New research
Unlocking TikTok's True ROI: Insights from a Nordic E-commerce Study
In the dynamic world of digital marketing, understanding the real impact of your advertising efforts is crucial. A recent study conducted in collaboration with TikTok, the digital agency Precis, and the measurement platform Alvie sheds light on how traditional attribution models may significantly undervalue TikTok's contribution to e-commerce success.
Rethinking Attribution: Beyond the Last Click
Traditional attribution models, like the Last Non-Direct Click (LNDC), often credit the final touchpoint before a conversion, overlooking the influence of upper and mid-funnel activities. This approach can misrepresent the effectiveness of platforms that excel in brand discovery and consideration phases. The study analyzed data from ten Nordic e-commerce brands across fashion, home goods, and consumer products. By deploying advanced attribution methods, the research revealed that TikTok's Return on Investment (ROI) is, on average, 10.7 times higher than what LNDC models suggest.
TikTok's Full-Funnel Impact
TikTok's unique content ecosystem fosters authentic engagement, making it a powerful tool throughout the customer journey. The study's findings highlight TikTok's effectiveness across various campaign objectives:
Brand Awareness Campaigns: Achieved a median ROI of 2.6.
Consideration Campaigns: Yielded a median ROI of 3.9.
Conversion Campaigns: Delivered a median ROI of 3.1.
Additionally, brands observed a 26% increase in branded search activity within one to two months following TikTok campaign activations, indicating a significant halo effect.
Strategies of High-Performing Brands
The study identified key practices among brands that maximized their TikTok ROI:
Always-On Approach: Maintaining a consistent presence rather than sporadic campaigns.
Authentic Content: Utilizing User-Generated Content (UGC) and native-style creatives that resonate with the TikTok community.
Engaging Storytelling: Crafting narratives that align with TikTok's storytelling frameworks, such as "Results First & Work Backwards" and "Built into Routine."
Optimized Video Length: Producing videos longer than 15 seconds with compelling hooks to capture and retain viewer attention.
These strategies align with TikTok's emphasis on authenticity and creative storytelling, as outlined in our Creative Strategy Guide for Small Businesses
Embracing Advanced Measurement for Accurate Insights
To truly capture TikTok's value, it's essential to move beyond traditional attribution models. Advanced measurement tools, like Alvie, provide a more comprehensive view of how TikTok influences the customer journey, from initial discovery to final conversion. By adopting these advanced analytics, brands can make informed decisions, optimize their strategies, and fully leverage TikTok's potential as a growth engine.
Leveraging MMM and Causal Impact methodologies, across ten leading Nordic Ecommerce brands, this very robust study not only confirms TikTok's ROI to be significantly higher than what traditional last-click models capture - it highlights TikTok’s unique strength in driving early demand, with ROI for both brand awareness and consideration campaigns outperforming other social platforms. It validates what we see every day: TikTok helps brands spark discovery and move audiences meaningfully closer to conversion, making it an essential engine for upper- and mid-funnel growth.
Ready to Elevate Your TikTok Strategy?
Discover how your brand can harness TikTok's full potential by exploring our Creative Strategy Guide and Storytelling Frameworks.
Click here to read more about the key findings from this study; "What last click missed".
Note: This blog post is based on a collaborative study between TikTok, Precis, and Alvie, focusing on Nordic e-commerce brands. For more detailed insights and case studies, please contact our team.