Whether you’re launching new branding or looking to increase store sales, it is important to choose the right buying type for your brand campaign on TikTok. Wondering about the difference between TikTok reservations and auction ads? How to choose the right buying type for your brand campaign on TikTok? Which one is best for your brand? Let’s reveal all about it in this article!
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TikTok Auction Ads vs Reservation Ads: Key Differences
TikTok auction ads
TikTok Auction ads or TikTok ads bidding means telling TikTok how much you’re willing to pay for your ad to be shown to users and from then, TikTok will find people who meet your criteria. This decision can be difficult because it affects both the cost and frequency of your ad display. The cost of your ad campaign depends on factors such as click-through rates, conversions, and impressions. If you offer a higher bid than your competitors, your ad has a better chance of being seen by your desired audience. Therefore, it is crucial to select a bidding option that suits your budget and advertising goals.
Bidding methods
The estimated costs for advertising bidding are determined by four different bidding methods, which are:
- Cost Per Mille/ Thousand Impressions (CPM): Cost per 1000 impressions
- Optimized Cost Per Mille/Thousand Impressions (oCPM): Optimized cost per 1000 impressions
- Cost Per View (CPV): Cost per 1000 views
- Cost Per Click (CPC)
Unique features of TikTok Auction ads:
- Simple to create on TikTok Ads Manager.
- Flexible costs, no need to pay upfront fees
- No need to purchase ad space.
- Ideal for conversion efficiency
TikTok Reservation ads
TikTok Reservation ads are the type of ad that needs to book ad placement on TikTok. To do that, you have to work with TikTok partners. Brands will purchase the advertising space through a TikTok agency. TikTok R
Reservation ads show up when users open the TikTok app and are often used for increasing brand awareness. This ad type suits big brands with large advertising budgets more than other small businesses.
The ads show up when you open the app, they are unskippable, usually funny or fascinating videos that will make the person watching click it and learn more about it. They are upper funnel and are mainly used for brand awareness, as they guarantee a vast amount of impressions up to a couple of million.
Unique features of TikTok Reservation ads:
- More expensive than Auction ads
- Must work with TikTok partners
- Suitable for increasing awareness and branding.
- Unique advertising solutions that are only available on TikTok.
Key Differences
There are 3 main points that will help you choose between these ad types:
1. Application
TikTok Auction ads: available for In-Feed ads, TikTok Shopping ads, and Deeplink ads.
TikTok Reservation ads: available for TopView ads, Branded Hashtag Challenge ads, and Branded Effect ads.
2. Optimization
TikTok Auction ads: With a TikTok Ads Manager account, you can bid on an ad and set the budget you’re willing to pay for your Auction ad. Besides, one of the biggest differences between the two ad types is that Auction ads can be optimized for conversions. The more you invest in your ad campaign, the more actions like reach, traffic, and views you can get. And you also can keep your cost under control.
TikTok Reservation ads: You are not able to adopt a Reservation ad on your own but rather buy ad placements from TikTok partners.
In this way, Auction ads are more flexible and the ad cost will stay within your budget. You will have more control over your own budget for both campaigns and also ad groups level.
3. Price
TikTok Auction ads:
The expense for advertising varies depending on the type of advertisement. For example, if you choose to advertise on TikTok Ads Manager, the minimum cost for In-Feed advertising per day is $20.
- Cost per Mille/Thousand Impressions (CPM): The minimum cost for every 1,000 impressions (CPM) is $10. CPM refers to the cost you agree to pay for every thousand impressions of your ad. TikTok will use this amount to deliver your ad to as many viewers as possible, aiming for maximum reach while staying within your budget.
- Optimized Cost Per Mille/Thousand Impressions (oCPM): oCPM (Optimized Cost per Mille) bid is the amount you are ready to pay to get 1,000 impressions, much like CPM. But in this case, the system will focus on users who are more likely to convert, become leads, or have shown interest in similar products. Currently, oCPM is the primary bidding method for ad objectives such as “Conversions” or “App Installs.”
- Cost per click (CPC): The average cost per click on TikTok is about $1. CPC is the amount you agree to pay for each click on your ad. TikTok’s system will present your ad to users who are most likely to click on the link while trying to keep the cost as close as possible to your bid.
- Cost per Thousand Views (CPV): If a YouTube ad spends $10,000 – $30,000 to reach 100,000 viewers, TikTok offers an alternative option where you can set a maximum bid for Cost Per View (CPV) for 1,000 views of a 6-second or 2-second video. You can select how much you are willing to pay per view on TikTok. CPV is the amount you agree to pay for every 1,000 video views that are at least 2 or 6 seconds long, depending on the ad format. TikTok’s system will present your video to as many viewers as possible while remaining within your budget.
TikTok Reservation ads:
- TopView is a type of video advertisement that appears immediately when the user opens the TikTok application. It is the most sophisticated advertising format on TikTok, providing full-day exposure and the potential to attract millions of views, resulting in high engagement and brand recognition. Advertisers must spend $65,000 each day for 7.4 million Top View Ad impressions.
- Branded Effect is a type of advertising that employs stickers, filters, and motion effects to promote products, campaigns, and brand names. Users can utilize these branded effects to create their own content on TikTok’s video recorder. To advertise using Branded Effect, the cost is approximately $45,000 for a 30-day period. This allows brands to include their effects in the filter list of TikTok’s video recorder and promote their products or campaigns through user-generated content.
- Branded Hashtag Challenge is a type of advertisement where a brand creates a unique hashtag and invites users to attach it to videos related to a particular topic. This allows advertisers to create customized dance or comedy challenges with a hashtag that prompts users to generate their versions over a six-day period. Although it is one of TikTok’s more expensive advertising formats, sponsors receive numerous benefits, including official music to accompany the hashtag and content protection to prevent videos from being restricted. To book a Branded Hashtag Challenge, the cost is typically between $130,000 to $160,000.
How to set up Auction and Reservation ads?
Wonder how to set up your own campaign with TikTok Auction ads and Reservation ads? For Reservation ads, unfortunately, you cannot set up an ad campaign from TikTok Ads Manager. As we mentioned above, you have to work with a TikTok partner to book placement and make your ad viral.
However, with Auction ads, you can create your own campaign right in the TikTok Ads Manager dashboard. Let’s uncover how to create an Auction ad in these simple steps.
Step 1: Create a new campaign
In the first step, you need to log in to your TikTok Ads Manager, find the Campaign tab, and Create a new campaign.
Step 2: Set up the campaign objective
Next step, let’s choose the objective for your ad campaign, whether it is awareness, consideration, or conversion. Then set up your campaign name and budget.
Step 3: Complete the ad groups’ general settings
Name your TikTok ad group, choose placements, and turn on or off automated creative optimization.
Step 4: Choose your target audience
Select your target audience by giving information about their demographics, interests, and behaviors
Step 5: Complete the budget & schedule settings
In this step, you need to set up a budget and schedule the time for your ad.
Step 6: Select your bid strategy and optimization.
Finally, choose your bid strategy and optimization and submit your ad campaign.
It’s all about creating your TikTok Auction ads campaign! However, to maximize ad performance and results, you may need some best practices, especially if you are a beginner on this highly competitive platform.
How to effectively do TikTok ads Auction?
Winning TikTok with Auction ads is easy if you know the bidding methods and strategies; nonetheless, there’s more to take advantage of from this ad type. When you’re bidding, remember to:
Enter the highest amount that you are ready to pay for conversions
By giving the system the maximum cost you’re willing to spend, you offer TikTok more chances of finding the right audience for your ads. You can increase your competitiveness in the Auction by raising your bid. If you bid higher than other businesses in the same industry, TikTok will show your ads in front of more viewers.
Use historical benchmarks to set your bids
In this way, you can choose suitable cost per acquisition (CPA) or return on ad spend (ROAS) bids in the system. If you don’t have data for these benchmarks, try running ad groups using the Lowest Cost or Highest Value bid strategies for a few days, and after that, you can use the real CPA and ROAS as references for your future bids.
Not immediately change your CPA/ROAS bid when it does not reach your targets
Budget consumption may immediately decline if your CPA bid is decreased or your ROAS bid is raised. If your CPA/ROAS is falling short of your goals, have patience and give the system some time to improve. If you need to revise your bids, it’s better to make minor, infrequent changes.
Adjust your bids at 12:00 AM local time
The system will have more time to stabilize ad delivery if you update your bid early in the day. To run new bids at particular times, use the Automated Rules feature in TikTok Ads Manager. If you have to make changes later in the day, the smaller, the better.
TikTok Auction & Reservation ads: Success stories
Maybelline: Take full advantage of TikTok Auction ads
Before launching your own campaign, it’s crucial to take some precious lessons from other brands. Let’s dive into a great example from Maybelline to get inspired!
If you are into cosmetic and beauty products, you definitely heard about Maybelline. It is an American multinational cosmetics, skincare, fragrance, and personal care company that is a subsidiary of the French cosmetics company L’Oréal. For the 2020 Christmas season, the brand set up a TikTok campaign that drove customers towards their new Lash Lift Mascara product.
In partnership with a TikTok agency, Maybelline launched a One Day Max In-Feed Ad featuring famous TikTok creator @lolaloliitaaa. With sound-on and full screen, One Day Max In-Feed Ads displaying next to other user-generated content provide a 100% share of voice for your brand name and a short description or call to action.
After one day, the In-Feed ad gained more than 3.5 million impressions, 109,000 likes, and a huge amount of engagement. A click-through rate of 0.81% (28,000 clicks) was also recorded, proving that this type of ad can generate remarkable engagement even in a very short time.
Nike: Make the most out of TikTok Reservation ads
Are you wondering whether TikTok Reservation ads are worth it or not? Let’s take a look at the success story of Nike – one of the world’s most famous footwear brands.
To promote its new pair of boots, in 2020, Nike launched the #MagicBoots Branded Hashtag Challenge encouraging fans to show their football trick while wearing Nike boots. The challenge attracted massive responses thanks to the collaboration with popular TikTok creator @ben and football stars like Kevin De Bruyne.
In this Branded Hashtag Challenge, Nike also ran additional TopView Lite and In-Feed ads to maximize its reach. As a result, the brand exposure was incredible with over 317 million video views and 160,000 videos created. Over 46 million interactions and a growth of 215,000 followers in Nike’s TikTok profile were recorded. It was beyond imagination.
TikTok Auction ads vs Reservation ads: Which one is best for your E-commerce?
Reservation ads are more impactful, and they are more expensive, too. To be able to run TikTok Reservation ads you must work with a TikTok Advertising agency. If your business is small or start-up, then Auction ads are a great choice for your budget. As these affordable and accessible TikTok ad formats, TikTok Auction ads are the great starting point for your TikTok advertising campaign. Launch your first TikTok ads campaign with a suitable budget and gradually increase your ads spending as performance data becomes available.
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