CPG Advertisers: “Can I use TikTok to drive offline sales and positive ROI on ad spend?”
TikTok: "You bet!"
In 2021, TikTok worked with 3rd parties to execute a series of NCSolutions offline sales lift studies in the US and a suite of marketing mix modeling analyses worldwide in partnership with Nielsen to prove their hypothesis.
And if you look at the numbers, you’ll agree that TikTok is more than the birthplace of Gen Z and millennial trends - it’s a powerful advertising channel for brands, especially in the CPG space.
What does TikTok’s ad data say?
1. Marketing mix modeling
Three separate Neilsen Media Mix Model Meta Analyses were carried out in North America, Europe, and Southeast Asia. These studies found that TikTok drives a positive paid media ROAS and offline sales efficiency across the CPG vertical. For example, in the US, TikTok ads drove a 14% higher ROAS when compared to all digital media measured in the models and 2X the offline sales efficiency. The numbers for Europe and Southeast Asia were even higher.
The study found that in-feed video performed the best, and there’s room for in-feed campaigns to scale. Nielsen also discovered that advertisers in this analysis could increase in-feed impression volume by 50% while maintaining efficient offline sales lift. In contrast, more impressions can cause ad fatigue on other paid social, which clearly isn’t the case on TikTok.
2. NCSolutions sales lift studies
According to a series of NCSolutions sales lift studies, TikTok can generate positive ROAS and incremental sales for CPG advertisers. Of the 16 studies commissioned by TikTok, 14 showed a significant sales lift, with the average ROAS being 12X the NCS median campaign performance benchmark.
5 TikTok Ad Examples for CPG: Results + Takeaways
While these initial studies are compelling, real-life examples are better. So we’ll look at 5 brands that have seen excellent results and break down their success so you can use TikTok to promote your products too.
#1: e.l.f.’s viral TikTok campaign drove 1 billion views in 6 days
Dubbed the most influential campaign on TikTok by AdWeek, California-based cosmetics brand e.l.f. went somewhere no other brand had gone by creating its own song instead of licensing a hit one.
The #EyesLipsFace campaign has 7 billion views to date and more than 5 million user-generated videos.
Among the top influencers that promoted the challenge, James Charles, generated a 12.88% engagement rate for the brand.
The campaign also gained traction with celebrities that joined in (unpaid) and generated 1.5 billion earned media impressions.
Why this worked
Since e.l.f wanted to appeal to Gen Z and show them they’re an edgy brand, Movers&Shakers produced an original song based on trending sounds that hit the right chords.
They made the song available outside of TikTok, stoking virality and ultimately creating a viral challenge.
Takeaway for CPG brands
Using the platform for its core purpose - creating trends - is the surest way to catch Gen Z’s attention. If an original song is too much effort, participate in a viral challenge to showcase your products.
#2: Kind’s first TikTok hashtag challenge racked up 20 million views in less than 24 hours
To promote its Simple Crunch Bars, snack brand Kind created a branded hashtag challenge encouraging users to post videos of themselves to highlight the bar’s crunchy sound and win a year’s supply of Kind and a trip to New York.
They also partnered with influencers like Zach King, Oven Mom, Rachel Ryle, and Kombucha Girl to create sponsored posts that, no surprise, worked like a charm. For example, Zach King’s sponsored post for Kind received 1.7 million likes and 18k shares.
Given how crowded the market is becoming and how hard it is to reach Gen Z through traditional media, Kind’s strategy to emerge as the first snack brand on TikTok can help them reach their intended audience. And that too at a fraction of the cost!
Jessica Goon, VP of digital marketing at Kind, shared with AdAge that Kind’s campaign was executed at a low cost since the in-house team handles production.
Why this worked
Kind’s campaign benefited from being tailored towards Gen Z and using influencers to promote the challenge. They also made it simple for users to participate by offering videos with narration and soundtracks that users could use.
Takeaway for CPG brands
TikTok is ideal for brands in a competitive space that want to get an edge over their competition and reach Gen Z without spending a ton.
#3: Aerie used dynamic showcase ads to achieve positive ROAS and low CPA
An intimate apparel and women’s lifestyle brand, Aerie, has had success on TikTok with branded hashtag challenges and in-feed ad campaigns. As the first to try TikTok’s Dynamic Showcase Ads (DSA), Aerie could drive conversions through personalization at scale.
DSA allows CPG brands to easily promote thousands of products with minimal time required in creative production. Aerie also tried TikTok’s custom DSA template, allowing them greater control over each ad element.
Aerie’s goal was to keep CPA less than $50, which was exceeded by 27% through DSA and 78% with the custom template. ROAS increased from 2.24 to 7.78, and conversion rate improved 3X from 0.94% to 2.93% when they switched from DSA to the template. Since dynamic ads allow you to advertise your brand on auto-pilot, Aerie also freed up time for more strategic initiatives.
Why this worked
Dynamic ads on TikTok allowed Aerie to easily promote all their products without having to create ads manually. In addition, since these offers are personalized, they drove increased conversions resulting in 78% more efficient cost per purchase than their goal.
Takeaway for CPG brands
Use dynamic ads and the custom template to personalize at scale. In the wake of iOS 14, TikTok may be a good way to advertise and get better returns on your ad spend.
#4: MetroTap increased website traffic to generate more sales
MetroTap, a small business that uses NFC-enabled hardware to connect people, used TikTok’s in-app ad tool, Promote, to turn their organic videos into TikTok ads. They ran multiple promotions to increase the reach of their organic videos, growing their following and increasing traffic to their site.
After some initial success, MetroTap switched to creating videos to reach a unique audience, ultimately resulting in an 11% increase in new followers.
As of now, 78% of MetroTap’s sales come from TikTok.
Why this worked
MetroTap first studied what worked on TikTok and then went on to promote their content through relatable humor in short videos.
Takeaway for CPG brands
Ads that don’t look like ads are winning in 2022. Users like the unpolished, low-budget feel because it makes the brand look more authentic, creating a positive image in their minds.
#5: Garnier generated brand awareness and engagement in 1 month
To promote its new line of vegan hair care products to millennials and Gen Z in France, Garnier turned to TikTok to spark a viral moment. A branded hashtag challenge with a 2D Branded Effect allowed users to create before/after transition videos to highlight the benefits of the product line.
Garnier also used influencers to promote their line and reach more users and ran a One Day Max In-Feed Ad and a TopView Lite. These ads are the first thing users see when they open the app or as the first ad in their For You feeds reinforcing the message.
Finally, the best user-generated videos were compiled to create a mash-up and were promoted using Brand Premium In-Feed Ads.
This resulted in 250 million video views, 109,000+ videos created by over 48,000 TikTok users. The Nielsen brand lift study also showed an 18% increase in awareness and 27.5% increase in ad recall showing its effectiveness.
Featuring creators in their ads also proved successful since all formats recorded CTRs above benchmarks and their mashup helped boost the challenge by 3,000 additional videos and 31+ million video views.
Despite their goal being only awareness and engagement, the challenge also resulted in product sales since users used or bought products for the videos.
Why this worked
A combination of influencer marketing, user-generated content, ad formats and branded hashtags helped Garnier achieve these results in a month.
Takeaway for CPG brands
Use a mix of TikTok ad formats to appeal to your audience and reinforce your brand’s message. A viral challenge is a good way to make users central to your story and then use UGC to gain more traction.
Want more sales? Tailor CPG ads for TikTok
At least 2 out of 5 brands we just looked at struck gold on their first try.
But this isn’t the norm.
With 7 billion views on the #tiktokmademebuyit hashtag, you’ve got an audience primed to buy. But it also means you’re competing for their attention with every other brand that has had a similar realization. So you can’t repurpose your Facebook videos on TikTok and expect it to drive results.
According to TikTok’s research, TikTok-specific ads drove 19% higher ad recall compared to non-TikTok-specific ads. When a tailored ad was made in collaboration with a creator, the ad recall was a whopping 27%.
How to generate video creatives for TikTok?
With many CPG brands realizing the power TikTok holds, it won’t be long before we hear “Let’s run TikToks” instead of “ads.”
But to win the race on TikTok you will need to leverage the right technology that can help you produce tons of video ad variations. Here's everything you need to know about TikTok creative production.
Not sure how will it all work out for you? Book a demo, and see what Hunch can do for you.
