Beyond awareness: maximize your ad spend on TikTok to drive growth

New research from Nielsen addresses this. The findings from the Nielsen Marketing Mix Modeling study (MMM), which used data from 15 CPG brands across Southeast Asia, have revealed the deeper role TikTok can play in helping brands drive media efficiency and deliver business growth. The findings showcase how advertisers can maximize their investment on TikTok and achieve a positive return on advertising spend (ROAS).

Ways to maximize ad spend on TikTok

The MMM study revealed brands that achieved a higher return on advertising spend were leveraging TikTok’s range of advertising formats and executing multiple frequency or always-on campaigns. TikTok paid media delivered a return on ad spend 1.6 times higher than other Nielsen measured media. Plus, the return on ad spend doubled to $2.6 with incremental earned impressions on TikTok.

Nielsen found brands that were using multiple ad formats simultaneously – such as In-Feed Video ads, Branded Hashtag Challenges and Branded Effects - achieved 12% higher return on investment compared to brands that used only one ad format. In addition, brands that executed campaigns for seven weeks, or more, achieved 14% higher return on advertising spend than brands that ran shorter campaigns.

The data also revealed that Branded Hashtag Challenge ads drove the highest return on ad spend and effectiveness in the region, followed by In-Feed ads. Brands that executed two or three HTC campaigns saw 20% higher return on ad spend over brands that only ran one campaign.

Joy on TikTok drives growth

While the stats are impressive, there’s more to the story. Positivity and joy are huge factors when it comes to TikTok, with users visiting the platform to feel good and get inspired. This positivity has a flow-on effect for brands, with users more open to engaging brands, participating in hashtag challenges, and leaning into the community. The upbeat 'vibe' on TikTok also contributes to strong purchase intent for users, which is evident by the more than 8 billion views on #TikTokMadeMeBuyIt.

This “joy” factor, as TikTok calls it, is supported by Kantar Research that found TikTok is the preferred advertising environment for both brands and consumers. The platform ranked number one for ad equity for the second year running in the Media Reactions 2021 report. The result is driven by audience attitudes which rate advertisements on TikTok as fun, entertaining and innovative.

Duncan Southgate, director of media insights at Kantar said in the report, “The extent to which consumers find ads of TikTok “fun and entertaining” is currently the single most differentiating feature in the global media landscape.”

This is also the case regionally, with TikTok’s more than 240 million users in Southeast Asia more likely to prefer TikTok’s content and creators, in addition to finding TikTok more authentic than other platforms, according to a separate Nielsen study.

What should brands do next?

So, what does it all mean for marketers?

TikTok’s immersive full-screen, sound-on formats, and its diverse video content and community offer massive potential for brands beyond awareness and engagement. The platform’s unique ad formats present opportunities to increase brand consideration and media efficiency, and business growth.

Brands looking to maximize return on investment on TikTok need to tap into the community with creative and authentic campaigns that leverage multiple TikTok ad formats to support a full-funnel strategy.

Marketers should abandon one-off campaign bursts and create media plans that accommodate an increase in campaign frequency throughout the year, and run sustained campaigns that include an always-on presence on the platform.

The Nielsen study reveals a broad planning approach, and marketers should apply a test-and-learn approach to advertising on TikTok. A greater exploration of TikTok ad formats and campaign durations will help brands optimize ad spend and focus on the appropriate mix of formats and frequency to achieve success.

To learn more about how to maximize return on advertising spend on TikTok, view the Nielsen Marketing Mix Modelling Report here. Localised report versions for Indonesia, Malaysia, and Thailand are also available.