Bidding Strategies

When creating your ad group, you will need to select your bid strategy in the Bidding & Optimization module. The bid strategy will determine how the system manages your cost per result, spends your budget, and how it delivers ads.


Bidding Strategies-JPG

TikTok Ads Manager currently supports several bidding strategies, including:

  • ​Bid Cap

  • ​Cost Cap

  • ​Lowest Cost


To see how to select a Bid Strategy for your ad group, watch the video below. The rest of this article will explain the benefits, use-cases, and availability of each bid strategy.



Bidding Strategies Overview

Bid Cap

Selecting Bid cap as a strategy helps keep the average cost per result below the bid threshold set by you. To use bid cap as a bidding strategy— you are required to enter in the maximum cost per result you are willing to bid, and the system will automatically optimize delivery against it.


  • ​Supported Advertising Objectives: Traffic, Reach, Video Views, App Install, and Conversions.

    • ​Bid Cap is only available for the App Installs objective when the ad group's optimization goal is set to Click.

    • ​Bid Cap is only available for the Conversions objective, when the Optimization Goal is set to Click.

  • ​Supported Billing Event: Cost per Click (CPC), Cost per Mille (CPM), and Cost per View (CPV).


Cost Cap

Using Cost Cap will give the system an average cost per result that it tries to achieve. This means that the cost per result sometimes will fluctuate higher or lower than the bid amount.


  • ​Supported Advertising Objectives: App Installs, Conversions, and Lead Generation

    • ​Cost Cap is only available for Conversions campaigns when the Optimization Goal is set to Conversion.

  • Supported Billing Event: Optimized Cost per Mille (oCPM)


Lowest Cost

The Lowest Cost bidding strategy does not require a bid, instead it will use the available ad group budget to generate as many results as possible at the lowest cost per result. This way Lowest Cost is always able to spend budget, no matter how competitive the auction environment is.


  • ​Supported Advertising Objectives: Traffic, Reach, Video Views, App Installs, Conversions, Lead Generation, and Catalog Sales.

  • ​Supported Billing Event: CPC, CPM, CPV, oCPM

    • ​Note: When using Lowest Cost, you will not need to enter a bid as Lowest Cost seeks to generate as many results as possible against the ad group's budget.


Comparison of Bidding Strategies

Bidding Strategy

Best For

Supported Advertising Objective

Supported Bidding Method

What the Bid Represents

Impact on Cost per Results

Impact on Budget

Bid Cap

Keeping your average cost per result lower than your bid.

Traffic, Reach, Video Views, Conversions (Clicks)

CPC, CPV, CPM

A maximum amount the system will spend to achieve a result.

The average Costs per Results will be less than the bid amount.

The budget spend capacity is dependent on the competitiveness of the cost/bid cap compared to other ads in the auction.

Cost Cap

Keeping your average cost around or lower than your bid, regardless of your budget.

App Installs, Conversions (Conversion), Lead Generation

oCPM

The average amount the system will spend to achieve a result.

Costs per Results may fluctuate day to day, but the average will be around or lower than the bid amount.


Lowest Cost

Spending your budget fully and getting the maximum possible results.

Traffic, Reach, Video Views, App Installs, Conversions, Lead Generation, Catalog Sales

CPC, CPM, CPV, oCPM

There is no bid, instead the system will try to generate as many results as possible given the ad group's budget.

Cost per Results may fluctuate day to day based on the changes in the auction environment - but you will always obtain the most results at the lowest cost based on your budget.

Expect the budget to fully spend.


Common Scenarios

Bid Cap & Cost Cap

Consider using Bid Cap or Cost Cap as your bidding strategy, when:

  • ​Your main priority is to control cost per result

  • ​Budget consumption is a secondary priority compared to having a stable cost per result, for example:

    • ​A media company selling subscriptions to their content, would use Bid Cap to control their Cost per Click, to ensure that they can meet their goals to achieve their targeted return on ad spend.


Lowest Cost

Consider using Lowest Cost as your biddings strategy, when:

  • ​Your primary goal is to generate as many results as possible and fully your advertising budget, for example:

    • ​A mobile gaming company would use Lowest Cost to drive as many downloads of their new game when it launches on the app store.

    • ​A recording artist could use Lowest Cost to generate the maximum amount of traffic to their website selling pre-sales of their new album.

    • ​An online florist would use Lowest Cost to fully spend their budget ahead of a national holiday, like Mother's Day.

  • ​You want to maintain stability in your auction spend at the expense of cost per result.

  • ​You want to save time from manually adjusting bids to optimize performance.

  • ​Avoid daily fluctuations in budget.


Best Practices

Bid Cap & Cost Cap

  • ​Campaign and Ad Group Setup:

    • ​At the Campaign level set the Budget to No Limit.

    • ​Set the ad group budget to at least 50 times the bid amount.

  • ​If traffic and spend are fluctuating and under delivering, try switching to Lowest Cost.


Lowest Cost

  • ​Campaign and Ad Group Setup:

    • ​At the Campaign level set the Budget to No Limit.

    • ​At the Ad Group set a daily budget that can cover at least 50 conversions (based your account's historical cost per result).

    • ​Segment Ad Groups by geographic location and operating system.

    • ​Use new creatives or creatives that have performed well in the past.

    • ​Do replicate creative within an ad group.

  • ​Post Learning Phase:

    • ​Only increase the ad group budget by a maximum of 50% at time, as increasing the budget will often result in a higher cost per results - as the system will find the lowest cost per results first and then increase the bid amount to achieve most results that the budget can support.

    • ​Wait for another 50 conversion and one day before adjusting the budget again.


To Compare Bidding Strategy Performance

If you are interested in comparing the performance of any of the bidding strategies, use the Split Test function to run an A/B and select Bidding & Optimization as your variable. This is recommend against running two separate ad groups or campaigns, as it will not yield conclusive results.


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