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TikTok Bidding Update – What Does it Mean for Marketers?

TikTok bidding - lowest cost, cost cap

Marketers and advertisers are always looking for new ways to reach their target audiences. With the recent TikTok bidding update, the platform’s appeal to brands and businesses has increased.

TikTok is a social media app that allows users to create and share short videos. It is one of the most popular apps in the world, with over 1 billion monthly active users. It’s available in over 150 countries, and its total downloads have exceeded over 2.5 billion. That’s over 30% of the entire world population that has downloaded TikTok.

So it probably comes as no surprise that advertisers have flocked to TikTok in recent years to connect with its incredibly large (and growing) user base. TikTok’s leadership team have gone to great lengths to make the platform more friendly to advertisers. In 2020, they rolled out a self-serve ad platform and introduced brand safety controls.

The TikTok bidding update that was announced in August 2022 is a major change to the way advertisements are bought and sold on the platform. So, what’s included in the TikTok bidding update? In short, TikTok is changing its user interface for brand objectives (Reach & Video Views). They’re rolling out several updates that are designed to provide advertisers with more transparency, flexibility and control. Read on to discover what these changes will be and what they mean for your brand’s marketing efforts on TikTok.

How Does TikTok Bidding Work?

When an advertiser wants to run an ad on TikTok, they submit a sealed bid to the company. This bid is based on how much they’re willing to pay for ads, which will be shown to their target audience.

Once the bid is submitted, TikTok’s algorithms will determine which ad is shown to which user. This is based on a number of factors (including the bid amount, user demographics, and user engagement with similar ads). If your ad is shown to a user who engages with it, you will be charged the amount you bid.

TikTok Bidding

Types of TikTok Bidding Methods

There are four types of bidding methods that TikTok offers for advertisers to bid on their ads:

  • CPC (cost-per-click)
  • CPM (cost-per-mille/thousand impressions)
  • oCPM (optimized cost-per-mille/thousand impressions)
  • CPA (cost-per-acquisition/action)

Depending on the objectives of the advertiser, different bidding methods may be more appropriate. For example, if an advertiser has a focus on brand awareness, they may want to use oCPM bidding, as it optimizes for ad exposure. If their focus is on generating leads or sales, CPA bidding could be a better option.

Advertising on TikTok is auction-based, which means the amount you pay for your ad is based on the competition. If lots of other advertisers are bidding on the same target audience, the cost of the ad will be higher. However, if there are fewer advertisers targeting the same audience, the cost of the ad will be lower.

Marketers and advertisers always want to know how much their competitors are spending on ads, so that they can adjust their own budgets accordingly. However, TikTok does not currently share this information with advertisers. This means advertisers must rely on their own data and research to determine their spend on TikTok ads.

What’s in the TikTok Bidding Update?

TikTok has been listening to advertisers. Marketing professionals have been crying out for more transparency and control over their ad spend, and TikTok has delivered. To do this, they’re making changes to both the user interface and the bidding process. Here are the key changes that are coming out in September 2022:

New Simplified Bidding UI. The brains at TikTok are introducing a new simplified bidding interface that combines Bid Cap and Lowest Cost Bidding. The goal of this change is to help advertisers to stay in more control of their costs and budget.

Improved Competitive Suggested Bid. The new system will provide a pre-filled, suggested bid option. It will help to reduce the burden of manual entry and keep your campaigns competitive during the auction.

New Reach Estimator. This new feature will allow advertisers to estimate their daily campaign reach. This estimate will be based on your ad group settings and the bid amount.

Reach For The Moon - Neon Lights

What Does it Mean for Marketers?

The new TikTok ad bidding system is a major win for marketers. The changes will provide more transparency and control over campaigns, making it easier to stay within budget and hit desired objectives.

“The new reach estimator will also be particularly useful for planning purposes. It will give advertisers a better idea of how their campaigns are likely to perform. Reach is often one of the key performance indicators for social media campaigns, so this new tool will be a valuable addition.”

By combining Bid Cap and Lowest Cost Bidding into one simplified interface, TikTok is making it easier for advertisers to manage their budgets. This change will help to keep campaigns more cost-effective and reduce the likelihood of overspending. Suggested bids will also help to keep campaigns competitive, giving advertisers a better chance of achieving their desired results. It’s a win-win all around.

The new reach estimator will also be particularly useful for planning purposes. It will give advertisers a better idea of how their campaigns are likely to perform. Reach is often one of the key performance indicators for social media campaigns, so this new tool will be a valuable addition.

Calculator On US Dollars

If you already run ads on TikTok, these updates could be a game-changer. Keep an eye out for the rollout over the next few weeks and make sure to update your campaigns accordingly. Overall, these changes should make advertising on TikTok a more seamless and effective experience for marketers.

And if you’re not already advertising on TikTok, start considering it as part of your marketing mix. With over one billion active monthly users, it’s a platform that you can’t afford to ignore. TikTok is only going to continue to grow in popularity and there’s no better time to buy in.

Partner With TikTok Bidding Experts

If you need help kicking things off, our team at House of Marketers can assist you. We’re experts in all things TikTok, and are on hand to help you create high-performing ad campaigns that drive results. Simply get in touch and we’ll arrange a consultation.

In the meantime, happy bidding to all those TikTok marketers out there!


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