The Surprising Reason Why TikTok is eating Facebook’s lunch

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Guest post by Dennis Yu

Matt McNabb is a 40 year old chiropractor in Boca Raton, Florida. At the urging of his friend, Danny, he posted a 2 minute video of a routine adjustment on TikTok. That video blew up, getting 1.2 million views and 32,900 likes. He got so many inquiries that he had to hire a new patient coordinator to handle them.

It was simply a cell phone video of him doing what he has done thousands of times since 2012. On Dr. McNabb’s Facebook and YouTube, you’ll see dozens of the same types of videos, going nowhere– 2 likes on each one if he’s lucky.

What was different about this one TikTok post?

His buddy, Danny Veiga, put some money behind it, targeting people within driving distance of the office, running the second most popular ads on TikTok called a lead ad. Instead of sending users to a website, the ad goes to an auto-filled form, copying Facebook’s lead ad mechanism nearly identically.

Perry and I have peeked inside hundreds of lead ad campaigns and see average CPLs (cost per lead) at just over $7, varying by industry. Average form completion rates are 35%, ad CTR is at 1%, and base CPMs hover around $13.

TikTok ad performance is about triple what we see on Facebook, largely because traffic is cheaper (half the price), creative performance is stronger, and the TikTok algorithm is smarter.

I was at Jake Paul’s house shooting a course teaching young adults how to start social media marketing agencies. While Jake and I were upstairs drinking toilet water (I’ll tell you more about that another time), a few members of our team couldn’t help but take selfie videos around his house. One of them got 461,000 likes because the algorithm recognized the background was Jake Paul’s house. So TikTok showed it to fans of Jake Paul.

Other insiders have confided that they will place objects in the background of their videos to try to influence the algorithm. David Solomon, a real estate agent in Santa Monica makes TikToks in front of the Santa Monica pier and in front of mansions he’s selling in Malibu. Facebook uses engagement and Google uses keywords– but TikTok uses all signals to decide what you see on the “for you page”, which is your newsfeed.

GDPR and general privacy laws have forced the networks to remove detailed targeting and most demographic targeting from their ads platforms, causing many advertisers to freak out. But on TikTok, you can’t even target, except by a handful of interests, DMA, gender, and age buckets.

And this is good for everyone, since your content and the algorithm together do the targeting now. TikTok goes by video signals to determine who else to show your videos to. And the objective based bidding algo is like a heat seeking missile– so choose your campaign objectives wisely.

Noah Brierley made $50,000 last month on TikTok by making videos on “what they don’t teach you in school”. At 1.8 million followers with 1 million likes, he’s gotten the attention of Zip Recruiter and other job sites, who pay him 5 figures for sponsored content. He dropped out of college to become a full-time TikToker with his dad’s support. He’s even helped his dad (in his 50’s) go viral on TikTok by following a few simple rules.

His “secret” is to not make stuff that looks like ads– use vertical cell phone video, start with a hook, make sure you have a good mic (the pros know this), and have a script (to prevent “rambling old man” syndrome). You’ll hear TikTok’s refrain of “Don’t make ads, make TikToks”.

The head of growth at ByteDance (parent company of TikTok), hired us to help them teach TikTok ads to disgruntled Facebook advertisers. I’d like to say that we were behindTikTok’s radical growth to $11 billion last year in ad revenue and their jumping from the #7 most popular site on the internet to #1 (ahead of Google). But it was Facebook’s own self-inflicted wounds and this one particularly clever strategy that I have yet to hear anyone discuss…

And that is this…. TikTok was designed from the core to be a paid word of mouth engine.

They knew from the start that business owners and professionals would struggle trying to create their own content. So rather than trying to ram creative tools and agencies down their throat, they had a more elegant approach– let your fans create your content for you.

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TikTok told us that 70 cents of every ad dollar was being spent on spark ads, which is boosting someone else’s post. That’s not the same thing as Stephen Curry starring in a Kia commercial. I have seen Stephen Curry driving around Oakland in an orange Lamborghini, not a Kia. Rather, a spark ad is an organic post that the creator can give you an access code to be able to boost.

You can scour TikTok for fans that have said good things about you– then asking them if they wouldn’t mind giving you the advertising access code to be able to boost that post. Or you can be like Super8, the world’s largest budget hotel chain, asking families to post their favorite travel hacks, sponsoring the best ones. What broke college kid wouldn’t want to be famous and earn a $50 Amazon gift card in the process, too?

The idea of a spark ad is the closest the internet has ever seen to a boosted review. You remember when Yelp got in trouble for letting restaurants pay to highlight their top reviews? TikTok takes it to a new level by not only creating incentives for creators like Noah to be able to make money as a weird sort of super affiliate, but creating a whole ecosystem for creators and brands to collaborate. They built a directory, like a mini dating website, that lets creators and brands set up profiles on who they are and who they’re looking to match with. And third party directories have spun up, too.

Because effective modern advertising is about doing the opposite of what looks like “advertising”, TikTok knew to not allow marketers to come in and ruin everything. Remember when email was a joy to receive before there was spam? Or how interesting Instagram was before advertisers came in? TikTok is solving the problem of crappy, non-interesting ads by simply enabling your fans to do the work for you.

The last surprise is that you don’t need to be on TikTok to be able to run ads on the platform. They knew professionals like us don’t have 52 minutes per day (more than any platform) to spend on TikTok. Nor will we want to sing and dance.

So the ad accounts do not have to be connected to a TikTok user account to be able to run ads in the feed. Of course, if you run a spark ad to boost your own organic post or that of someone else (more likely), then fine.

Perry Marshall and I spent the last 18 months exploring the TikTok ads platform, finding out what works and doesn’t work, so you, as a serious business owner, can find value in TikTok. We delayed releasing a book until now, since the user base was still young and the ad platform was still clunky. But now TikTok ads in 2022 is like Facebook in 2007, where the balance of opportunity and effort is in our favor.

We’ve put together step-by-step templates on how to make your 15 second videos (or how to collect 15 second videos from your customers), how to track performance (your “digital plumbing” from TikTok to your website, email, and CRM), how to do targeting (hint: you don’t), what mistakes to avoid, how to scale up campaigns, and more.

Click here to buy our new book, The Definitive Guide to TikTok Advertising.


About Dennis Yu
Dennis is the CEO of BlitzMetrics, a digital marketing company, and has been building brands and teaching marketing for over 25 years. He specializes in helping young adults grow into leaders of tomorrow by confidently developing their marketing skills through training programs and seminars with enterprise clients like The Golden State Warriors, Nike, and Rosetta Stone

Dennis has been featured in The Wall Street Journal, New York Times, LA Times, National Public Radio, TechCrunch, Fox News, CNN, CBS Evening News and co-authored “Facebook Nation” – a textbook taught in over 700 colleges and universities.

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