The Ultimate Guide to Bidding Strategies on TikTok 

The Ultimate Guide to Bidding Strategies on TikTok 

If you are not advertising on TikTok, now is the time to start. TikTok is continuously improving by bringing new updates to its Business Center. If you can present your brand through creative and entertaining videos, you should begin exploring TikTok Ads.

With TikTok Creative Center, you can go side by side with other content creators and use tools that will help you make unique creatives. Once you create enough videos to start advertising on TikTok, it’s time to learn about advertising strategies. Bidding strategies on TikTok are a crucial strategic element.

When you get to explore and understand them, you will be able to plan your advertising strategy according to your budget.   

Bidding and Optimization 

It's essential to think about the most efficient way of spending your money based on your selling products and your available capital. This way, you can control your budget spending, the delivery of your ads, and the cost per result.

When you have everything prepared—Pixel implemented on your website and your videos—you’re ready to start creating your campaigns! 

After you set up all the information at the campaign level, you’re moving to the ad group level. In this part of campaign creation, you’ll get to the required section—Bidding & Optimization. 

Here, you can choose between three bidding strategies: 

  • Bid Cap 
  • Cost Cap 
  • Lowest Cost 

  • Let’s explore each of these bidding strategies on TikTok. We’ll show which advertising objectives are supported for each bidding strategy, which will help you adjust your bidding strategies to your brand goals. 

    Bid Cap 

    This is a good option if you want to control your spending and not waste money. You can set your bid cap—the maximum cost per result you are willing to bid. So it wouldn’t be possible to go over your set bid cap. The system will always ensure that your average cost per result is below your bid cap.  

    Supported Advertising Objectives: Traffic, Reach, Video View, App Install, and Conversion.  

    Cost Cap 

    This strategy means keeping your average cost around or lower than your bid, regardless of your budget. Using Cost Cap will give the system an average cost per result that it tries to achieve. So, unlike bid cap, where you set your specific bid over which you do not go, cost cap gives the system the average amount you are willing to spend per result. 

    Supported Advertising Objectives: App Installs, Conversions*, and Lead Generation. 

    *Cost Cap is only available for Conversions campaigns when the Optimization Goal is set to Conversion. 

    Lowest Cost  

    It is maybe the best option if you’re new to TikTok Ads and don’t know how competitive the auction environment is. By choosing this bidding strategy, you are not setting up any bid. And you just need to set your daily budget, and the system will ensure that your daily budget is spent at the lowest cost per result. This way, the algorithm will generate as many results as possible with your daily budget.  

    Supported Advertising Objectives: Traffic, Reach, Video Views, App Installs, Conversions, Lead Generation, and Catalog Sales. 

    If you’re unsure which bidding strategy to choose, you can always try split testing. You can create two campaigns or ad groups with different bidding options and see which one will suit your brand best.  

    Value-Based Optimization 

    If you’ve been running ads for some time and you managed to collect at least twenty purchases, you should try this method.  

    When your ad account collects complete payment events, the algorithm has started learning about your audience. Coming to this stadium means that the system has gathered some useful data that can be used for retargeting. In this case, it would be used to find the people most likely to make a purchase. 

    So, this way, the algorithm focuses on people with the most value, meaning they are most likely to spend more money on your products or services. They buy multiple products in one go or purchase products with higher price points. 

    Conditions to use VBO: 

    • You have obtained at least 20 attributed unique purchases (complete payments) with value over the last seven days on TikTok, News Feed App Series, or Pangle placements – Web. 
    • You have generated over 30 purchase conversion events with value in the last seven days on TikTok, News Feed App Series placements, or Pangle – App.

    Supported Advertising Objectives:  

    • Conversions – Web 
    • App Installs, Catalog Sales, Conversions – App 

    If you’re meeting these conditions, you’re ready for VBO

    Campaign Budget Optimization 

    When creating a campaign, on the campaign level, you will be able to choose CBO. This method will allow you to optimize your budget for all ad groups in the campaign. The campaign budget will be allocated to ad groups based on their performance.  

    Supported Advertising Objectives: Traffic, Catalog Sales, Lead Generation, Community Interaction, App Installs (Non-AEO & AEO), Conversions (oCPM), Reach (Testing), Video Views (Testing). 

    Final Thoughts 

    There are numerous methods to find your most profitable TikTok advertising strategy that fits your budget. If you’re unsure which way to go, our advice is to have many split tests and see what suits you the best. 

    Remember, besides bidding strategies on TikTok, the most crucial part of a successful strategy on TikTok are funny and entertaining creatives! Visit our TikTok Ads page to learn more about our services!

    About the author

    Isidora Stankić is a TikTok Ads Specialist at Sellers Alley. Since joining the team, she has shown great interest in Amazon PPC and TikTok Ads. She is constantly learning new things and expanding her knowledge. Isidora is a team player, honest, and incredibly dedicated.

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