Beyond account nurturing and leveraging organic traffic booms, cross-border businesses seeking rapid commercialization through TikTok increasingly see advertising as an indispensable option. Earlier 2022, TikTok announced that it would recruit multiple agency partners and expand its commercial ports globally, signaling a positive development in the industry. Today, we will delve into TikTok's bidding methods and strategies for promotional campaigns.
01
TikTok for Business advertising bidding methods
Currently, the TikTok for Business advertising management platform offers four bidding methods, each determining how ad costs are calculated and settled. At the ad group level, the choice of bidding methods depends on the campaign strategy and goals for advertising on TikTok.
Cost Per Mille (CPM) represents the price advertisers are willing to pay for every 1,000 ad impressions. The TikTok ad system will display your ads within your budget, maximizing exposure and reaching as many potential customers as possible. CPM = (total cost of advertising / number of impressions) × 1,000. This method is charged based on impressions and is suitable for campaigns aiming at maximizing “audience coverage”.
Optimized Cost Per Mille (oCPM) indicates the price advertisers are willing to pay for every 1,000 impressions targeted at users likely to complete conversion events, become leads, or install apps. The calculation and billing of oCPM are similar to CPM. Compared to CPM, oCPM involves the TikTok ad system showing ads to users most likely to convert after analyzing estimated click-through and conversion rates. oCPM is ideal for TikTok promotions with focus on conversions, app installs, and lead generation. It should be noted that oCPM is currently the default bidding method for conversion and app install objectives.
Cost-per-thousand views (CPV) refers to the amount advertisers are willing to pay for every 1,000 views of a 6-second or 2-second video. The TikTok ad system will deliver your video to maximize the number of views within your budget. CPV = (total cost of advertising / number of impressions) × 1,000. CPV is appropriate for campaigns targeting “video view volume”. When setting a CPV bid in your ad group, you multiply your desired cost per view by 1,000 and input the total price as your bid amount. For example, if you are willing to spend $0.05 per video view, input $50 as your CPV bid.
Cost Per Click (CPC) is the fee advertisers are willing to pay for each click. The TikTok ad system aims to serve ads to users most likely to click them at a cost close to your bid. CPC = total cost of advertising / number of clicks.
Choosing CPC as your bidding method incurs charges based on clicks. It is suitable for campaigns focused on driving visits, app installs, or conversions.
02
TikTok for Business advertising bidding strategies
Advertisers need to select a bidding strategy under the “Bidding & Optimization” module within their ad groups. The bidding strategy will determine how the system manages the cost per action, spends the budget, and deploys ads.
Currently, the TikTok ad management platform supports three bidding strategies: Bid Cap, Cost Cap, and Lowest Cost.
Bid Cap
Adopting the Bid Cap requires advertisers to input their maximum acceptable cost per action. The system then optimizes ad delivery accordingly, ensuring that the average cost per action stays below the set bid threshold.
Available promotion objectives: visits, reach, video views, app installs, and conversions
- When optimized for clicks of ad groups, Bid Cap applies only to app install objectives.
- When optimized for clicks, Bid Cap applies only to conversion objectives.
Available billing methods: CPC, CPM, and CPV
Cost Cap
With Cost Cap bidding strategy, the system attempts to maintain the average cost per action close to the advertiser's specified limit, allowing costs to fluctuate around the bidding amount.
Available promotion objectives: app installs, conversions, and lead generation ads
- When optimized for conversions, Cost Cap applies only to conversion promotion objectives.
Available billing methods: OCPM
Lowest Cost
This strategy enables advertisers to forego entering a bid. Instead, the system allocates the budget to generate the maximum number of actions at the lowest possible cost per action, regardless of the competitive bidding environment.
Lowest Cost bidding strategy minimizes fluctuations in daily budget spending and saves time spent manually adjusting bids for optimization purposes.
Available promotion objectives: visits, reach, video views, app installs, conversions, lead generation ads, and catalog sales
Available billing methods: CPC, CPM, CPV, and OCPM
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