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Will TikTok Ads Be Worth It for E-Commerce Sellers in 2023?

Ashley Stander
By Ashley Stander
Joel Taylor
Edited by Joel Taylor

Published September 21, 2022.

A computer screen open on a TikTok Ads Manager account.

Love it or hate it, TikTok is taking the world by storm—not only for entertainment but also in terms of marketing. The fact of the matter is that if you own an e-commerce store and you want to keep up with the latest marketing trends, you are going to have to start using TikTok.

In this article, not only will you get a good guide to using TikTok ads for your e-commerce store, but we will also be answering important questions you may have when it comes to TikTok as a marketing platform.

Average Conversion Rates of TikTok Ads

The average conversion rate for TikTok seems to be hovering around 3.4%—pretty good compared to other platforms. Only Facebook has a good lead, but TikTok has grown so fast and is creeping up to Facebook. The reason for this is the short time it takes to absorb TikTok content compared to other social media platforms. It is far easier for them to watch a quick video than read an advert.

It's plain and simple: video content such as TikTok is the future, especially when it comes to conversion and click-through rates. Just remember that the conversion rates depend on the type of advert that has been run:

  • Topview ads: as high as 16%
  • Takeover ads: 7% - 10%
  • In-Feed ads: 1.5% - 3%

Cost of TikTok Ads

TikTok advertising is quite expensive when compared to other social media platforms.

TikTok ads start at $10 CPM, with Cost Per Click (CPC) at $1. This means that you will pay $10 for every 1,000 views. In addition, you must spend a minimum of $500 on each campaign.

It's important to remember that the cost of TikTok ads also depends on the different types of adverts you decide to run. For example, a branded hashtag challenge could cost you up to $150,000 but will feature your e-commerce store on TikTok’s Discovery banner.

Put simply, you probably shouldn't consider TikTok for an informal, small campaign.

Average ROI (Return on Investment) on TikTok Ads

Did you know that TikTok was featured in the 2020 Singular ROI Index among other top online marketing platforms? This incredible achievement is not something to overlook—especially considering that TikTok hasn't been around for a very long time.

The returns that can be expected from TikTok ad investments range from one advert type to the next, and from one company to the next. It's important to remember that the ROI is greatly affected by the platform's ability to provide a global reach. Not only that, but you can also find clever ways to reduce your ad spend by using influencers, user-generated content, and repurposed content from other platforms.

» Struggling with maximizing your return on ad spending? Learn what an acceptable ROAS is for e-commerce and read our guide to optimizing ROAS.

The Verdict

It's a fact: TikTok ads have delivered exceptional results for a variety of advertisers across multiple industries and will continue to do so in 2023.

The bottom line is that if you know your target market aligns with TikTok's general audience, you'll be able to use the (relatively) affordable standard ad fees and low minimum spend for new advertisers to effectively build awareness of your brand. It's what you'll get in return that will make it worth your while. However, to make your ad spend count, you should start by experimenting with small ad campaigns. Once you have analyzed your data, statistics, and metrics, you can move on to bigger (more expensive) campaigns that are informed by earlier smaller analyses.

TikTok ads are a worthwhile marketing investment, especially in terms of e-commerce. To substantiate that comment, let's look at some pertinent statistics:

  • TikTok fits into a retail social commerce industry that is expected to grow to $80 billion in the US by 2025.
  • TikTok's viral hashtag #TikTokMadeMeBuyIt has generated 11 billion views!
  • In September 2021, TikTok had a billion monthly active users - that's right, one billion!
  • In April 2020, TikTok ranked number one in overall and app store revenue.

In Closing...

When you look at the phenomenal growth of TikTok over the last few years, you can only imagine how much more the platform is expected to grow over the next few years. It is a bus you don't want to miss if you are serious about keeping up with the latest marketing trends.

Pro Tip: It is worth your while taking the time to research and explore the different marketing opportunities offered by TikTok. You can also track your ad performance using BeProfit once you get started, and don't forget to read our ultimate guide to effective e-commerce adverts to help you along the way!