as most of the platform consists of easy to digest videos and and endless supplies of that. So the users are used to quickly and mindlessly, swiping to the next video.

The CPCs are pretty cheap, between $0.35 and $0.60 for audiences which are quite broad. The CPMS are just as cheap running, between $2.5 and $5. This is not surprising to us, the inventory of videos, and of usable ads placements, is huge in TikTok and users go through probably hundreds of videos in a session.

The final purchases? $300 in revenue for $1,500 in ad spend, or a 20% ROAS - not good, right?

However, keep in mind the AOV for this product was roughly $20…If your product has a higher AOV, then this might be able to work!

Key Takeaways

Running this experiment, there were plenty of lessons learned.

  • The fact that tracking is unreliable to being unable to use natively created videos, it’s been a wild ride in getting the conversions campaigns delivering. Fortunately, the customer support is quite reliable and swift in responding to your inquiries.
  • Although we tried to be reserved in our expectations, we hoped to at least break even in our spending. While running the TikTok experiment, we closed our Facebook ads, which were doing decently to assess the true viability given tracked purchases were only “in-session.”
  • We did see a small bump and a few sales, that were not directly attributed to TikTok due to the poor tracking system, but with some simple math and a few UTMs, we discovered that we probably had under $300 in sales, for a budget of about $1500.
  • The type of products that could work on TikTok are trendy products, the current equivalents of fidget spinners — lashes, beauty products and accessories, which are targeted at a broad spectrum of people. Perhaps “cat bandanas” are too narrow (which may have affected CTR) and the AOV is too low (on average $20).
  • While TikTok as a platform has the ability to drive increased brand awareness for your brand, if your budgets need to be optimally spent in order to maintain profitability, we would advise keeping your money into the proven platforms, such as Facebook and Instagram.

In our opinion, TikTok ads could become reliable in 1-2 years, as long as the attribution and reporting gets fixed.

Since most brands cannot afford to spend directly into brand awareness and rely on paid as a driver of revenue, they become viable for companies spending at least $1 million per year, with the goal of driving people into the top of their funnel and letting all the other channels to drive users further down the funnel.

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