Quantifying the true impact of your TikTok campaigns
With popular formats and trends including GRWM (Get Ready With Me) and Before & After videos, TikTok is the go-to destination for beauty lovers. And with 50% of TikTok users in the Nordics calling themselves beauty enthusiasts, the Nordics region is no different [1]. TikTok is disrupting the category and fuelling a new era of shopping; #TikTokMadeMeBuyIt has 640 million monthly video views in the Nordics alone [2].
Advertisers are naturally looking to demonstrate the impact these growing communities are having on their advertising spend on TikTok. One way in which they are doing this is through the use of Marketing Mix Modelling (MMx), which allows them to get a strategic and holistic view on TikTok’s impact on sales revenue in the marketing mix.
Acceleration Nordics and L'Oréal Nordics wanted to better understand TikTok’s role in their media mix, their return on investment from the platform, and the campaign elements that drive success on TikTok. To gain more insight into these questions, they conducted an MMx study, focusing on two L'Oréal-owned beauty brands, NYX and Maybelline, in Denmark and Sweden. Read on to find out what they discovered.
Digging into TikTok's impact
1. TikTok ROAS is on average 30% higher than other media channels
Across Maybelline and NYX in Denmark and Sweden, TikTok has a ROAS that is 30% higher than other media channels. Acceleration also recommends that L'Oréal can increase their spend on TikTok by 4-12% without hitting saturation.
2. 10% of the total revenue generated by TikTok is due to complementary paid and organic activity
Organic TikTok contributed to around 0.5% of NYX sales in both Denmark and Sweden, with 10% of the total TikTok generated revenue a result of the synergy between paid and organic activity. In Denmark we saw 30% correlation between organic views and paid impressions for NYX, further indicating a significant synergy effect between the two.
3. Bundling campaign objectives drives higher performance
While video views was the highest-performing single objective, L'Oreal saw higher performance when bundling objectives, with 11% higher ROAS for bundled objectives compared to single objectives.
Bundling objectives can lower CPMs by broadening an advertiser's reach and optimising for the delivery of goals within a single campaign. Using multiple objectives, in line with your overall campaign objectives, allows TikTok's recommendation system to better find the right audience for your campaign. Brands can try bundling objectives and ad formats and test to see which combination drives higher performance.
4. TikTok ads with creators are significantly more effective than non-creator ads
In line with existing TikTok research, the study found that TikTok ads with creators were 64% more effective than regular non-creator ads [3].
The results and insights coming out of our comprehensive MMx project for L’Oréal in the Nordics clearly underlines that TikTok is a platform of growing significance in the region, with potential to carry more investment without losing efficiency. This is in line with findings from other projects that have we done recently and highlights that advertisers need to be very aware of the constantly evolving digital media landscape when allocating budgets to optimize media-driven sales.
How to model TikTok in MMx studies
Acceleration & L'Oréal's study found that it was extremely useful to model TikTok separately instead of grouping the platform with other digital video formats and social media platforms. Grouping TikTok with other platforms in this way would result in too broad conclusions, and not provide the necessary and detailed data to support media optimization opportunities. Ideally, to capture the full potential and many possibilities on TikTok, TikTok investments should be separated into even more detailed subgroups (such as ad formats, objectives etc.), as conclusions in this study show a significant difference in performance.
Our goal in Marketing Science at TikTok is to use effective measurement to help brands make smarter advertising decisions on TikTok. Marketing Mix Modelling is one such measurement solution and is a privacy safe way to examine TikTok's role in the media mix. It's wonderful to see TikTok broken out as a standalone variable in this study, and even further into sub-variables. These more granular insights into things like bundling of objectives, allow for more effective optimisation on the platform. It's also great to see existing best practices around creator-led content further supported.
If you're interested in including TikTok data in your Media Mix Models, please reach out to your TikTok rep to get the process started! To find out more about measurement opportunities on TikTok, read our guide.
Sources:
1. GWI, Q3 2022 - Q2 2023, SE, DK, NO, Audience: TikTok users
2. TikTok Marketing Science EUI Beauty Vertical Research 2022 conducted by InSites Consulting
3. TikTok Marketing Science Global Creators Like Me Study 2021 (US Results) conducted by Hotspex (Influenced by a creator/influencer in some way, Millennials, n=322)