Following a Marketing Mix Modeling (MMM) study conducted by Nielsen, the prominent information, data and market measurement firm, TikTok for Business reveals the Return on Advertising Spends (ROAS) and Effectiveness of TikTok ad spends for businesses.
The Marketing Mix Modeling (MMM) has been the gold standard method of measuring efficiency and effectiveness for over 30 years. For the purpose of the study, it was run on six brands spanning three categories: Food & Beverage, Health & Personal Care, and Home Care, across Saudi Arabia, UAE, and Egypt, with the aim to help identify modelling best practices for TikTok and provide marketers a view into the relative category performance across their advertising offering.
Vipul Jain, Head of Measurement, Middle East, Africa and Eastern Europe – TikTok, said, “When we invite businesses of all sizes to leverage the suite of ad products and solutions TikTok has to offer – and bring to life authentic, engaging and creative content, we promise them unparalleled impact. Thanks to this study, we’re happy to share the real life results and ROAS across CPG to further help brands tangibly assess the outcome of their advertising and share with them best practices, as we continue to learn, innovate and grow together.”
Amira Zakaria, VP Marketing Effectiveness, AMET, Nielsen commented: “Nielsen’s best in class advanced modelling has brought some exciting insights for TikTok MEA, to tell a bold and holistic story on how TikTok drives ROAS for CPG brands.”
TikTok aims to inspire creativity, authenticity, and inclusion through a unique format of short-form mobile video content. As a result, the platform has seen tremendous growth in audiences for engaging entertainment and inspirational content over the years. Since the launch of TikTok for Business, many local, regional and international brands have leveraged the power of TikTok’s highly engaged community. By creating relevant content and connecting with their audiences on an emotional level, they have been discovered, loved, and have gone viral and turned online traction to real-life business impact. In parallel, in order to help brands tap into this large, powerful and growing audience, TikTok For Business has built a suite of branded advertising options, including Open Screen ads such as Brand Takeover, TopView, One day max, In-Feed Video ads, Reservation In-feed and Branded Effects. TikTok is also unique in its vast organic user engagement with Branded Hashtag Challenges (HTC).
Below are some key takeaways and tips from the study, that brands and advertisers can benefit from next time they plan their digital campaigns, to optimize the outcome and ROAS on TikTok:
TikTok provides a measurable and significant impact on brand sales
- TikTok paid ads drove a ROAS of $1.83 in MEA which is 3.5 times higher than other Nielsen measured media.
- Tiktok ROAS is also 56% higher than other digital** ROAS (excluding Tiktok) and exceeds ROAS for all other media across the measured projects.
- The ROAS doubled to $3.7 with the impact of incremental earned impressions.
The Food & Beverage (F&B) category saw the highest ROAS for TikTok vs all other Media
- For the F&B category, TikTok paid ROAS is 66% higher than total digital and 4x higher than other media.
- Health & Personal Care also achieved a ROAS of 1.92x vs other media and 1.67x vs digital media.
- Households achieved ROAS which is 58% higher than total digital and 3.2x higher than other media.
- TikTok paid ads for all categories modeled exceeded the CPG benchmarks as well.
Drive additional ROAS by running multiple TikTok ad formats at a time when running campaigns
It is recommended that advertisers execute multiple ad formats simultaneously within their TikTok campaigns to leverage the synergistic impact.
- Brands executing multiple ad formats for their TikTok campaigns drove as much as 10% higher ROAS, compared with brands that focused only on an individual ad format.
- In UAE, brands executing multiple ad formats for their TikTok campaigns drove 31% higher ROAS ($2.1), compared with brands that focused only on an individual ad format ($1.6).
- Whereas from a category lens, multiple formats running simultaneously vs. single ad formats have a stronger ROAS for Food & Beverage (16% higher) and Health & Personal Care (18% higher).
Drive incremental ROAS by maintaining in-feed ads for higher weeks on air on TikTok
- Running in-feed ads for 20+ weeks over 2 years drives 16% higher ROAS than brands with less than 20 weeks of in-feed ads.
- *Other Media includes TV, Radio, OOH (excl. Egypt), Print, Cinema (Excl. KSA). **Total Digital includes social, display, video, and programmatic; excluding TikTok. ***Total Media includes total digital and other media channels; excluding TikTok.
- Effectiveness: Retail sales contribution % per billion impressions