How to Attract Customers With TikTok Ads (Hint: Lowest CAC)

TikTok Ads are increasingly becoming popular for brands, businesses, and individuals. The social media giant reached a whopping 1.92 billion users in 2023 and is expected to reach 2.2 billion by 2027 (Statista).

With the influx of engaged users on the platform, TikTok Ads are relatively unsaturated compared to other Ad types. Getting visibility for your TikTok Ads doesn’t require loads of followers; it requires relevant and entertaining ads targeting the right audience.

You need a winning TikTok customer acquisition strategy to create successful TikTok Ads that achieve your campaign objectives and lower your marketing costs.

This article covers an 8-step guide for attracting customers with TikTok Ads at the lowest possible Customer Acquisition Costs (CAC).

Let’s get started.

Is TikTok Ads Worth It?

TikTok generated $4 billion in advertising revenue in 2022 (Statista) and $3.8 billion in consumer spending in 2023 (Statista).

While the unique opportunity to reach a vast audience that TikTok Ads offers is obvious, you are not wrong to wonder if it is worth it. Is TikTok Ads the best option to reach your marketing and sales goals?

The general answer is a positive “YES.” TikTok can transform your business, especially CPG (consumer packaged goods) brands. However, multiple factors can determine whether TikTok Ads is worth it.

• Who is Your Target Audience? TikTok offers you access to a vast and highly engaged audience. However, the most popular demographics are Gen Zers and Millennials. 60% of TikTok users are Gen Zers (Wallaroo Media). If your ad targets a younger audience, TikTok is the perfect platform.
• What are Your Advertising Goals? Do you want to increase your brand’s awareness, boost sales, and drive traffic to your website? TikTok Ads are worth the effort.
• What is Your Advertising Budget? While the cost of TikTok ads varies due to competition and targeting options, the platform leaves room for flexible ad spending. However, setting a realistic ad budget is vital to attracting a good return on investment (ROI).
• What is Your Creative Strategy? TikTok is popular for its high engagement rates compared to other social media platforms. Create creative and engaging content that TikTok users love to maximize your ads. Your creative strategy must reflect the platform’s engaging and creative nature. The best TikTok ads don’t feel like ads at all.

Advertisers see an average return of $2 for every $1 spent on TikTok ads (TikTok). However, success with TikTok ads will depend on your ads' attractiveness to your target audience and the ability to hit your ad objectives.

How Much Do TikTok Ads Cost?

One of the biggest disincentives to using TikTik ads is its rising costs over the years. However, TikTok ads tend to be less competitive and cheaper compared to more established ad platforms like Meta.

TikTok obligates advertisers to spend a minimum of $500 per advertising campaign. There is a minimum daily budget of $50 at the campaign level and $20 at the ad group level.

Beyond this obligation, advertisers can choose how much money they want to invest in running an ad campaign.

TikTok advertising prices start at $0.50 CPM and $0.02 cost per click. However, the cost of running a TikTok ad varies based on your industry, ad goal and type, and optimization strategies.

TikTok Bidding Models	What It Means	Minimum	Average
Cost Per View (CPV)	The price you choose to pay per view.	$0.01	$0.10-$0.30
Cost Per Mile (CPM)	The cost you choose to pay per 1,000 impressions.	$0.50	$10
Optimized Cost Per Mile (oCPM)	The price you pay per one thousand impressions for targeting highly convertible users.	$4	$4-$8
Cost Per Click (CPC)	The cost you choose to pay per click.	$0.02	$1
Cost Per Action (CPA)	The price you pay for a specific action.	$1	$1-4

How to Run Successful TikTok Ads with the Lowest Customer Acquisition Costs (CAC)

Maximizing your TikTok Ads ROI (Return On Investment) and achieving your campaign goals with the lowest CAC (Customer Acquisition Costs) requires a winning strategy.

The Customer Acquisition Costs for your TikTok Ads vary based on your target audience, product, ad quality, and advertising strategy.

Here is a step-by-step guide on how to run successful TikTok ads while keeping your Customer Acquisition Costs (CAC) as low as possible for increased profits.

Step 1: Create a Free TikTok Ads Manager Account

Creating and managing ads on TikTok requires opening a free TikTok Ads Manager account. Visit the TikTok for Business page and click “Get Started” to sign up for a TikTok Ads Manager account if you don’t already have one.

After signing up, provide key business information to create an advertiser account and your billing and payment information. Your Ad account will be automatically submitted for approval within 24 hours.

Step 2: Create a TikTok Advertising Campaign

Setting up an Ad campaign in the TikTok in TikTok Ads Manager is easy. You first see the dashboard when logging into your TikTok Ads Manager account.

TikTok requires you to pick a campaign objective from three options at the start of your ad-making process.

• Choose Awareness if your objective is to boost your brand’s or product’s recognition.
• Choose Consideration if your objective is to boost your target audience’s engagement with your brand or product.
• Choose Conversion if your objective is to drive sales.

Name your campaign and toggle on/off campaign budget optimization. If you are on a small budget, toggle off campaign budget optimization and optimize your budget at the ad group level for better control and ad performance.

At the campaign level, TikTok allows you to set the specific amount you will spend running your ads. You can select no limit to fix daily budgets on your ad groups or select a lifetime budget to reach as many people within the fastest time possible.

Step 3: Create Your Ad Group(s)

Advertisers can set specific ad placements, creative types, target audiences, campaign budgets, schedules, optimization goals, and bids at the Ad group level.

Your ad group can have one or multiple ads, as many as 999 Ad groups per campaign! TikTok requires you to name your ad group.

• Select the Ad Placement: TikTok lets you choose where to post your ads. There are two types of ad placements: automatic placement gives TikTok the authority to place your ads where it wants across its TikTok and partner platforms, and select placement allows you to choose where your ads appear.
• Choose Your Creative Type: Use TikTok Smart Creative to enhance your Ad performance and effectiveness. TikTok Smart Creative automatically creates variations of your content that help you cut creative production costs and boost ROI with high-performing creative combinations.
• Set Your Target Audience: TikTok Ads Manager allows users to choose their ideal audience by selecting demographics like gender, age group, location, interests, behaviors, and device used. You can include or exclude a custom audience, such as people who interacted with your content.
• Set Your Ad Group Budget and Schedule: The minimum Ad spend for the Ad group level is $20. You can set a daily or lifetime budget to help you manage your Ad costs. You can use TikTok scheduling options to set the start and end time for your Ads and even pick the dates when you want your Ads to run.

Step 4: Choose Your Bidding Option

TikTok Ads Manager offers four bidding methods: Cost per Mille/Thousand Impressions (CPM), ​Optimized Cost per Mille/Thousand Impressions (oCPM), Cost per View (CPV), and ​Cost per Click (CPC).

However, the bidding option that is available to you depends on your optimization goal.

• Reach optimization goal attracts CPM (Cost Per Mile) billing.
• Shop Purchases, Product Sales, Conversions, App Installation, Lead Generation, and Community Interaction (Followers) attract ​Optimized Cost per Mile/Thousand Impressions (oCPM) billing.
• Shop Purchases, Product Sales, Traffic, App Installs, Conversion, and Community Interaction (Profile Visits) attract CPC (Cost Per Click) billing.
• Video Views optimization goal attracts Cost per View (CPV) billing.

Under the Bid strategy, leave the Bid section blank to instruct TikTok to find the lowest-cost conversions while spending through your total daily budget.

TikTok offers you two different ad delivery strategies: standard and accelerated. Standard spends your ad budget as evenly as possible within your ad delivery period.

On the other hand, Accelerated spends your ad budget to get as many results as quickly as possible in the shortest time.

Step 5: Create a TikTok-Friendly Ad

Creating a TikTok-friendly and high-quality Ad is essential to engaging your target audience, hitting your campaign objectives, and lowering customer acquisition costs (CAC). Follow TikTok’s recommended ad specs to attract the best results.

TikTok recommends using the full 9:16 portrait mode aspect ratio for your Ad. While the 1:1 and 16:9 aspect ratios are recommended, TikTok observes that Ads that use the full 9:16 space get more impressions than Ads that don’t.

Your video resolution must be ≥ 540 x 960 px, 960 x 540 px, or 640 x 640 px. While you can use a video of up to 60 seconds, you want to keep your ads short and sweet. Shorter videos perform better on TikTok.

TikTok recommends capturing your audience’s attention in the first 3 seconds. The best TikTok ads use audios that align with the brand image and message they want to pass to their target audience.

Step 6: Pick a TikTok Ad Format (InFeed or Sparks)

TikTok has two main ad formats (InFeed and Sparks). InFeed ad is the standard TikTok Ad format that appears within a user’s For You feed between organic posts.

Sparks Ad allows brands and advertisers to use organic TikTok posts as ads. This native ad format lets you leverage authentic content from your TikTok account or an influencer/creator.

Unlike InFeed ads, the views, comments, shares, likes, and follows you generate from running the video Ad add up to the organic TikTok post’s tally. Spark Ads appear more organic and natural than InFeed ads.

Trust and credibility are key drivers of conversions on TikTok. With Spark Ads, you can leverage everyday creators to promote your Ad non-promotionally.

Step 7: Track and Optimize Your Ad Campaigns (Run A/B Split Testing)

Launching your Ad is not the end of your customer acquisition journey. You need to track your Ad campaign’s performance to know what is working and where to make adjustments.

TikTok provides users with native analytics that tracks essential metrics like impressions, clicks, and conversions. If you want to boost your ROI and lower your CAC, test different Ads and placements to find the one that produces better results.

A/B testing is a powerful technique that optimizes your Ad campaigns. TikTok Ads Manager offers built-in split testing, allowing users to compare two different Ad versions.

Testing multiple elements of your Ad at once can be counter-productive, especially when your goal is optimization. You may struggle to pinpoint the element that caused a performance improvement. Pick one element of your Ad to test, give it time, and analyze the results.

Step 8: Focus on Retargeting Strategies

Lowering your customer acquisition costs and optimizing your TikTok ad results requires focusing on retargeting and retention strategies.

Instead of searching from a wide audience bracket, TikTok Ads Manager allows you to build and target custom audiences for better conversions. You can create custom audiences on TikTok based on their previous interactions with your content or website.

Do you have an audience that viewed your Ad but hasn’t clicked on your Call-to-Action (CTA)? Has a potential customer viewed your product page but has’t purchased or purchased your product but hasn’t reordered?

Retargeting different custom audience categories will help you get the best out of your marketing dollar and improve your TikTok ROI.

Why and When to Choose TikTok Ads Over Other Marketing Channels

With many marketing channel options available, knowing why and when to choose TikTok Ads is essential for maximizing ROI. When considering which channel to use, check the platform’s ad targeting capabilities, reach, user demographic, cost-effectiveness, and engagement rates.

Why TikTokAds Over Other Marketing Channels

• High Engagement Rates: TikTok, the short video platform, boosts high engagement rates compared to other social media platforms. With users spending an average of 53.8 minutes on TikTok daily, you can access a more captive audience than other marketing channels.
• Virality Potential: TikTok Ads, when done right (using engaging and TikTok-friendly content and relevant targeting), can quickly gain traction and reach a more extensive base.
• Cost-Effectiveness: Compared to other platforms, TikTok offers budget-friendly CPM and CPC rates to reach a unique audience cheaply.
• Low Competition: TikTok Ads record lower competition than other established marketing channels. The combination of low ad competition and engaged users makes customer acquisition affordable for small businesses and brands.

When to Choose TikTokAds Over Other Marketing Channels

• Targeting a Younger Demographic: TikTok is seeing an influx of a more diverse demographic than when it first launched. This social media platform is great for targeting young demographics within a specific age group. The most popular demographics on TikTok are Gen Zers and Millennials.
• Advertising Direct-to-Consumer (DTC) eCommerce Goods: TikTok works best for marketing and selling visual consumer goods with an Average Order Value (AOV) under $150 and a short sales cycle.

Was This Article Helpful?