Biddable Ads Are Coming to TikTok, Opening Up the Popular Platform to More Marketers

Company is also in talks to add better measurement tools

TikTok has a reported 40 million mostly preteen, teen and young adult users in the U.S. Getty Images

TikTok has told agency partners in the U.S. that it is working on a biddable advertising option on the platform, signaling it is looking to further open up to advertisers and their digital dollars.

Two media buyers told Adweek that representatives from TikTok have told them that a biddable option, in which advertisers will be able to bid against one another for the ad impressions they want on a self-managed platform, is in the works. One of the buyers said they expected the biddable option to become available sometime this summer, and both said they expected a biddable platform would come along with more advanced targeting methods and better measurement tools.

The buyers requested to speak with Adweek anonymously so they could share details from private conversations without risking business relationships.

If you are over 25 and are wondering what TikTok is, it’s a Vine-like mobile app in which users can make and watch short videos, usually set to music, and riff on other people’s videos. The app is already popular in other markets like China, where TikTok’s parent company is headquartered, and reportedly has 40 million active U.S. users, most of whom are kids, teens and young adults.

As of now, TikTok only offers advertisers direct IO (insertion order) buys, in which an advertiser works directly with the platform to buy and place ads. TikTok, which began testing ads in the U.S. this year, is pitching advertisers four different ad formats, buyers said, including in-feed video ads, brand takeover ads that appear when a user first opens the app during the takeover period, banner ads that encourage TikTok users to participate in brand-designed video challenges, and branded lenses that a TikTok user may select to use in their own videos.

Brand takeover ads can run anywhere between $50,000 and $100,000, one buyer said. A third buyer, who also requested anonymity to speak to private figures, said hashtag challenges (in which a brand or content creator uploads a video, hashtags it and calls on other TikTok users to create of their own versions of that video using the same hashtag) were being sold on a flat fee of $150,000 for six days with promotion. On those hashtag challenges, TikTok is advising buyers to budget an additional $100,000 to $200,000 to promote the hashtag challenge through other ad units, the buyer said.

In-feed video ads like these have appeared in TikTok users' feeds this month.

Media buyers and the brands they work with are keeping a close eye on TikTok as it expands in the U.S. and boasts higher-than-average time spent and international appeal. Multinational brands looking to reach audiences outside the U.S. and brands interested in reaching younger consumers are particularly interested.

Jenny Lang, UM’s svp, managing partner, integrated investment, told Adweek the platform was particularly appealing for consumer-packaged-goods brands looking to reach females in the 16-24 demo.

“They know their sweet spot is young females, and they know they’re heavily international,” said Lang, who plans on executing a TikTok campaign for a CPG client in the future. She added, “And while the amount of people on the platform is clearly not as big as other platforms, we always like to get into those emerging platforms where there’s a really engaged audience.”

Janet Levine, managing director, invention+, Mindshare, said the platform was intriguing because of its ability to reach teens and build long-term brand loyalty.

“You’ve got a Gen Z demographic that marketers want to reach—one that can be difficult to reach elsewhere due to buying and targeting restrictions when it comes to marketing to teenagers,” Levine said.

Some brands are already making the jump. GrubHub, for instance, ran a brand takeover ad campaign on the app in February, and denim brand Guess last year rolled out a branded hashtag challenge, #InMyDenim. In November, Jimmy Fallon promoted the app with a hashtag challenge, encouraging his viewers to send in their versions of his so-called “tumbleweed challenge” videos. As of mid-February, videos tagged with the #tumbleweedchallenge on TikTok had amassed more than 26 million views.

While TikTok offers advertisers some basic targeting capabilities, including state-level geotargeting and gender targeting, it is not available on all of its ad formats. Buyers are hopeful that more targeting options will bring TikTok up to par with other social platforms like Snapchat, Instagram and Twitter, which have more granular targeting capabilities.

Coming soon, too, are more ad verification and viewability measurement tools, buyers told Adweek. TikTok told Lang it will soon offer analytics tools from the measurement company Moat and is in conversations to onboard measurement tools from IAF and DoubleVerify, she said.

A representative for TikTok did not respond to a request for more information about its plans.

Meanwhile, brands are also looking to leverage TikTok’s roster of popular content creators to strike up relationships with to promote their products. Guess’ branded hashtag challenge made use of TikTok influencers to promote #InMyDenim. And Social Native, a branded content platform that helps companies connect with social media influencers and content creators, this month debuted TikTok Influence, which is dedicated to coordinating influencer campaigns on the platform.

David Shadpour, CEO of Social Native, said influencer campaigns can work more effectively on TikTok now before the platform becomes ad-saturated and advertising costs rise.

“They don’t currently have a widely available ad solution, so the consumers that are on TikTok are not accustomed to being bombarded with ads,” Shadpour said. “If you can get in early and get in before it gets too noisy, you’ll have a bigger impact.”

Noah Mallin, head of experience, content and sponsorships at the agency Wavemaker, said TikTok is a natural platform for influencers, and that he expected TikTok might eventually create a structure through which brands and influencers can codify and label their partnerships.

“It would not surprise me if they made a more formalized structure for brands and influencers to more clearly delineate that they’re working together,” Mallin said.

Both Mallin and Lang, though, cautioned that TikTok, as with any other user-generated content platform, comes with concerns over brand safety. In December, for instance, Motherboard reported that TikTok accounts were posting and sharing hate speech and content promoting Nazi ideology and literature.

In conversations with buyers, TikTok is stressing its content moderation processes aimed at identifying and taking down community guidelines, Lang said.

“With any kind of user-generated content, there is risk,” Lang said.

@kelseymsutton Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.