About Scaling Auction Ad Spend

When you create auction ads on TikTok Ads Manager, you will tell the system the outcomes you want to achieve, and the amount of budget you are willing to spend to achieve it. But because the ad auction is a dynamic marketplace with other advertisers competing for the same ad placements, there is no way to guarantee the results.

This is where scaling comes in. You start scaling your ad spend by using a relatively low budget to test a variety of campaign settings and creative. Then, when you find a winning combination you can start to increase the budgets to create more impact. However, the type of campaigns you run will generally determine how you measure success.

When you create auction ads with the purpose of generating sales, a common way to measure success is by the quantity of goods sold. One way to measure this success is to evaluate your return on ad spend (ROAS), which is the total amount of products sold divided by your advertising costs.

For these types of conversion campaigns, scaling your ads is the process of increasing your ad spend while continuing to generate a positive ROAS. You can think about scaling conversion ads like this; imagine you are testing a series of ad groups on TikTok and one performed well, but because your initial budget was low, it had little impact on your business.

For example, let's say you sell bicycle accessories online and you spent $20 on auction ads that led to $100 of sales on your website. While this campaign represents a strong ROAS of 5x, the total impact on your business's overall sales was limited.

However, when you publish campaigns, where success is not measured by sales, but by other metrics like clicks or impressions, you will need to use other signals, to determine when it is time to increase your budgets. For non-conversion campaigns, you can think of scaling as a way to increase the number of total results you are achieving for your budget while maintaining your targeted costs.

For example, if you are running a Reach campaign you might use metrics like unique users reached or conduct a Brand Lift Study to define your success. However, when you use these metrics to evaluate success you will be unable to calculate a return on ad spend. Instead, you will need to determine if your cost per unique user reached is above or below your target.

But no matter your objective, when we talk about scaling auction ad spending, we're talking about structuring your campaigns in a way that lets you increase your budgets while magnifying the impact on your business.

However, when it comes to scaling your ad spend, increasing your budget will not always generate more results. In fact, if you do not take the time to understand when to start scaling and the underlying factors that impact ad auction performance, you are at risk of misusing your budget.

When to Start Scaling

For Conversion campaigns

At the most basic level, you'll be ready to start scaling your conversion campaigns when an ad group generates at least 50 conversions within a week and when the campaign meets or exceeds your performance metrics.

Having at least 50 conversions is critical because TikTok Ads Manager uses a learning phase to find the right audience for your ads. And during this exploration, your cost per action will fluctuate until the system is able to identify the people most likely to convert, which takes the system about 50 conversions.

This is important because if you attempt to calculate your ROAS before passing the learning phase, you won't have accurate data about your true advertising costs and cost per action. And without knowing those figures, you will be unable to determine the degree that you should increase your budgets and the budget-to-bid ratio you should use in future campaigns.

So once an ad group has generated 50 conversions in a week, and has a profitable ROAS, you are ready to start scaling your budget at a rate that is in line with your tolerance for risk.

For Non-Conversion campaigns

For campaigns where you are unable to calculate ROAS, you can use this method to determine if you are ready to scale.

First, look at your targeted cost per action. Are the results you're generating matching your definition of success? If they are, then you can look at how much of your campaign or ad group budgets are being spent.

If you see that your campaigns and ad groups are spending 90% to 100% of their budget, and your cost per action, is at or below your target. This is a strong indicator that the system will be able to sustain the results while reaching a wider audience.

Optimization Tactics to Consider When Preparing to Scale Ad Spends

Creating predicate, profitable, and repeatable campaigns is the foundation for creating a scalable ad-buying system. To this end, we have laid out several optimization tactics that will help you create scalable ad-buying systems.

• ​Account Structure: The way you configure your campaigns, ad groups, and ads will make it easy to measure your success and identify problem areas quickly.

• ​Budget to Bid Ratios: The relationship between your budgets and bids will determine if your campaigns will pass the learning phase, ensuring your ad groups can quickly achieve a stable CPA.

• ​​Targeting: Use TikTok Ads Manager's audience creation tools and targeting options to reach people throughout the various segments of your funnel.