TikTok Ads conversion tracking: cost and conversion rate insights

TikTok is one of the biggest social media platforms, with 16.000 videos being uploaded every minute and almost ⅓ of the world's population registered users. Thus, it is not surprising that TikTok advertising is so popular, and TikTok ad campaigns may cost a small fortune (up to $200,000 per week for a premium segment).

Considering that, measuring the conversion rate for the commercials running on the platform becomes of vital importance. In this article, we will cover different methods for gathering data to measure campaign performance, answer the most popular questions on TikTok Ads, and give recommendations on how to improve your results.

Advertising on TikTok is a complex process that consists of choosing one or several of the different ad formats, developing the strategy, communicating with influencers, launching campaigns, measuring their effectiveness and conversion rate, gathering the available data about customers, and adapting your approach based on the gathered information.

TikTok has become a powerful ad platform for eCommerce and digital marketing businesses where they can promote their products and services, reaching massive amounts of viewers daily. It offers various ad formats that suit companies of different sizes, budgets, and goals.

TikTok ads conversion tracking is crucial for getting performance data and measuring the effectiveness of your TikTok ads. It is a complicated process that consists of several stages:

A good conversion rate for TikTok ads typically ranges from 1% to 3%. A common approach is to preserve and look for minor adjustments if the number you have is in that range. You should review your TikTok ads and start thinking about changing something if the number goes below 1%, and thoroughly review your bidding strategy, targeting approach, and ad quality if it drops to 0.5% or below.

Numerous reasons exist why the conversion rate of your TikTok should matter.

To sum up, TikTok conversion tracking shows you which ad campaigns are effective and what makes them such (e.g., intuitive funnel, quality creatives, etc.). Based on its results, you can make decisions based on the "field" data rather than your intuition, improve ROI, and even optimize your company's ad spend.

The TikTok Events API is a server-side solution for sending the TikTok ads conversion data from the server GTM container or Gateway to TikTok Ads Manager. This method is more reliable and precise than simply using the tracking Pixel on the client's side to communicate with analytics. The whole procedure looks as follows:

This method is more resistant to ad blockers and more compliant with privacy policies, which makes it a better choice for user data tracking, compared to the conventional usage of the Tracking Pixel on the client's side.

There are 3 basic methods for setting up TikTok conversion tracking, some of which guarantee a more consistent performance than others.

The TikTok Tracking Pixel is a piece of JavaScript code to be added to your website's header section either manually or using a Google Tag Manager container.

The Pixel is good for TikTok ads tracking as it is easy to configure, cheap, does not require any additional settings or resources, and tracks all the website actions directly.

Talking about its disadvantages, it relies on the client-side tracking technology and thus, can be vulnerable to ad blockers and browser restrictions. Moreover, it does not provide control over the tracked data before it is sent to analytics. This means there is a risk of compliance issues.

The TikTok Events API is a solution for server-side tracking; it acts as a bridge between the server and the analytical platform. Talking about server-side, it is a more reliable approach to data tracking. It supposes that the Pixel sends all the tracked data to the cloud server, where it can be checked for compliance, enriched with the missing data, and then sent to TikTok Ads Manager. The last step is when you need the TikTok Events API.

The Events API provides you with complete control over the tracked data and has rich customization capabilities in terms of the events that can be sent to analytics. However, you need to pay for that with a more profound server-side tracking expertise and the requirement to set up almost everything manually.

The TikTok Events API Gateway is another server-side tracking solution for tracking conversion events on TikTok, minimizing the effect of ad blockers, browser restrictions, and allowing you to stay compliant with the required policies.

To start using it, you need to register for the Events API access first. Then, however, you won't add it to the server GTM but rather deploy it via the Gateway.

Hosting an API via a Gateway is a cheaper and easier-to-configure approach, which provides you with fewer customization possibilities, though. We have a detailed guide on how to set up the TikTok Events API via GTM and Gateway. Do not hesitate to check it if you need more details on the steps and nuances.

The TikTok Events API is better because it transfers the package of tracked data from the server, when it is compliant and with all possible gaps filled. This allows for getting the analytical reports of higher quality. The Tracking Pixel, on the other hand, operates in real-time and runs between the client's browser and analytics. This means there is no chance for encrypting or removing all the privacy data, and everything blocked by the ad blockers or browser restrictions is completely ignored and never reaches its destination. Thus, if you are not sure what to choose, TikTok Pixel or Events API, it is a good idea to stick to the latter.

Different types of ads are available to businesses that decide to launch commercials on TikTok. Depending on whether you are aiming at lead generation, user interaction, or increasing brand awareness, choose the ad group that best meets your needs.

The cost for different types of TikTok ads may vary, so always decide which to use based on your campaign objectives and business goals.

TikTok is an extremely popular platform among teenagers and young adults. People under 34 are the most numerous user group - almost 70%. Basically, this means that the majority of potential customers are people familiar with the internet, with jobs, money, and familiar with modern trends. Consequently, it makes sense to expect more sales on TikTok than on any other resource with a less solvent audience.

One more important point is the variety of ad content available on the platform. From simple short-form videos to hashtag challenges, from AR effects to well-known carousels, TikTok ads work because they are creative, original, and novel.

Below, you can find the average TikTok conversion rate for different industries. However, if you get a similar number, it does not mean that there is nothing else to be done. You can and should always work on increasing CVR and adjusting your ads depending on your campaign goals.

It is worth mentioning that the financial services industry is the hardest to convert, as there are more trust barriers due to its specifics. You can consider increasing your minimum daily budget to get better results, but this will also influence your CPR, so you need to be careful when making such decisions and always consider all pros, cons, and key metrics you are aiming at when setting expectations for TikTok ads conversion rate.

Although both platforms may seem similar at first glance, the TikTok community is very different from Instagram's. Both services may also have different formats available and ad placement rules. Check the table below to get a general idea of the main differences.

These differences, however, do not mean that you should never try to launch a new brand advertisement on Instagram or try to launch successful campaigns based on interests on TikTok. Social media algorithms can often work in an unexpected and unexplainable way. Thus, in this sphere, everything is worth trying.

TikTok advertising costs may vary significantly. The average CPM for TikTok ads ranges from $3.20 to $10. Acceptable CPC is on the level of $0.2 - $0.5. This number depends on various factors:

Thus, if you want to launch ads for TikTok, you should consider all these factors so as not to be surprised later when your first bill arrives.

Here are some TikTok best practices on what you should pay attention to and what approaches to use if you are planning to run ads on TikTok.

Remember that users convert only if the video hooks them, and then they are interested in the product, not vice versa. Boring, artificial, and not creative TikTok ads are a sure way to failure.

TikTok ads tracking can be optimized in different ways and with different tools. Here are some recommendations on what can be done.

A good practice is also to use both Pixel and API to send events to the analytical platform. This will guarantee the most precise results, but you need to use deduplication to prevent the double-counting of events.

Tracking TikTok offline conversions requires you to send the data about all the purchases that happened outside your website to the platform. This can be easily done following this procedure.

This will help TikTok to match an offline purchase with an online interaction, making your conversion tracking more precise.