It’s not just for trending dance videos anymore - TikTok is a certified moneymaker for DTC businesses. Many brands have jumped on the opportunity to utilize trending audio to their advantage, or tap into the collective consciousness of what’s happening around the world. Today, it’s Moo Deng. Tomorrow, who knows?
Last year was the first on record where TikTok Shop was available to brands in the United States, and 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 during BFCM 2023.
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 2023 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 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 2023 BFCM results:
As a brand owner, you may feel tentative to invest in a newer channel when the 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 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. With this info, you’ll be better prepared to master BFCM 2024 by incorporating TikTok ads into your marketing strategy!
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 United States 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 years old and over estimated to spend 53.8 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 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 lasting relationships with users who talk 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 97 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 in 2023 was paid off in 2023, 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 this 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 in 2023 versus 2022. For the over 11,000 included shops, an increase in ad spend of 17.25% over 2022 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 in 2023, some cohorts were more likely to invest in TikTok over others as they began to recognize its growing importance in ecommerce. For example, brands with over $10M in annual revenue allocated 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% in 2023 compared to 2022, 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 discovery 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 where it was cheaper to acquire customers. 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 this 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 the BFCM 2023 retrospective report, Triple Whale’s team investigated which industries spent the most on TikTok, and they were:
These five verticals accounted for 80% of total ad spend on TikTok during BFCM 2023.
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 indicates 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 United States 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.
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 into 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!