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8 min

How to use TikTok ads to grow your e-commerce business

TikTok has become one of the most powerful social media marketing tools for e-commerce brands. This article dives into the different TikTok Ads you can leverage to help you gain visibility and awareness amongst its one billion users.

Cover photo for TikTok ads article showing a man opening TikTok on his phone, and another image of the TikTok account on another phone.
Written by
Manon Fischer
Published on
October 6, 2023

TikTok, with over one billion users, has become a powerhouse for e-commerce brands looking to expand their visibility and grow their business. Its carefully built algorithm, user-friendly interface, and innovative advertising options have allowed TikTok to become the ideal platform to connect brands with younger, highly engaged audiences. 

In this article, we will dive into how e-commerce brands can leverage TikTok ads to their advantage and supercharge their growth. 

The article will cover: 

The power of TikTok ads for e-commerce brands 

  • How do TikTok ads work?
  • The different types of TikTok ads 
  • TikTok ads pricing
  • How to set up your TikTok ads campaign
  • Start focusing on your social media marketing while Hive takes care of your operations
Blog component linking back to Hive's TikTok guide to help brands create the best TikTok advertising strategy to help grow their brand.

TikTok ads - how attractive are they for e-commerce brands? 

The TikTok algorithm has been built in a way that targets specific content to users based on their preferences and interests, therefore making the app highly engaging. By taking advantage of this algorithm, brands can target their TikTok ads and constantly engage with active shoppers –  1 in 3 users have bought a product they have seen on TikTok – and create the ideal ad campaign in perfect simplicity.

Retailers around the world have recognized the potential TikTok ads have to boost sales and grow their brands. According to Foreplay, reports have highlighted that 43% of TikTok users have tried a product or service they discovered on the app. Furthermore, 68% say they recognize brands and products that they have seen on TikTok.

TikTok ads – Introducing the basics

TikTok ads have become a driving force in many brands’ marketing strategies. The beauty of it, is that there is no one formula for creating a successful TikTok ads campaign – it can be easily catered to any brand. For example, Gymshark and Fenty Beauty by Rihanna are two completely different brands that have mastered the art of TikTok marketing, making them inspirations for many other brands out there.

Fenty Beauty has gone viral thanks to their tutorial-style TikTok videos and their creative product launches that engage and connect with TikTok users on a personal level. As for Gymshark, they have become one of the leading fitness brands on TikTok, reaching two million followers in six months, thanks to their humorous videos, challenges, and inspirational content.

Image comparing Fenty Beauty and Gymshark on TikTok to show the difference in TikTok ads strategy.

How exactly do TikTok ads work? 

TikTok ads are divided into three tiers: 

  1. TikTok campaigns
  2. TikTok ad groups 
  3. TikTok ads

Essentially, the TikTok campaigns will be the umbrellas holding the TikTok ad groups and individual TikTok ads. Your strategy will revolve around the campaign that you prepare in your TikTok Ads Manager, where you will define the name and campaign objective, set your budget, create an ad group, and prepare your ads.

TikTok ad groups will contain all the individual ads that you will film for this campaign. Lets say you are a cosmetics brand looking to launch a TikTok campaign for your skincare product line that includes a face wash and a serum. The structure would look like the following: 

Diagram illustrating how TikTok ads work. TikTok ad campaigns are the umbrellas that hold TikTok ad groups, and then individual TikTok ads.

5 types of TikTok ads your brand can leverage 

When creating your campaign, you will notice that there are different types of TikTok ads you can plan for. We refer to these as ad “positions” which depend on how prominently the ads will be displayed to users on TikTok. Here are five different TikTok ads you can use for your campaign:

1. In-feed ads

In-feed ads will typically be the most subtle advertisements that will appear on users’ for you pages (FYP). The FYP depends on the TikTok algorithm that was explained earlier on. These ads are more subtle as they tend to mimic the style of organic TikTok videos.

In fact, TikTok themselves says: “Don’t make ads, make TikToks” to encourage brands to embrace creativity and the ‘realness of TikTok’ and create a better connection with TikTok users. You can add a call-to-action (CTA) button in the ad that redirects users directly to a landing page, which is a great way to drive more traffic to your website. 

Unfortunately, because in-feed ads function just like any other TikTok video, users can easily scroll past them without watching or clicking on the CTA. 

2. Spark ads

Spark ads appear in users’ FYPs without interrupting the TikTok scrolling experience. These TikTok ads are actually regular videos a brand can promote, whether it originally came from the brand itself, an influencer or a regular tiktok user.

Viewers can duet these ads, re-use the sounds, as well as interact via liking, commenting, and sharing them which generates huge engagement.

These TikTok ads can redirect users to a landing page or TikTok account of your choice, meaning that you can send users to your own account. If the ad is user-generated content (UGC), it will redirect to the original person’s account, thereby boosting your credibility as you are promoting videos of actual clients using your products.

3. Top-view ads

Top-view ads are full-screen TikTok ads that appear at the top of a user’s FYP and will auto-play. These ads actually interrupt the TikTok scrolling experience and force the user to watch the video for at least 3 seconds before scrolling. 

These tend to be highly effective as they reach broader audiences, engage more, and therefore increase brand awareness. In fact, consumer goods companies claim to experience a 68% increase in sales effectiveness with these TikTok ads. 

4. Brand takeover

Brand takeovers are TikTok ads that will appear whenever a user opens the app. The campaign will last 24 hours and it is a great strategy to make you stand out from competitors since only one brand can take over for the day. 

TikTok ads used in brand takeovers can redirect users to an account, a branded hashtag challenge, or a landing page. In addition, the entire screen is clickable to redirect users to your chosen landing page, unlike infeed and spark ads where you need an actual CTA that users can click on. 

Brand takeovers are highly efficient, but require intense planning and organization. If you want to do a brand takeover, make sure to have different types of TikTok ads to show, and vary in the content so as to not be repetitive and avoid over-saturating some users with the same ads. 

This allows for maximum visibility, but comes at a steep price of around 47,000€ per day. 

5. Branded hashtag challenge

A branded hashtag challenge is  an opportunity for you to engage directly with your audience by challenging TikTok users to respond and post videos using your branded hashtag. This is a way to encourage users to interact with your brand on TikTok.

If your hashtag goes viral, it can help you gain brand awareness, without making actual ads. The fashion brand Guess is a highly successful example for this type of TikTok marketing. They started the #InMyDenim challenge that went viral, gaining more than ten million views and more than 5,500 users posting their #InMyDenim video. This attracted more than 12,000 new followers to their TikTok account. 

Image showing the #InMyDenim campaign on TikTok branded hashtag challenges

TikTok ads pricing

The TikTok ads pricing follows a cost-per-mile (CPM) model where you pay a certain amount per 1,000 impressions. The average being at 9.5€ per 1,000 impressions.

Many advertisers like to track their return on investment (ROI) by analysing cost per click value (CPC). TikTok generally offers a lower CPC compared to other Meta platforms as on TikTok it varies around €2.50 per click, whereas on Meta it tends to range around €3.50 per click.

In any case, the CPM for each type of ad will vary depending on the average amount of impressions it guarantees. Below you will find a table explaining each TikTok ads position in further detail, giving you a cost estimation and the benefits of each ad type. 

Table illustrating the different TikTok ad costs. This table shows the average price for each type of TikTok ad, and the potential this ad type has for your brand.

TikTok ads manager – how to set up your account and start your ads campaigns

TikTok ads image with two phones showing the TikTok app

Step 1: Create your TikTok Ads account

Go to the TikTok Ads Manager website and sign up for your business account.

Step 2: Choosing your ads objective

Select an objective that aligns with your advertising goals. TikTok lets you choose between three of them:

  1. Awareness: This is recommended if your goal is to gain the most amount of impressions with a minimum amount of spending.
  2. Consideration: This is recommended if your goal is to generate traffic to your website or TikTok account, increase engagement through more likes and followers, and increase views on TikTok videos.
  3. Conversion: This objective is recommended if your goal is to drive up sales, generate leads, or encourage people to take action by signing up to your newsletter or downloading your app, for example.

Step 3: Define your target audience

Identify the audience you want to target with your TikTok ads. This can be based on demographics, interests, behavior and other factors. TikTok offers extensive audience targeting options to help you reach the right users for your e-commerce brand.

Step 4: Determine your TikTok ads budget

Determine your daily or lifetime budget and set the duration of your ad campaign. This budget and schedule can be customized according to your preferences and your brand’s needs. If you are unsure about the budget, you can always go back to edit it later.

Step 5: Select the ideal TikTok ads

Identify which ad format (in-feed, top-view, etc.) you want to use for your TikTok campaign. You can now upload your ad content in your TikTok ads library, including engaging visuals and compelling stories that fit well with TikTok’s authentic style, and of course, matching your brand’s image. 

Step 6: Monitor and optimize your performance on TikTok

Once your ad campaign is live, you can regularly monitor its performance using the TikTok ads reporting tools. Analyzing your ad performance with this data, helps you identify the areas of improvement and continue to fine-tune your campaign so as to maximize results.

Focus on growing your brand while Hive takes care of your operations

If you’re ramping up your sales with TikTok marketing, then you’ll need a reliable logistics partners to get your products to your new TikTok community. Hive created the ultimate, comprehensive TikTok guide to help you create the best performing TikTok advertising strategy. Diving into more than just ads, this guide is perfect to help grow your brand through TikTok.

By working with Hive, you can benefit from a 3PL partner that has grown with D2C e-commerce at its core. This means you can work with a partner that understands the fluctuations and flexibility needed with peak seasons such as Black Friday. 

When partnering with Hive, you can put all of your focus on marketing and product development, with the peace of mind that your operations are in good hands.

Blog component linking back to Hive's Black Friday playbook to help brands create the best black friday strategy.