It’s not just for trending dance videos anymore - TikTok is a certified moneymaker for DTC businesses. Besides being the biggest shopping event of the year on the regular, this year marks the first where TikTok Shop was available to brands in the US.
TikTok sweetened the deal by subsidizing discounts for brands with discounts as high as 50%; combined with an engaging and interactive community with well-trained for you page (FYP) algorithms, the stage was set for high conversions and success this past Black Friday and Cyber Monday.
How did it go, you ask?
Well, we’ve got the data from over 11,000 shops using Triple Whale, and how they chose to divvy up their BFCM ad spend.
While most of the shops in our report allocated the majority of their ad spend (nearly 95%) to the traditional ad platforms of Meta and Google Ads, some brands have recognized the growing impact of TikTok in ECommerce, and experienced great returns on investments in this channel. TikTok appears to be optimizing its ad engine, with extremely enticing metrics for marketers and brand owners alike.
Some key results:
As a brand owner, you may feel tentative to invest in a newer channel when the ‘ole standard (of Meta and Google Ads) have been working for you. We’re here to say: we like the potential of TikTok, and jumping on the platform while it’s hot is a great idea.
In this blog article, we’ll cover why TikTok is such a great space for reaching potential customers, the impact of TikTok Shops over BFCM 2023 and what it means for the future, and a peek into which industries had the biggest successes over BFCM on the platform.
I’ve said it before and I’ll say it again: the best place to market a product is where your customers already spend time. And, for many brands, that place is TikTok. The platform surpassed 1 billion monthly active users in 2021, and the monthly TikTok users in the US is now over 150 million (...which is nearly half the population).
Not only are there a lot of users on the app, they’re also spending a lot of time on the app itself, with Americans 18 and over estimated to spend 55.8 minutes per day on TikTok (guilty…). I’ve been known to mindlessly scroll the for you page (FYP) more than a few times a day, and have definitely researched products I discovered on the app itself. By combining the entertainment factor of TikTok’s short videos with authentic and relatable content from brands, it just might spark the inspiration that drives customers to act.
According to TikTok’s research:
TikTok is a platform that operates on communication and engagement, and brands can develop a lasting relationship with users that are talking about their products.
Case in point: a TikTok user named Danielle shared how her car was fully engulfed in flames, and yet her Stanley cup was relatively unscathed and still full of ice. It created the perfect viral moment for Stanley, in that it displayed how well-insulated the Stanley cups really are. That video has over 90 million views and nearly 9 million likes.
Less than a day later, Stanley stitched her video to say they’d like to replace her car, and their video reached over 40 million people. This relatively small gesture from a big brand created a ton of goodwill for Stanley, with plenty of customers ready to make a purchase based on principle.
Also, if a TikTok user is a fan of ice cold drinks, they can be sure they’re leaving lukewarm drinks behind by purchasing a Stanley cup that can stand up to literal flames.
Brands and creators are able to sell directly from the FYP, through a suite of in-app shopping touchpoints. An integrated checkout directly within TikTok means that both discovery and purchase can happen in one place, which reduces friction in the buyer’s journey. By making a purchase without leaving the platform, a user can continue to enjoy their typical experience (scrolling, scrolling, scrolling) afterwards, and everyone’s happy.
The ethos of TikTok is storytelling, and TikTok knows people are visiting their platform to find new ideas, products, and trends.
TikTok has created the Branded Mission solution that helps advertisers to crowdsource authentic content from other TikTok creators. Advertisers are then able to engage the community themselves to participate in branded campaigns. Authentic content is the best way to reach the ideal customer!
Take #girlmath, for example, which is a set of rules which are employed to justify impulse spending. It began with a segment on a New Zealand radio station FVHZM, where Fletch, Vaughan, and Hayley spoke with a variety of women who justified expensive purchases based on things like the number of times pieces of clothing were worn, or the amount of time between the purchase and the actual event.
So, basically, the Taylor Swift concert ticket I purchased a few months ago will be well paid off before November 2024, so it’s like I didn’t even pay for it by the time it rolls around. It’s free, and that means I can spend more on concert merch next Fall.
Don’t understand this math? You might be a dude.
Companies can take these creative and fun cultural moments to bring attention to their products and services. Ulta beauty made a TikTok video advertising how a customer using their Ultamate rewards points can get $300 worth of products for free. It’s a simple, relevant addition to the conversation while also highlighting an awesome benefit of shopping at Ulta.
Overall, TikTok is a unique and intriguing way to reach and engage with customers. Many brands have experienced success by leaning into the casual and laid back nature of the platform with tailored content that drives engagement.
The addition of TikTok Shops for the 2023 Black Friday Cyber Monday shopping weekend was a huge factor in the number of conversions attributed to TikTok this year versus 2022. For the over 11,000 included shops, an increase in ad spend of 17.25% over last year resulted in a 58% return on investment (ROAS), and 89.66% higher conversion value.
Even though Meta and Google Ads continued to be the main platforms and combined for nearly 95% of total ad spend, some cohorts in our report were more likely to invest in TikTok over others as they began to recognize the growing importance of TikTok in ECommerce. For example, brands with over $10M in annual revenue appear to be allocating larger portions of their advertising budget toward TikTok. It may have initially been viewed as more of a top-of-funnel platform for brands, but with the introduction of TikTok Shops, there’s potential to sell directly to customers, now.
As such, the click-through rate (CTR) for TikTok increased by 17.46%, which was the second-highest growth in CTR out of Meta, Google Ads, Pinterest, and Snap. As CTR increased for TikTok, so did conversion rate (CR), with a staggering increase of 56.41% over BFCM 2022. While this can likely be attributed to the introduction of TikTok Shops in the USA, there is still opportunity for growth as more brands hop on the TikTok train.
Another interesting thing we found was that cost per acquisition (CPA) actually dropped on TikTok year over year, from $24.13 in 2022 to $13.08 in 2023, making it the only platform that was cheaper to acquire customers than previously. While CPA decreased, so did average order value (AOV), so an effective lifecycle campaign will be imperative for keeping TikTok returns high.
While the percentage of total purchases by channel during BFCM 2023 was dominated by Meta (at 59.44%), TikTok came in at 7.12% - a huge increase of 135.69% over 2022. It looks like there might be a shift starting towards platforms like TikTok, and the success of our cohort indicates it could be a sign of things to come.
Plenty of products have gone viral on TikTok and generated a “TikTok Made Me Buy It” moment. But some products are better suited to advertise on the platform than others!
As part of our BFCM 2023 research, our team investigated which industries spent the most on TikTok, and they were: Health & Beauty, Clothing, Jewelry & Watches, Fashion & Accessories, and Food & Beverages. These 5 verticals accounted for 80% of total ad spend on TikTok.
Health & Beauty on TikTok features plenty of beauty influencers giving their honest opinions of products while using them. Nikki de Jager, a Dutch beauty influencer, posts about trending products and gets exceptional views on her videos, which can influence her 8.3 million TikTok followers to make a purchase.
Advertisers can expect even more success by combining the audience of a trusted influencer with a paid promotion, and plenty of brands have explored that money-making combination.
An even bigger winner on TikTok, however, was the Clothing vertical. Even though only 24% of the total ad spend during BFCM 2023 was earmarked for Clothing, over 50% of the total purchases and conversion value were tied up in this industry.
The average order value for TikTok was $43, and much lower than both Meta ($95) and Google Ads ($92) for BFCM 2023. This tells us that TikTok is great for lower ticket items or things that a Gen Z kid can purchase on the fly.
A recent study found that over 76% of TikTok users in the USA were 18 to 24 years old. By advertising products individuals in this age range need, like, and can afford, brands can really capitalize on these lower AOV conversions and the impulsive nature of the platform.
In conclusion, TikTok has proven itself as more than just entertaining; it's a potent, emerging contender in the ecommerce world. The 2023 Black Friday Cyber Monday statistics highlight significant growth and return on ad spend on TikTok, particularly in sectors such as Health & Beauty and Clothing. Brands, especially those targeting Gen Z, can leverage this platform not only for top-of-funnel awareness but also for direct sales, all while maintaining a lower cost per acquisition. Even though Meta and Google Ads still dominate the majority of ad spend, the surge in TikTok's performance suggests a shift towards more diverse advertising platforms. As the digital marketing landscape continues to evolve, adapting to these trends and exploring new avenues like TikTok becomes vital for brands seeking to stay ahead of the curve.
Ready to dive in to advertising on TikTok? Check out our blog on how to run ads on TikTok. Eager to see how your BFCM 2023 performance stacks up against our 11,000 Triple Whale customers? Download the full report here!
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