What’s Happening with TikTok CPMs?

Over the last few years, TikTok advertising costs have risen as the social media platform has grown and matured its advertising offerings. Consequently, we’ve seen an increase in advertisers diversifying their channel mix beyond Google and Meta and spending much more on TikTok. These days, TikTok users can’t go a few scrolls without seeing an ad or promoted content. With increased competition, we would naturally expect TikTok CPMs to increase, but to what extent? 

To help shed light on industry-wide trends, we have partnered with Varos to dig into and analyze advertising data across industries and verticals. Our goal is to help advertisers understand whether the price increases they're seeing are specific to their account, or a result of industry-wide trends.

Unlike Meta and Google CPM trends, TikTok CPMs saw an average increase of about 50% from the previous year, starting in September 2023 and continuing into the first quarter of 2024. With Google and Meta CPMs remaining high and increased usage of TikTok, we expect this trend to continue through 2024.

Over the last few years, TikTok has made many improvements to its advertising platform, such as automated creative optimization, new ad placements, better pixel tracking, and new product launches like TikTok Shop. These additions have led to not only an increase in the number of advertisers, but also an increase in the number of large advertisers spending over $100K a month. 

It’s important to remember that while TikTok CPMs will likely continue to increase, improved advertising technologies within the platform will also likely lead to improved downstream performance and help advertisers hit their goals.

What does this mean for advertisers?

TikTok CPMs are still 60% lower than Meta and Google CPMs, making it a potentially more effective channel for advertisers to invest in for both brand and performance marketing. When working with clients, Right Side Up often recommends taking a more holistic approach and combining both brand and performance objectives to drive incremental revenue, rather than focusing purely on direct response.

If you're interested in chatting about TikTok ad strategy or learning more about TikTok advertising trends, reach out to us. We'd love to discuss your growth strategy, no strings attached.

‍Varos offers real-time benchmarks for digital marketing and revenue metrics (CAC, retention, CPM, CTR, Conversion Rate, etc.) compared to similar companies. We're a data co-op that has 6,000+ companies sharing data with us ($4bn annual ad spend tracked).