TikTok Ads Explained: Value-Based Optimization (VBO)

There is a surefire way to connect with audiences that have potential to become a future high value customer - we call it Value-Based Optimization (VBO).

You’re probably thinking, what on earth is VBO? It is a simple to use feature which allows you to optimize your campaign so your ads are shown to people who are likely to spend more on your products.

Just as optimizing for conversions aims to create the lowest cost per action, optimizing for value aims to give the highest return on ad spend (ROAS) by looking for the conversions with the highest cart value.

VBO is supported across both websites and Android apps for regular ads, and supports objectives including increasing app installs and conversions.

For web advertisers, setting up the TikTok Pixel with developer mode is your first step to using VBO. From there you can apply your bid strategy (either a minimum return on ad spend or highest value per purchase), add the budget for your VBO ad group and then your targets.

We suggest you allow these ads to run for seven days in order to create strong indicators about performance and results which will then allow you to most effectively optimize who and how you are targeting in your highest value groups. From there you can begin to use VBO to grow and connect with audiences that will drive higher value purchases.

VBO in action

A popular clothing brand running ads on TikTok were looking to utilize VBO to increase the number of conversions in an attempt to achieve a higher than average ROAS. By introducing VBO to their campaign, the brand aimed to increase the average ROAS and reduce the CPA per conversion.

To achieve these results, the clothing brand released a new optimization goal that focused on quality of users rather than quantity, leading to some outstanding results; by enabling VBO, the clothing brand decreased their CPA by a massive 54.2%, while seeing conversions climb by 95% and ROAS by 8.9%.

Tips & tricks to get started

To introduce VBO into your next TikTok campaign, follow our top tips to get started:

Maximize Retargeting to see higher ROAS Begin your VBO campaigns with Retargeting Ad Groups to capitalize on custom audiences created from upper/mid-funnel campaigns.

Let your VBO campaign run for at least 7 days Results may fluctuate at first, so avoid any adjustments for the first week. After this, you should have a strong indication of the campaign's performance and can optimize accordingly.

Set a reasonable minimum ROAS Once your campaign has run for 7 days, you should have a good idea of your ROAS. Set your minimum ROAS to 80% of this.

Make full use of Audience Analysis A detailed analysis of Ad Impression delivery will provide you with insights that will help with targeting criteria for your VBO campaign.

If you're already set up in TikTok Ads Manager, then you can go ahead and set up a VBO campaign today! If you need a little more help getting started, we've got you covered.