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TikTok Works: Ads on TikTok drive business impact
TikTok is where communities come together to create culture and engage with their favourite brands. And all of that interaction isn't just helping users discover new businesses and products, it's also driving results.
In order to understand the impact TikTok can have on business outcomes, our Marketing Science team launched six separate measurement studies with our trusted third-party partners employing multiple methods across verticals.
Introducing TikTok Works, a series exploring how TikTok drives results for brands in the following ways:
Impact: TikTok drives business outcomes.
Growth: TikTok is the fastest-growing channel for product discovery.
Advantage: Creative on TikTok is effective in building brand equity.
The results show that TikTok ads work and shed light on the best ways to put them to work for your business.
1. Impact: TikTok drives business outcomes.
Various studies have shown that TikTok generates business impact across several dimensions, including return on ad spend, sales efficiency, incremental sales and offline sales.
Over the past two years, three separate Nielsen Media Mix Model Meta Analyses commissioned by TikTok (1) have consistently shown that TikTok drives positive ROAS and sales efficiency across the CPG vertical. According to the studies, the US saw a 96% higher paid media ROAS versus all digital media measured in the models, and almost three times the offline sales efficiency. Other regions such as the Middle East, Europe and Southeast Asia also saw similar increases.
Our partnership with NCS (2) has also demonstrated TikTok’s ability to generate incremental sales for U.S. CPG advertisers at the campaign level. We've seen a statistically significant lift in 90% of our NCS campaigns, and our ROAS average of $2.99 is two times higher than NCS norms.
Finally, TikTok and NCS conducted a Total Sales Lift study (3) that analyzed 11 campaigns across the beauty, personal care, and food and beverage categories. Despite having much lower frequency than TV ads, TikTok ads generated roughly the same amount of incremental dollars per 1,000 impressions (DPM) as TV ads ($15.40 vs $16.80). TikTok ads pack a punch and do it very efficiently, at nearly twice the ROAS compared to TV.
2. Growth: TikTok is the fastest-growing channel for product discovery.
TikTok is playing an increasingly important role in customers' path to purchase, especially in capturing first-touch discoveries and driving acquisitions. According to a post-purchase analysis conducted by Fairing (4), TikTok is the fastest-growing channel for discovery—providing real-world commerce opportunities for direct-to-consumer brands.
After making an online purchase, consumers were asked to identify the channel where they first heard about a product they bought online, and nearly 15% of product discoveries began on TikTok. Just a year ago, that number was 4%, so TikTok's influence is growing rapidly.
TikTok is also helping brands win over some of the hardest audiences to reach—non-brand and new-to-category buyers—those who have only previously purchased from a competitor or are exploring a new type of product for the first time.
Acquisition is often one of the most difficult and expensive challenges for marketers, but that same head-to-head NCS analysis (3) shows that TikTok is four times more efficient than TV at acquiring new customers.
3. Advantage: Creative on TikTok is effective in building brand equity.
Creative is one of the most important factors for driving impact in a marketing campaign, and it's one of the best ways for clients to unlock ad effectiveness and user attention. To better understand what ads that drive results on TikTok have in common, we partnered with Kantar to validate our creative learnings to provide proof of how TikTok drives brand equity compared to TV and digital ads.
According to the Kantar Link AI analysis (5), more than 3,500 measured TikTok ads outperformed their own digital and TV norms by 15–20% on multiple metrics, including persuasion (the likelihood an ad will drive immediate brand predisposition) and enjoyment (the resonance and appreciation of an ad). When viewers like the ads, the ads are more effective.
It showed that creative that blends seamlessly into the platform's culture of authenticity and community-driven entertainment consistently outperforms repurposed or adaptive ads, especially when brands understand how to use TikTok-specific traits like music, frequent scene changes, voice-overs and text overlays.
What does this mean for marketers?
These studies show how TikTok works to deliver business results for marketers through effective, engaging ads that resonate with audiences. Here are the key things to remember:
TikTok is an effective and efficient part of the marketer's media mix.
When launching new products, services or brands, TikTok is a growing source of discovery.
TikTok creative can deliver across multiple business objectives, and performance is better when working in tandem with our creative solutions and guidelines.
To equip your marketing campaigns with more research and data about TikTok, check out our TikTok Insights tool here. You can easily search, share and download insight cards by industry, audience types, event, region and more!
Source: TikTok Marketing Science, CPG Media Mix Model Meta-Analyses, METAP, US, EU, SEA, Conducted by Nielsen, 2020-2021. Countries Represented: METAP Study = KSA, UAE, and EG, US Study = US, European Study = UK, Germany, France, Italy and Spain, South East Asia Study = Indonesia, Malaysia, Thailand * Food and Beverage category
Source: TikTok Marketing Science, CPG Meta-Analyses+ Closed Beta, US, Conducted by NCSolutions, 2021-2022
Source: TikTok Marketing Science Offline Sales Lift study, conducted by NCS, 2022
Source: TikTok Marketing Science Post-Purchase Analysis conducted by Fairing, 2022
Source: TikTok Marketing Science Creative Coding Analysis based on 3,500 TikTok ads that ran from 1/1/2021 - 10/1/2021 representing all major verticals, conducted by Kantar, 2022