What is a Good CPC for TikTok Ads & How to Lower it

For advertisers, being aware of TikTok CPC (Cost Per Click) is crucial to their success. As an essential metric within the TikTok ecosystem, understanding its significance, calculation, and benchmark is crucial for brands aiming to optimize their advertising efforts. 

In this article, we’ll provide you with valuable insights and practical tips to help you achieve lower CPC on TikTok. Get ready to unlock the potential of cost-effective advertising and take your brand’s TikTok presence to new heights. Let’s dive in!

What is TikTok CPC?

TikTok CPC, or Cost Per Click, refers to the amount advertisers pay each time a user clicks on their ad within the TikTok platform. It is a key metric used in digital advertising to measure the effectiveness and efficiency of advertising campaigns. With TikTok CPC, advertisers only pay when users actively engage with their ads by clicking on them, rather than for impressions or views alone.

How to calculate your TikTok CPC?

Calculating your TikTok CPC involves a straightforward formula based on the total amount spent on your advertising campaign and the total number of clicks generated. Here’s a step-by-step guide on how to calculate your TikTok CPC:

• Gather Campaign Data: Start by collecting relevant data from your TikTok advertising campaign. This includes the total amount spent on the campaign and the total number of clicks your ads received. You can find this information within the analytics or reporting dashboard provided by TikTok’s advertising platform.
• Determine Total Spend: Identify the total amount of money spent on your TikTok advertising campaign. This includes any fees associated with running ads on TikTok, such as bidding costs and platform fees. Make sure to use the actual amount spent, as it reflects the real investment in your campaign.
• Count Total Clicks: Next, determine the total number of clicks your ads received during the campaign period. This metric represents the actual engagement with your ads, as users click on them to view more information or take action.
• Compute CPC: To calculate your TikTok CPC, divide the total amount spent on the campaign by the total number of clicks generated. The formula is as follows: CPC = Total Spend / Total Clicks

Let’s imagine if you spend $500 in your ad campaign, and gain a total of 500 clicks on your landing page. Your CPC will be 500/500 = $1. What this means is that you have to pay $1 per click.

What does CPC mean for your businesses?

CPC is a metric with 2 purposes: Bidding cost & Performance analysis. 

Bidding cost to run ads 

If you use the following campaign objectives for your ad, TikTok will use clicks as your campaign optimization goal, and CPC will be a way for them to charge the ads you have launched. 

• Shop Purchases
• Product Sales
• Traffic
• App Installs
• Conversion 
• Community Interaction (Profile Visits) 

During the campaign setting process, you can choose to either set your daily budget or skip it; however, we would recommend small businesses fill in your budget. So, keep in mind the budget benchmark that TikTok has required: 

• Campaign Level Minimum Budget: For both daily and total budgets, the minimum requirement is $50
• Ad Group Level Minimum Budget: Daily budgets for ad groups must exceed $20. 

Unlike TikTok CPM, TikTok won’t give you a suggested CPC. Instead, they will offer you 2 options, either the lowest cost bid or cost cap. For small businesses with tight budgets, we suggest you choose the lowest cost bid so that TikTok can optimize your results with your resources. 

Assess the cost-effectiveness of the campaign 

Similar to CPM, analyzing your CPC can help you assess the cost-effectiveness of your campaigns. To be more specific, it can allow advertisers to determine whether the cost they are paying per click is reasonable in comparison to the value they are receiving from those clicks. 

As a result, you will be able to optimize budget allocation and ensure that resources are invested in the most productive avenues.

A low CPC means that advertisers are paying a relatively small amount for each click they receive on their ads. In other words, it indicates that the cost of acquiring a click or visit to their website or landing page is lower, which can be more cost-effective for their advertising budget.

On the other hand, a high CPC means that advertisers are paying a higher amount for each click on their ads. This suggests that acquiring a click or visit through their advertising campaign is more expensive. When the CPC is higher than average, advertisers should analyze whether this result comes from higher competition for the targeted audience, more valuable keyword, or other factors. 

What is the average TikTok CPC?

So what is a good CPC for TikTok ads? A “good” CPC for TikTok ads can vary depending on factors such as industry, target audience, geographic location, ad content, and campaign objectives. While different sources provide varying estimates, recent research and case studies offer insights into the range of CPC values observed by advertisers on TikTok.

According to multiple sources, the average cost per click TikTok ranges from $0.19 to $1.00. However, it’s important to note that these figures represent campaigns targeting different audiences in various geographic regions. For example, JungleTopp digital media consultancy agency reports a CPC value of $0.19, indicating relatively low costs for their clients’ ad campaigns.

A more comprehensive view of TikTok Ads CPC is provided by recent research conducted by Hootsuite, which analyzed campaigns across different industries and geographic locations. Here are some notable examples:

• Skincare brand Synth Labs Intl.: Achieved a CPC of $0.32, demonstrating cost-effective results in driving traffic to their brand through TikTok Ads.
• Online jewelry store Lion Wild: Managed to achieve a low CPC of $0.13, indicating efficient ad spend in generating clicks and engagement on their TikTok Ads campaign.
• Mallows Beauty brand: Achieved an impressively low CPC of £0.04, indicating highly cost-effective advertising on TikTok.

These examples highlight the potential for advertisers to achieve competitive CPC rates on TikTok by implementing effective targeting, engaging ad content, and strategic bidding strategies. However, advertisers need to monitor their campaigns closely, analyze performance metrics, and adjust their strategies as needed to optimize CPC and overall campaign effectiveness on the platform.

What are the benefits of optimizing TikTok CPC

Optimizing TikTok Cost Per Click offers a multitude of advantages for advertisers, providing both cost-effectiveness and enhanced reach. Here are the key benefits:

Cost-effectiveness in advertising campaigns

By optimizing good CPC TikTok ads, advertisers can ensure that they are getting the most out of their advertising budget. By refining targeting parameters and bidding strategies, advertisers can reduce unnecessary spending and allocate resources more efficiently.

Moreover, advertisers can leverage CPC optimization techniques to minimize wasted clicks and focus their budget on engaging with users who are most likely to convert. This results in a more cost-effective advertising campaign overall.

Maximizing ROI

Optimizing TikTok CPC allows advertisers to maximize their return on investment by generating more clicks and conversions for their ad spend. By achieving a lower CPC, advertisers can drive higher engagement and ultimately increase the likelihood of achieving their marketing objectives.

By continuously monitoring and adjusting CPC bids based on performance metrics, advertisers can optimize their campaigns to generate the highest possible ROI. This iterative approach ensures that advertising efforts are continually refined for maximum impact.

Reaching the right audience efficiently

TikTok offers robust targeting options that allow advertisers to reach their desired audience with precision. By optimizing CPC, advertisers can ensure that their ads are shown to users who are most likely to be interested in their products or services.

By reaching the right audience efficiently, advertisers can improve ad engagement and conversion rates. This targeted approach not only increases the effectiveness of advertising campaigns but also enhances the overall user experience by delivering relevant content to users.

How to lower your TikTok CPC

It is a known fact for all advertisers that the CPC can fluctuate rapidly due to various factors. Even though we can’t know for sure which algorithm TikTok uses to decipher our CPC, we can learn from some helpful tips to keep the metric as low as possible. 

Audience targeting gone right 

If the audience is false from the start and their needs don’t match what you target, it is unlikely they will click on your landing page. That’s why you should narrow down your target audience to reach users who are most likely to engage with your ad. TikTok’s targeting options, such as demographics, interests, and behaviors, can be utilized to refine your audience selection. You can improve your ad performance and potentially lower your CPC with a more relevant audience.

Have a good hook

The video content hook is the most important part of the ad creative. According to TikTok, their studies indicate that over 63% of all videos with the highest click-through rate (CTR) highlight their key message or product within the first 3 seconds (TikTok). 

If you manage to attract their attention with a powerful hook, chances are they will keep watching and eventually click on your links to do the desired action, hence lowering your CPC

Have a good story 

After getting their attention with a good hook, having a good story to introduce your product is also of paramount importance. A good story should help the audience understand what’s the appeal of your product, and also how it is going to solve the problems that they are having. 

To pull this off successfully, it’s crucial that you select a content pillar that aligns with your product and target audience to maintain their interest. We would recommend small businesses to try out UGC TikTok ads to create a native feel for your brand and also can create social proof that will gain audience trust to click on your website.

Additionally, you should also make use of the interactive formats that TikTok offers, such as polls, replying to comments, stitches, and duets so that the user will have a more immersive and entertaining experience while watching your ad. 

Have a convincing CTA

When creating TikTok videos, it is crucial to incorporate a clear and captivating call-to-action (CTA) that grabs viewers’ attention and motivates them to take action. If the CTA is vague or unclear, potential customers may not know what to do next and could exit your marketing funnel without engaging further or making a purchase. 

To effectively engage your TikTok audience, craft a strong CTA that explicitly communicates the desired action, such as “Shop Now,” “Get Yours Today,” or “Swipe Up for Exclusive Deals.” Viewers will be more likely to click and explore your products or services as long as you are being explicit, exciting, and providing clear instructions.

Is it worth it to run TikTok Ads?

We hope the article has given you a clearer understanding of TikTok CPC and how you can optimize this metric. However, CPC is only a small part of the equation. In reality, running effective ad campaigns requires expertise and experience, making it a daunting task for beginners. However, with the right guidance and resources, beginners can gain the necessary skills and confidence to run successful ads and achieve their marketing goals.

Lucky for you, we’ve got just the thing you need: A complete guide on how to run TikTok ads in 2024. It’s packed with valuable insights, tips, and tricks to navigate the dynamic TikTok advertising landscape with confidence and expertise. Get ready to unlock the secrets of successful TikTok advertising and propel your brand to new heights in the exciting world of TikTok ads.