Published On: 02 Nov 2023
Tiktok, with its immersive full-screen and diverse video content, has struck a chord with creators, viewers, brands, and advertisers alike.
What's more, it has become one of the most effective promotional platforms, with 1081 million monthly active users. For marketers, it makes perfect sense to capitalize on TikTok ad campaigns to boost their reach across this user base.
Like any promotional campaign, TikTok advertising also needs an effective tool to measure the overall performance. But the problem is that measuring the success of advertising campaigns on TikTok is not as straightforward as other social media platforms and digital channels. The metrics (conversion rate, click-through rate, and cost per action) do not give a clear picture of the impact of the campaign.
TikTok creates more of a passive impact in driving sales and measuring the impact of TikTok ads on overall ROI is complicated.
Thats why an increasing number of brands are leaning towards marketing mix modeling (MMM) to measure the performance of their TikTok ads.
MMM focuses on a holistic approach and analyzes non-marketing data like recession, political trends, and consumer behavior to identify TikTok ads role in your brand's overall growth.
If you're a marketer who's looking to understand how to track TikTok advertising performance with media mix modeling, we have written this article for you.
While TikTok's ad revenue is projected to jump to $33 billion by 2025, measuring TikTok's ad performance is challenging. Especially for brands in the ecommerce and DTC sectors, the traditional metrics are unable to paint a clear picture.
While number of clicks” is one of the famous metrics to measure ad campaign performances on platforms like Facebook and Instagram, the situation is slightly different for TikTok. Click is a suitable ad KPI in scenarios where the customers are looking for a product and click on a website intending to make a purchase, like say on a marketplace like Amazon.
However, the purchase journey on TikTok is not linear. So it builds the customers' interest while they are entertained with a bite-sized dance video. That means users don't always jump to purchase a product immediately after watching a video or viewing a TikTok ad. It might create a demand in their minds, and they might decide later.
TikTok plays a role in driving online shopping, but there is no exact way to measure its impact on a customer's journey.
Other platforms like Instagram encourage users to click on a post or visit the linked website, but TikTok is based on endless scrolls. Users transition from one video to another, but pinning down a single point of engagement is nearly impossible. That's why traditional advertising metrics like click-through rates (CTR) become less relevant for TikTok.
Another challenge for advertisers is that even if the user likes the video, they may not pause or engage directly, but rather continue their scrolling journey. For these reasons, measuring the depth of engagement or interest based on standard metrics becomes challenging.
This means the last-click attribution that heavily relies on the final interaction does not work here as it neglects the collective influence of multiple engagements on the customer journey.
Marketingdive highlights that TikTok ads were undervalued in 73% of scenarios when it comes to driving purchases. Due to the unconventional TikTok algorithms and the fact that it doesn't fall under the “click-and-buy bucket, regular multi-touch attribution (MTA) tools are not always effective in measuring TikTok advertisement performances.
Marketers must rely solely on TikTok's first-party attribution solution that provides insights on content views, customers actions (like if they added a product to a cart after watching content), checkout initiation, and completion.
So platforms like Google and other social media channels give instant gratification in the form of a click or app download. They provide tangible data that enables the brand to link the ad to a direct result like a sale or a new subscriber.
But TikTok isn't built for direct actions. In other words, some TikTok ads could prompt a click or swipe, but the platform's user behavior does not align with the traditional metrics. Brands cannot solely rely on the age-old metrics to determine the success of their advertising campaigns on TikTok.
The effect of TikTok ads on your overall ROI is also related to your business goals and industry of operation.
For example, the goal of a game application will be to boost their downloads. In that case, when a TikTok ad appears in the feeds of their potential users, the scope of conversion is higher because they need to perform only one action (click on the download CTA), and there are no financial transactions involved.
However, for a DTC store, “conversion” means when a potential customer makes a purchase by getting influenced by an ad. The conversion scope is less here as users often tend to perform in-depth research before buying something. Here, the TikTok ad might be the first trigger but owing to the non-linearity of the purchase journey it cannot be directly linked to the action (app download, sale, or subscribe).
Other activities are likely to be involved, like going through the product reviews, checking out competitor products and even waiting for a sale, before they finally decide to buy it.
Estimating the performance of TikTok ad campaigns and stating their impact on overall sales is challenging.
Looking at the shortcomings of the existing TikTok advertising metrics ( like clicks), you must be thinking, is there a better way to measure the impact of your TikTok ads?
This could be in the form of 2-second or 6-second video views.
When the viewer is scrolling through the feed, even a 2-second pause is a good indicator of the spark of interest. You'll be in a better position to understand and optimize these brief moments of connection for better results.
A major challenge for brands advertising on any channel is sustained engagement. A 2-second view indicates the user's interest whereas a 6-second view signifies engagement. Your brand can use this duration for a deeper connection, possibly giving a better idea of the product, message, or even a promotional offer.
Marketing mix modeling (MMM) incorporates statistical methods like time series analysis to measure the impact of advertising campaigns on an organization's overall sales.
MMM is reliable for TikTok ad performance measurement because it emphasizes both regular ad metrics like clicks and content views as well as political and economic factors like seasonality and inflation to give a comprehensive understanding of what truly drives consumer behavior.
MMM media mix modeling is a multifunctional approach. Each function helps decode the different aspects of your brand's marketing strategy to give a well-rounded view of the performance. The functions include: base drivers, budget optimization, and spend efficiency analysis.
By now, it is clear that last-click attribution is ineffective for TikTok. Mix models, on the other hand, identify the underlying value of every customer interaction by evenly distributing attribution across multiple touchpoints. With appropriate media marketing mix models, you can quickly grasp TikTok's changing user engagements.
Think of MMM principle as a holistic, dynamic, and data-rich approach for brands to get critical insights into performance marketing. Let's look at the MMM from the lens of TikTok advertising.
The objectives of TikTok ads can range from:
TikToks bidding strategy allows brands to promote ads based on their budget and core objectives. Marketing mix modeling aligns with each of the three bidding strategies including bid cap, cost cap, and lowest cost to show the impact of each of the strategies on the campaign's overall performance. This way, your brand can refine the approach based on insights driven by the marketing models and ensure that the campaign is aligned with your brand's core objectives.
Multi-linear path that evaluates every marketing channel drives the consumer's journey.
Operates on a linear path and bypasses the multifaceted journey the modern user takes.
A greater understanding of how different marketing channels complement each other to make insights-driven marketing strategies.
Undervalues the influence of interactions such as review, video ads, or recommendations that shape the consumer's purchase decision.
It provides a granular breakdown of the influence of each channel even if it has silently shaped the early or mid stages of the consumer journey.
Prefer optimizing the budget for the final touchpoint channel even if it has a minimal influence on the consumer journey.
Allows marketing teams to identify channels that have been instrumental in building brand awareness.
Neglect channels that play a less direct but important role in shaping consumer decisions.
What's more, contrary to the marketing modeling mix myths, MMM pinpoints channels with diminishing returns so that you can redirect funds to other channels with untapped potential.
Check out this case study to see how a well-known FMCG company used Marketing Mix Modeling to make better campaign investments and learn more about how each of their marketing platforms contributed in different ways.
With automated MMM tools like Lifesight, measuring TikTok advertising performance is rather easier, as compared to the confusing last-click attribution.
Here's how brands can leverage the MMM media mix modeling solution Lifesight:
Request a demo to explore Lifesight.
What is a good CTR for TikTok ads?
Any click-through rate of over 1% is considered a good CTR for TikTok ads.
What is media mix modeling?
Mix modeling is a statistical technique for measuring the performance of various advertising campaigns and their impacts on overall sales.
How much do TikTok ads cost?
TikTok ads cost $10 for generating every 10,000 views.
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