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.

YoY increases in CPMs are especially pronounced on TikTok, given the nascency of this platform relative to Meta and Google. Advertisers are likely joining at a faster rate than they’re joining mature platforms, and TikTok is likely developing products that are able to capture higher cost per impression from advertisers while still delivering against advertiser KPIs. Like Google and Meta, we should expect an especially steep YoY climb in CPMs towards the end of Q3 through Q4 given the combination of election season and the holidays.

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).