Why advertising on TikTok struggles

The rise of TikTok, the Chinese platform that was born in September 2016 and celebrated one billion users last September, has profoundly changed the way we relate to social. Given its popularity, the sophistication of its algorithm and its frenetic use, this social would seem the perfect place to hook new customers, as witnessed by the increasingly popular hashtag #TikTokMadeMeBuyIt. A success that has stirred up quite a bit of controversy recently, now that Instagram's static feed has evolved in favor of videos, somewhere between emulations and a galloping fear of missing out on the part of Meta's top management. And so even fashion, which for decades preferred still screens to tell the world about itself, may have to convert to video to get back into the algorithm's graces. Yet despite booming popularity and lower costs than Instagram when it comes to sponsorship, brands and experts say that the return on ad spend on TikTok is still not up to par with more established platforms. At a time of great transformation, when the privacy changes introduced by Apple in the iPhone last year have made it increasingly difficult for companies to target ads and measure their performance, and the end of the post-pandemic e-commerce boom has created uncertainty around the usefulness of online ads, companies with limited budgets are faced with a choice: which is the best platform for their advertising?

In June, ads on TikTok cost an average of $9.46 per thousand impressions, compared to $14.12 on Facebook and Instagram. According to data collected by analytics platform Measured, through clients such as Hammitt, Savage x Fenty, Rothy's, etc., and reported by BOF, for every dollar these brands spent on TikTok that month, they saw a median return of $0.52, compared to $1.56 for Facebook and Instagram. But, while the Chinese platform is cheaper than its more established competitors, its ability to push users to actually purchase a product is still in its infancy. «It's a brand awareness game» - Calla Murphy, vice president of digital strategy and integrated marketing at Belardi Wong, told BOF. «Since Facebook is becoming so expensive, where do you get the impression volume or the brand awareness volume? This is where many clients turn to TikTok». In fact, according to statistics, when ads for a specific product are placed on TikTok, the result is a higher number of search impressions and, thinking beyond the immediate return, it would be a mistake not to invest a certain amount on TikTok right now.

In a statement to BoF, TikTok pointed out that several brands have run successful advertising campaigns on its platform, citing examples such as Aerie and Ray-Ban. It added that it is constantly developing tools to help brands and creators connect with shoppers, such as the recently introduced shopping ads, which offer advertisers new ways to highlight products. «Overall, the brands that have been successful on TikTok are those that think beyond traditional, outdated marketing tactics and make the most of the opportunity to leverage the engaging and diverse nature of the TikTok community» commented a spokesperson. «You need to utilise the whole marketing mix - Murphy added - it can't just be TikTok. It can't just be Meta. It can't just be Google. It can't just be emails. It can't just be SMS. You need to have a solid digital marketing funnel across all channels.»