78% of Small Businesses Say TikTok Ads Have Boosted Profits (2024)

FAQs

78% of Small Businesses Say TikTok Ads Have Boosted Profits? ›

A new survey from Capterra, an online marketplace for the enterprise software industry, found that 78% of small businesses that run ads on TikTok have already realized a positive return on investment—the majority within just six months.

According to TikTok, 83% of users find the app's advertisem*nts entertaining, and 1 in 4 users worldwide have bought or looked into a product after seeing it on the app (source: TikTok).

Average Return on Advertisem*nt Spend (ROAS)

The average ROAS on TikTok is usually around $1.20 to $3 per $1 spent, with ROAS increasing as more ads and formats are used. Facebook ads aren't as lucrative as other platforms, bringing only an average of $2 ROAS (often under $1 for B2C e-commerce ads).

TikTok delivers more than just entertainment: it fuels significant economic growth for more than seven million businesses and the U.S. economy as a whole by helping to support more than $24 billion in gross domestic product (GDP), and more than 224,000 American jobs, delivering a competitive edge to small businesses ...

TikTok ads can be worth it if you have a well-defined target audience, are willing to invest in creative content, and closely monitor and optimise your campaigns. However, success on TikTok requires a deep understanding of the platform and its users, so it's essential to approach it strategically.

Whether you want to get more followers on TikTok or convert more followers into paying customers, TikTok promotions can help you reach your marketing goals faster and tap into new audiences.

At a relatively low cost ($10 per CPM and $1.00 per CPC) to advertise to a targeted audience, and an average user engagement rate between 5-16%, TikTok ads have one of the highest potential ROI's in all of advertising.

Benefits of TikTok for small business

It has 1 billion active monthly users in 141 countries. More eyes on the app mean more potential for those eyes landing on one of your branded ads. This makes it an attractive marketing platform for businesses that want to reach a large audience.

Overall, TikTok Shop provides businesses with a powerful platform to showcase their products, engage with their audience, and drive sales in a creative and dynamic way.

What are the benefits of TikTok ads? ›

TikTok formats ads to facilitate engagement

In-feed ads appear naturally as users scroll and allow users to like, comment, share, and follow. Both of these formats enable users to engage with brands directly and build connection and brand loyalty.

Increases Conversion Rate. TikTok is popular because people are drawn to the platform's creative and relatable content. TikTok for small businesses is a powerful marketing tool that can help them reach a wider audience and increase conversion rates.

One of the main disadvantages of marketing on TikTok is its content format limitations. TikTok videos can be no longer than 60 seconds, which can pose a challenge for marketers who need to convey complex messages or showcase detailed product features.

Reach new audiences and grow your business with TikTok

TikTok is one of the fastest growing platforms of our time. If you're still not using it for your business, you're missing out on tons of potential brand awareness, revenue and engagement. Follow the steps in this article to get started on TikTok on the right foot.

The Role of Social Media in Influencer Marketing

Around 72% of brands use Instagram for influencer marketing, followed closely by TikTok with 61%. According to 89% of marketers, the return on investment (ROI) from influencer marketing is as good as or surpasses that of other marketing channels.