TikTok Advertising: How It Works

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Advertising doesn’t solve a strategy problem. Advertising gives you more of what you already have. If you have confusion, if you don’t know your customer base, if you have 10 different kinds of customers, advertising’s not gonna solve that. If you have a clear customer that’s buying for a clear reason and you have a clear product with a clear pain, then you’re gonna find TikTok fantastic for you because it’ll find more people for you. You just need to know how.

The Initial Piece of Content

The content you have should carry high authority.

People talk about content marketing and how you need ‘great content’, but how exactly does one create ‘great content’, especially with limited resources? We know the struggle and that is why the Content Marketing Course has been formulated. Check it out.

The Boost

What the boost does is it layers in that initial piece so that when your clients see your offer,  “Come book a 15-minute call”, then they get a sense of who you are. You will be in the back of their mind. It’s like, “Oh, this guy’s familiar to me. I don’t know where I saw his stuff.” and it’s because you boosted and it is now simulating that referral effect. 

It’s always much stronger when someone refers you than your clients be like, “Who’s this Michelle girl walking around on the beach in this tropical sort of area? How is she gonna help me as an entrepreneur? What credibility does she have? What right does she have to be telling me what I should be doing and why is she asking me for money or asking to book a 15-minute call?” 

So the boosting works if you’re establishing credibility. So how do you establish that credibility? It’s with the industry leader or you demonstrating a result in a non-douchy way. You could do before and afters, which is what a lot of products do, but it should be conveying that you know what you’re talking about, that you’re with other people that you know your clients recognize, which the TikTok algorithm will pick up on.

Get that initial touch in. So when you’re boosting posts, you don’t even have to have a call to action at the end, which is kind of weird because people are gonna look you up. If you do a good video, they’re gonna click on your profile on the right side, click on navigation and they’re going to want to see what your business is up to.

TikTok Lead Ad

So if you have multiple boosts, people feel like they’re friends with you, then you can do a TikTok lead ad and a lead ad is how you’re able to collect those information– phone, email address to then be able to book.

So the lead gen is more effective when you’ve had a couple of exposures. If you’re trying to drive leads off of a cold audience, it’s just much harder and your stats get penalized for that.

Then you run lead ads either against that audience or run on target. You don’t even need to run custom audiences against people that have seen your videos or people that have been to your website or people that are on your email list. You can do that if your custom audiences are big enough. TikTok is so smart, they’re naturally going to find people who have engaged with your content already. So it’s like retargeting’s already built in. 

So when you’re doing lead ads or you’re doing website conversion, or you’re doing website clicks as your objective, those are the three things we like to use for conversion. 

Cost of doing TikTok Ad

It is true that on TikTok it’s $20 a day right now if you’re doing stuff like minimum and it’s not like Facebook which allows $5 or a dollar a day depending on the objective. So you do have to spend a little bit more. The reason TikTok does that is that they know that if you’re not spending enough money to get 50 conversions per ad set per week, there’s just not enough data for the system to be able to optimize, even though the system is smarter at optimizing. 

So instead of boosting from the page, just go in and create a video view campaign and spend 20 bucks a day on three videos.

Do you find that in the beginning, the costs are way higher and then as the algorithm functions, it is said to lower the cost?

This is true on Google, Facebook, and TikTok, and it’s generally true for advertising.

Initially, your performance isn’t as good because they don’t really know who your audience is. They don’t know who’s resonating. They need to find people who fill out the form and once they get five or 10 and that’s why they want you to spend a little bit more to speed up that learning phase. So it’s not like they instantly know who the right people are because they need to collect data too. 

Just like with Facebook and Google and all these other networks, run your ads for at least a week. 


You only retarget if you have a large audience. Large as in more than a few thousand. Retargeting has worked super well, especially on Google and Facebook because when someone comes to your website and they don’t fill out the form or they abandon, or they add the cart, but they don’t buy, obviously retargeting is chasing people around the internet who didn’t finish doing the thing you want them to do. That’s the definition of retargeting. 

Omnichannel retargeting is you have all the pixels firing, so you’re like the ultimate parasite. So you have the Facebook Pixel, TikTok, Twitter, LinkedIn Pixel, and TikTok pixel, all chasing people around over the next couple of days. 

Interested to learn more about how exactly Dennis Yu and the team of Content Factory use Facebook targeting for PR, media inception, retargeting, and building a brand. Get behind-the-scenes access via this Episode on How To Be a Facebook Targeting Ninja


But if your audience is small and you don’t have a lot of people on your list, and you only have a few people coming to the website and you have only a few people that are watching your video views, which you can natively retarget, then retargeting doesn’t do any good because it’s too small of an audience.

And if your audience is really small, then there’s just nothing to work with. Like really small audiences. Your CPM goes way up. The networks are all not just TikTok, they’re all discouraging you from running really small audiences. It also creates cost on the system because every impression is a unique auction. So if you add another item available in the auction, that’s more processing load on their server. So they wanna discourage you from doing that. It was way too narrow and then it was up to like 50 million and it goes ideal targeting or whatever the term was. But be careful, I wouldn’t always go by what the robot says. 

Campaign Objective Seeking

Here’s something that everyone needs to understand and almost nobody gets. For some reason it used to be when you do a media buy, you will say, “I’m gonna target everybody in Chicago for all the entrepreneurs that are over 25 years old and drive a Volvo.” And it was all about the reach. To be able to reach all those particular people and coming from TV and radio and direct mail where you actually could reach those audiences. You had penetration and GRPs and Nielsen rating points and all that kind of stuff from old media. 

But what happened in the last five years that was mostly pioneered by Facebook, but then Google and TikTok came in and took it to another level by introducing the idea of campaign objective-seeking. The systems have gotten so smart. If you are driving sales through online marketing, trackable through a pixel and you’re getting couple dozen per week, you can run untargeted. You do zero targeting because the objective seeking is saying, “I wanna get leads at less than $50. I wanna get ROAs of at least 400%. I want to get this particular result”, the system will go, look at the pond and the system will already know where all the fish are. The system will just fish.

 So it used to be that way back in the day, the algorithm was so dumb, you had to tell it exactly where to go because otherwise, it would just burn impressions on random stuff. So if you advertise on Twitter and LinkedIn, those algorithms are so dumb, they will just burn your money with no regard for your cost per lead costs, ROI sales, no conversion consideration at all. But Google, Facebook, and TikTok are the three that are so smart you don’t even need to target them anymore.

So then a lot of people are gonna misinterpret what I just said and say, “Well, Dennis says that we just need to run something against the whole world and I should just automatically get sales.” But NO. I said if you were feeding the signal so that they understand what is a fish. Instead of an old rubber boot finding those fish for you, you have to have already caught a couple of fish yourself. Then you don’t have to target anymore. 

Digital Plumbing

Another way to look at it is, if you don’t have a solid strategy, advertising’s not gonna solve your problem. In other words, if you’re not already driving sales where you have customers that love you, not a ton of them, but just enough where it’s showing up inside your conversion tracking and that’s why we have this whole chapter inside a course on Digital Plumbing.

And a lot of people are like, What is this digital plumbing? I just wanna come in and start creating TikTok ads. Well, if you don’t have any tracking, how is the system gonna be able to learn and get you more of what’s working for you? 

I know tens of thousands of people on Facebook or Google that thought they were gonna do the same thing too. Forget all the tracking and just going to start making ads believing they can do all this targeting. Wrong, wrong, wrong, wrong, wrong. The algorithm now is so smart. 

Want to learn Digital Plumbing and how it works fully? Here is the Digital Plumbing Course that will teach you not only to track your website and all your data across all your channels. Not just pixels, but emails, custom audiences of all sorts, URL parameters, and so forth.

The XYZ Model

We have to have a clear MVP–minimum viable product and customers that love us and it have to be, “I solve a very particular pro problem for a particular audience via a particular technique”. That’s the XYZ model. 

What does that have to do with TikTok ads? 

Because if we don’t have clarity on that, the system can’t get us more of what we want. That’s like hoping that TikTok is this magic genie and you don’t even say what you want or a psychic, and the psychic somehow just knows what you want.

You have to have that clarity. When you have that clarity and your business is just dependent on advertising. Your business should be generating these people, and you have to have these people that are talking about why they like your product or service, then advertising gets you more.

Why? Because you have your conversion tracking in place and it can see what you want. 

Conversion Tracking

What you want to do is you’re feeding in all the conversion tracking pieces.  Upload custom audiences. That’s what remarketing is. It’s to feed, and educate the algorithm, not so they can find more people as opposed to, “I’m just trying to retarget people that have been on my website in the last 24 hours.”

 Yes, that is part of retargeting but the bigger part of retargeting is I’m trying to educate the machine. The machine does the targeting for me. This whole system is designed around feeding the algorithm so it can do all the work for us. The system’s so smart, it’s doing 95% of the workforce. So all the stuff with  optimization and changing budgets and creating new assets and like how many campaigns should I run and what percent should I spend on this. That doesn’t even matter anymore. The system handles all that for us. But we need to tell the system what’s converting. We need to tell them what a conversion is worth. The system is not gonna know. You got to tell it. So that’s where manual bidding comes in.

Manual Bidding

Initially, you have automatic bidding where you just go ahead for the lowest cost. By default, just give me something, and let’s see what it costs. And then you might say, “Well actually that cost is low. These leads are so good. I’m willing to pay twice as much.”

Resharing to other Social Media Channels

Generally, you don’t wanna reshare. All of them have basically said, “Don’t do that”. They don’t want you to upload stuff from competitors. Do you really think they wanna be promoting that? That’s why we’re trying to promote going native, uploading it right there, or making it right there inside their editor.

Right now, there’s not that much of a penalty for uploading content, but once this thing gets more competitive, you bet there will be. 

What’s working for your lead ads on Facebook, copy it to TikTok and generally, you’ll find more performance but you have to make sure that as long as your video adapts well, like with Facebook lead ads, it’s not so stringent. So Facebook lead ads and TikTok lead ads are the same things. They literally copied each other. 

Tag Manager

The whole point of tag manager is its the one tag that rules them all and the container–the tag manager container that has all the different tags and therefore you control what data are being passed.

So it’s just better to have all the rules inside Tag Manager.

For people who just are scared of Tag Manager, and don’t wanna use Tag Manager. There is really a lot of value in centralizing data and Tag Manager, not just because you have this double-firing issue.

 I’ve seen a lot of companies, this is not theoretical, I’ve seen it plenty of times where they double fire, where someone manually put in the conversion pixel and then set up tag manager, but then on some pages, they forgot to remove it so it was double firing. So then they thought they were getting twice as many conversions as they were actually getting. How sad is that? Can you imagine the feeling when you think you’re winning and then you find out that you’re not?

The Risk

If you running video views as an objective is TikTok will find the people that will watch your videos, but they may be people who would never buy your stuff. So just be careful about that. 

Video View Campaign vs Lead Ads

I don’t recommend a video views campaign because on the internet you have a lot of people that just sit there and watch videos and TikTok is gonna find them and a lot of those people would never buy anything. And it doesn’t matter how good your offer is or how you arrange the video or what your call to action is, some people are just never gonna buy anything so run Lead Ads, Lead ads are where you’re gonna spend the most money, but use these other videos that are boosted posts just to kind of get a sense of what content’s resonating, not whether it’s gonna convert or not. Especially the hook. Because if you don’t capture their attention in the first two seconds, it doesn’t matter what your offer. 

The Offer

All these internet people say, “Oh, it’s your offer. The offer is the most important” but if you don’t have a good hook, they’re never gonna see your offer.

Components of what to post

  • To edit or not to edit? Sometimes unedited is better. You know, it’s like raw food is sometimes better than cooked food. 
  • How Frequent should you post? You can post stuff to TikTok all day long. It’s kind of like Twitter. Some people will say try to space it out and have only whatever, one or two per day. But I’ve talked to other people who are on TikTok and it doesn’t hurt you. 
  • For the above video sample, that just needs a little bit more because they see these kids that are learning and there should be more information like, “What is it about dogs and birds? Is it a program? How do they find out more? Who are you? You appear to be the kind of teacher, the mentor here to these kids. 

It just needs a little bit more information on context because you got their attention, you showed that there’s some kind of program that you’re teaching and now you just need a call to action at the end

  • Call to Action at the end
  • Have a good hook
  • Show people results

Now the key with TikTok and social media, in general, is you wanna show people actually doing what it is that you want them to do. So make sure that you are not just talking about the program but showing people the results.

So the above process I just showed you of taking raw video and turning it into a TikTok, this happens after you learn how this is a layering, this happens after you tell your story or someone else tells your story. The three parts: 

  1. You have a hook to get their attention. 
  2. You explain the issue or problem that you solve
  3. You have a call to action at the end

 Those can be three different scenes. Those can be multiple scenes. It can be one scene where you’re just voicing over it because you can literally take a video of you doing something and you can add a voice-over to it. So all this stuff is kind of lightweight video production.


Is there a difference in the platform between uploading through the phone and the website?

You can do either. The website is where you’re gonna play around in Ads Manager, so that’s when you configure things and add other sorts of effects that maybe you’re more comfortable with that are outside the ads manager or outside the native video editor. 

Just remember, don’t just re-upload as TikTok has said that they’re gonna penalize people that are just re-uploading videos from other channels.

Want to learn more about how Tiktok Works? Here is the Tiktok Ad Course that will teach you much more. 

Dennis Yu
Dennis Yu
Dennis Yu is co-author of the #1 best-selling book on Amazon in social media, The Definitive Guide to TikTok Ads.  He has spent a billion dollars on Facebook ads across his agencies and agencies he advises. Mr. Yu is the "million jobs" guy-- on a mission to create one million jobs via hands-on social media training, partnering with universities and professional organizations.You can find him quoted in major publications and on television such as CNN, the Wall Street Journal, Washington Post, NPR, and LA Times. Clients have included Nike, Red Bull, the Golden State Warriors, Ashley Furniture, Quiznos-- down to local service businesses like real estate agents and dentists. He's spoken at over 750 conferences in 20 countries, having flown over 6 million miles in the last 30 years to train up young adults and business owners. He speaks for free as long as the organization believes in the job-creation mission and covers business class travel.You can find him hiking tall mountains, eating chicken wings, and taking Kaqun oxygen baths-- likely in a city near you.