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TikTok Auction vs Reservation Ads: Key differences & Best Practices

TikTok Auction Ads vs Reservation Ads

TikTok has proved to be an excellent social marketing platform that attracted a large number of advertisers, and there’s no doubt that this game-changer is benefiting a lot of businesses. With various types of ads, TikTok has offered brands a powerful creative tool including Auction ads and Reservation ads.

These two ad types are suitable for specific campaigns and brand objectives, so in this article, let’s find out the differences between the two types of ads above to tailor your brand’s ads to best fit your audience.

What are TikTok Auction ads and Reservation ads?

TikTok Auction ads or TikTok ads bidding is a strategy that enhances the effectiveness of your ad campaign by targeting the right audience and getting your desired outcome. When creating Auction ads on TikTok Ads Manager, you let TikTok know who you want to see your ads and from then, TikTok will find people who meet your criteria.

Or in another word, creating TikTok Auction ads means that you are competing to buy the advertising space for your brand. If you want more control over traffic and conversion goals, this ad type is for you.

Reservation ads, on the other hand, are the type of ad that needs to book ad placement on TikTok. To do that, you have to work with TikTok partners. The advertising space will be purchased by brands through a TikTok agency. TikTok Reservation ads show up when users open the TikTok app and are often used for increasing brand awareness. This ad type is more suitable for big brands than other small businesses.

auction ads tiktok
Source: TikTok for Business

3 significant differences between Auction and Reservation ads on TikTok

So TikTok Auction vs Reservation Ads, what are the main differences? What should you choose for your campaign? Don’t be so confused, there are 3 main points that will help you choose between these ad types:

  • Application
  • Optimization
  • Pricing and visibility

Application

Auction type is available for In-Feed ads, TikTok Shopping, Collection ads, Deeplink, and Dynamic Showcase while brands can use Reservation ads in TopView, Branded Hashtag Challenge, and TikTok Branded Effect.

topview ads tiktok
Source: TikTok Business Hub

Each ad formats will be more helpful for different marketing strategy. If you want to leverage TikTok User-generated-content, TikTok Branded hashtag challenge is better than the others. However, if you only have a small budget but still want to increase brand awareness or gain conversions, In-Feed ads will be a great choice for your business.

Optimization

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. In contrast, you’re 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 with your own budget for both campaign and also ad groups level.

Furthermore, 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.

Price and visibility

There’s no exact cost for an Auction or Reservation ad, it depends on the scale and objective of each campaign, not to mention the location.

However, the cost range for Auction ads may be smaller than for Reservation ads. As a result, Reservation ads are often used by big businesses. These ads are short videos but really impactful. The number of impressions you gain from Reservation ads will be larger than the Auction type.

topview ads tiktok 2
Source: TikTok

How to run a TikTok campaign using Auction and Reservation ads?

Wonder how to set up your own campaign with Auction ads and Reservation ads? In terms of 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 ad, 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

At the first step, you need to log in to your TikTok Ads Manager, find the Campaign tab, and Create a new campaign.

create auction ads 1
Source: TikTok Ads Manager

Step 2: Set up 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.

create auction ads 2
Source: TikTok Ads Manager

Step 3: Complete the ad groups general settings

Name your TikTok ad group, choose placements, and turn on or off automated creative optimization. 

create auction ads 3
Source: TikTok Ads Manager

Step 4: Choose your target audience

Select your target audience by giving information about their demographics, interests, and behaviors. 

create auction ads 4
Source: TikTok Ads Manager

Step 5: Complete the budget & schedule settings

In this step, you need to set up a budget and schedule the time for your ad.

create auction ads 5
Source: TikTok Ads Manager

Step 6: Select your bid strategy and optimization.

Finally, shoose your bid strategy and optimization and submit your ad campaign.

create auction ads 6
Source: TikTok Ads Manager

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 high competitive platform.

4 Amazing tips for running effective Auction ads

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 business 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.

adjust your bids
Source: TikTok Ads Manager

TikTok Auction & Reservation ads inspiration for e-commerce brands

Take full advantage of 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 Maybeliline. 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.

Make the most out of Reservation ads

Are you wondering whether 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.

@nike

Sometimes Kevin just has to assist De Bruyne #MagicBoots 🤩

♬ “WOAH!” – Cashino

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.

Ready to run a successful ad campaign

Now you know the fundamental of Auction and Reservation ads as well as the differences between the two types, you can choose what’s best for your business. With each specific campaign, you may need a particular strategy with a clear objective, enough information about you audience and also a budget.

So, if you feel confused running various types of TikTok ads, how about trying NestAds – TikTok Advertising Management software to better manage your campaign and get the most actions out of your budget? Feel free to contact us any time, we are always to support your team.

Zoe

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Zoe

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