Bidding & Budget Solutions to Drive TikTok Auction Ad Performance

Last updated: July 2024

At TikTok for Business, we want to help you grow your business! In this article, we've put together a list of recommendations and tips to help you get the most out of your budget and bidding when creating auction ads on TikTok Ads Manager.

Budget

Use your expected cost per action to calculate your Ad Group's daily budget:

  • If you don't allocate enough budget for your ads on TikTok, you will lose out on opportunities to find ways to improve campaign performance. TikTok Ads Manager uses a Learning Phase where the system identifies the best audience for your ads, so you'll need enough budget to pass this phase and get 10 conversions. The formula to calculate how much budget you'll need to reach 50 conversions is the target CPA multiplied by 10. (ad group daily budget = target CPA x 10 conversions)


Bidding

  • There are two factors that you should consider when determining your bids:

    • How much is a new customer worth to your business? This can be approached from a transaction or a lifetime value (LTV) perspective.

    • How much are you willing to spend to acquire a new customer? This can range from making full margins to breaking even and will be your target cost per acquisition (CPA), which can then be used as your bid or cost cap.

  • Bidding for clicks will give you the most impressions for your budget. Bidding for conversions will give the most actions on your website or app. We recommend the following bidding optimization strategies based on your campaign type:

    • Conversion campaign: Select maximum delivery as your bid strategy to use all of your daily budget.

    • Auction campaign: Use cost cap with the suggested bid. This allows you to control your daily cost per result.

    • App install campaign: Optimize based on users taking a specific action in your app, we recommend using App Event Optimization (AEO). For AEO, your bid should be set as your target CPA.

  • Bidding for clicks will give you the most impressions for your budget. Bidding for conversions, will give the most actions on your website or app.