Make your ad spend go further on TikTok in 2022
In this article, we look at how TikTok for Business' suite of full-funnel, immersive ad solutions delivers positive return on advertising spend (ROAS) of up to US$2.6.
Brands in Southeast Asia (SEA) knocked it out the park on TikTok in 2021. With more than 240 million users in the region creating over 800 million videos and generating over a trillion views on our platform each month, we saw marketers lean into the opportunity to boost brand awareness and engagement. And there's even more value for marketers to unlock on TikTok in 2022.
In this article, we look at how TikTok for Business' suite of full-funnel, immersive ad solutions delivers positive return on advertising spend (ROAS) of up to US$2.6. Using Marketing Mix Modeling, we worked with Nielsen to uncover data-driven insights on how brands can maximize ROAS on TikTok. You can check out the results for yourself here.
So, let's dive in to see how TikTok is the platform for your business to achieve growth in 2022.
On ROAS and why it matters
First, let's cover an important definition - ROAS is a measure of media efficiency indicating incremental revenue per advertising dollar spent. It's a major return-on-investment (ROI) metric for marketers to track if they're spending their budget in a way that drives sales.
Nielsen's report showed that TikTok leads the pack when it comes to ROAS (more on that later), but why is this important right now? According to GWI's 2022 predictions of major consumer trends the key battleground for marketers this year will be competing for consumers' waning attention. With competition heating up between brands trying to engage screen-weary audiences, marketers will want to keep an eye on ROAS to ensure their media strategies are making the best-possible use of their budgets.
Tips to maximize ROAS on TikTok
Now it's time to see how your brand can turbocharge business growth this year, as Nielsen's research showed that brands can unlock significantly more value on our platform.
Paid media on TikTok delivers ROAS that's 1.6x higher than on other platforms. The key is to think of TikTok as a platform to achieve full-funnel marketing objectives. Look beyond brand awareness and engagement, and strategize marketing activities at the consideration, purchase, and even advocacy stages of the funnel, with sustained, multi-ad-format campaigns.
In fact, Nielsen's analysis further showed that brands' ROAS doubles with incremental earned impressions generated from paid campaigns as part of the Branded Hashtag Challenge (HTC) package. HTC ads drove the highest ROAS and effectiveness in SEA, making them the best-performing advertising option.
Key tips:
By combining multiple ad formats in their campaigns, brands can see up to a 12% boost to ROAS. This involves strategies that leverage the synergies of a multi-pronged approach, such as pairing HTC with In-Feed Ads to maximize audience reach and engagement. In 2021, TikTok launched an array of innovative new ad formats to help brands of all sizes drive business impact. Read more here about them, including Collection Ads and Dynamic Showcase Ads.
Staying on-air for longer also lifts ROAS. Nielsen found that TikTok ad campaigns lasting more than seven weeks drove 14% higher ROAS. Read more here about how an "always-on" approach drives deeper engagement and better performance for brands.
And frequency has an impact too. Brands that executed two to three HTC campaigns in a year saw 20% higher ROAS than brands that only ran one. Unique to TikTok, HTCs make it easy for brands and users to join in on the fun, and build communities around users' passion points. Read more here on how HTC campaigns keep your brand top-of-mind, and generate full-funnel impact throughout the year.
Why TikTok delivers positive ROAS
The reason for our positive ROAS is simple: our platform brings users joy. Authentic, full-screen, and sound-on content in a personalized for-you feed creates an entertaining environment that our users love. With 7 out of 10 users visiting TikTok when they want to feel joy, TikTok is home to diverse communities and content that inspire and create positive engagement.
And happy users make for happy buyers, as users in a positive mindset are more likely to purchase a brand after seeing an advertisement. In fact, in a NielsenIQ survey of 9,800 social media users in SEA, TikTok users claim to be 1.5x more likely to buy an item after seeing an ad on our platform, proving that joy drives strong purchase intent.
The TikTok community is primed to engage and share branded content, as the platform fosters a lean-in community that embraces brands just as much as music, trends, interests, and more. Drawn to authentic, fun-packed content, TikTok's engaged communities found ads on our platform 75% more entertaining, 70% more enjoyable, and 60% more memorable compared to other global media platforms, according to the 2021 Kantar Media Reactions report.
In conclusion
Nielsen's report findings are clear: Marketers should leverage sustained, multi-ad-format strategies on TikTok to drive incremental sales and business growth. It's important to note that these findings should serve as guiding principles. We strongly recommend that brands adopt a test-and-learn approach to arrive at the optimal mix of duration, frequency, and ad formats to maximize ROAS, given that each brand is unique.
As you go into 2022, remember to think full-funnel, keep an eye on your ROAS metrics to ensure your media strategies are working as efficiently as possible, and most important of all, embrace the power of joy. When brands focus on entertaining rather than treating audiences as consumers only, brands can connect with their audiences on their terms and in turn, drive sales.
Read the Nielsen SEA report here. Be sure to catch the localized versions for Indonesia, Malaysia and Thailand.
