When you're running an ad campaign, one of the most important decisions you'll make is how you want to bid for your ads.
Bidding for ads means telling the platform (in this case, TikTok) how much you're willing to pay for your ad to be shown to users. This can be a difficult decision, because it affects both how much your ad will cost and how often it will be shown. The cost of campaigns is determined by factors like click-through rates, conversions and impressions.
The more competitive your bid is, the better chance you have of being seen by your target audience, so it’s important to choose a suitable bidding option for your ads.
For those involved in Dropshipping or E-commerce through TikTok, paying attention to bidding is especially key as it helps you reach more potential customers.
When it comes to the effect of bids on campaigns, think of it like an auction: the more competitively you bid, the higher chance you have of winning that campaign and getting maximum reach. However, setting a high bid price doesn’t always guarantee success –it needs to be combined with attractive creatives and a good CTR/CVR (Click-through rate/Conversion rate) in order to be effective.
The Cost per Mille/Thousand Impressions (CPM) bidding type is the most common and simplest way to bid for ad space. You pay for every 1,000 views of your ad. This is a good option if you want to ensure that your ad is seen by as many people as possible.
For example, if you're willing to pay $10 for every 1,000 views of your ad, and your ad is shown 1,000 times, then you'll be charged $10. If your ad is shown 5,000 times, then you'll be charged $50.
Keep in mind that this bidding type doesn't guarantee that your ad will be seen by a certain number of people. It just ensures that you'll be charged per 1,000 views of your ad.
When you're setting up your ads, you'll want to choose the "Optimized Cost Per Mille/Thousand Impressions" (oCPM) bidding type.
This bidding type will ensure that your ad reaches as many people as possible, and that you're only charged when your ad is shown to someone who's likely to be interested in it.
To set up oCPM, you'll need to choose the objective of your campaign. For example, if you're looking to increase brand awareness, you'll want to choose "Brand Awareness" as your campaign objective.
This is the most common type of bidding on TikTok, and with CPV, you're essentially paying for your ad to be seen 1,000 times. The cost per view will depend on how popular your ad is, and how much competition there is for that ad space.
For example, let's say you want to run an ad during the Super Bowl. The CPV for that ad space is going to be a lot higher than if you ran the same ad during the regular season, because there's more demand for ads during the Super Bowl.
The same goes for ads on TikTok. If you're running an ad during a popular time or in a popular category, you can expect to pay more per view. But if you're running an ad in a less popular time or category, you'll pay less per view.
You're probably familiar with CPC bidding from other platforms like Google Ads. With CPC bidding, you're charged based on the number of clicks your ad receives. So, if you have a CPC bid of $1.50 and someone clicks on your ad, you'll be charged $1.50.
CPC bidding is a great option if you're looking to get your ad in front of as many people as possible, and you're not too worried about conversion rates. After all, you're only paying when someone actually clicks on your ad.
When you're determining which bidding type to use for your TikTok ad campaign, it's important to test out a few options to see what works best for you. Here are a few bidding types to consider:
Once you've selected a few bidding types to test out, it's time to set up your campaign and start running your ads. TikTok offers a variety of ad formats, so be sure to experiment with different types of ads to see what works best for your business.
When you're ready to launch your ad campaign, the first thing you need to do is choose your budget and max bid. Your budget is the amount of money you're willing to spend on your ad campaign, and your max bid is the highest amount you're willing to pay for each view.
Once you've chosen your budget and max bid, you can start creating your ad. TikTok offers a variety of creative tools to help you make eye-catching ads that will stop scrolling users in their tracks.
Bidding on ads is an art. To maximize your budget, here are some tips to keep in mind:
Don't Limit Yourself. There’s no one-size-fits-all solution when aiming to reach your target goals. You'll have to find the right balance between cost per goal and engagement metrics. Keeping too much control over costs can hinder our platform's ability to identify lower cost opportunities that still meet your desired outcomes.
Know Your Audience. Having more data about the people you’re targeting makes it easier and cheaper to optimize your budget. If you're trying to get website conversions, structure your ad groups so they have a better chance of attaining this.
Set a High Budget-to-Bid Ratio. When starting a campaign, make sure you set a daily budget higher than your bid amount. It's difficult to get the best quality customers at the lowest bid price at scale. Also, low bids and budgets can result in spending more money for non-converting users or getting outcompeted by other advertisers for the same ad inventory. Therefore, we suggest setting as high of a budget-to-bid ratio as possible.
Increasing your TikTok ad budget and bidding?
Create multiple ads groups with varying budgets and bids.
Want to maintain your TikTok ad budget?
Create several ads groups with the same budget but modify the bidding. Set your expected CPA, then set your bid at least 30% of that.
For example, a $20 desired bid would become $20, $30, and $40 for each group, then you can adjust accordingly based on performance to find the most beneficial and lowest bid.
Which bidding type you choose depends on what you want to achieve with your ad. If you're looking for more views, then you should choose CPV. If you're looking for more clicks, then you should choose CPC. And if you're looking to reach a wider audience, you would choose CPM.
If you want to find out more about what we could do for your business, jump on a free strategy call with us to know how we can help you grow your brand!
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