Tag Archive for: paid acquisition

two women scrolling on TikTok

TikTok Ads for Startups: How Multiverse Drives Quality Conversions at Scale (with a CPA lower than any other channel)

two women scrolling on TikTok

When it comes to driving more traffic and applications online with growth marketing, the big challenge is how to scale and which marketing channels will help you grow fastest. With limited time, money, and people, you can’t afford to waste it on strategies and tactics that are sub-optimal. 

When we first partnered with Multiverse (a start-up company that provides an outstanding alternative to college through corporate training and professional apprenticeships) as their startup marketing agency, we wanted to test different campaigns with clear metrics to figure out which ones work and then focus on scaling those channels.

In this post, I’m going to focus in our our paid social strategy, with a focus on a deep dive on TikTok ads. We’ll look at why we selected TiKTok ads, the campaign structure, the best performing creative assets, and the results compared to other channels in our mix. (Spoiler: TikTok generated 3x times more applications than Instagram with a 52% lower CPA.) 

Diversified Channel Mix 

In our growth marketing strategy for Multiverse, we prioritized testing campaigns with social ads and PPC. 

For social ads, we focused on Instagram as the primary channel where we allocated 67% of our total budget and then we dedicated a portion of the total budget (33%) to testing other social ad channels. With the Multiverse target audience being between the ages of 18-26, we were super eager to test TikTok to see if this channel would be effective in driving applications and if effective, if it would be scalable. 

Clearly Defined CPA Targets and Goals 

Our goal for Multiverse was to prioritize high-impact growth campaigns to quickly drive key learnings, then invest in additional campaigns to scale up on what works. Since Multiverse didn’t have a ton of historical data in the US for us to learn from, we did some research on competitors and the average costs for TikTok ads and Instagram ads to come up with our KPI goals. 

Instagram KPI goals (for the first month): 

  • Cost-per-click: $3.00
  • Cost-per-application (CPA): $65

TikTok KPI goals (for the first month): 

  • Cost-per-click: $2.00 
  • Cost-per-application (CPA): $80 

Identifying the Target Audience & Funnel Stage 

When launching campaigns for a new partner, our social ads team at Tuff will put together an audience targeting strategy for each stage of the audience funnel. However, since we were starting from scratch and building campaigns on new platforms for Multiverse, we knew we needed to focus on the top of funnel audiences since we haven’t built up the brand recognition or audience size to retarget users based on previous ad interactions through bottom-funnel audiences. 

For TikTok, our primary focus was targeting a large, top of funnel audience that we could then educate and convert to applicants through our video creative. 

A Campaign Structure for Scale 

For Multiverse’s US paid acquisition, we were focused on six markets, including New York City, San Francisco, Seattle, Atlanta, Phoenix and Boston. We knew we needed to drive as many applicants on TikTok as possible in each market, so we set up a prospecting campaign for each location, that way we could control the budget at the campaign level based on demand needs per market. 

Within each campaign, we wanted to test two different audiences on TikTok: 

  1. A broad audience with no interest targeting, ages 18-26 
  2. Education or motivation interest targeting, ages 18-26

After a few weeks of testing, we saw that the broad targeting was outperforming our interest-based targeting with a lower cost per application. Compared to other social ad platforms,  the TikTok algorithm is extremely accurate in serving your ads to your target audience (just think about how it perfectly curates a For You Page that’s specific to each TikTok users’ interest). So removing the interest targeting allowed us to widen our audience pool and let TikTok do the work of finding the users who were likely to apply for a Multiverse application based on the algorithm data.  

High-Peforming TiKTok Ad Creative 

When it comes to TikTok creative, videos that feature trending and relevant content are the key to success (check out our tips for creating trending video content). For Multiverse, we wanted to move QUICK, which meant that we needed to develop 3-5 TikTok videos fast to be able to launch on TikTok. 

For the creative, we wanted to lean into the Multiverse value props to educate our top-of-funnel audiences about Multiverse in a fun, trending and captivating way. 

Check ‘em out!

  1. Job without degree
  2. College vs. Apprenticeship 
  3. Student Loan Stress

Results

So how did these TikTok campaigns perform? The short answer: we far surpassed our goals for applications and cost-per-application which allowed us to scale the monthly budget on this channel by 5x. 

  • Average cost-per-click (CPC): $0.47
  • Applications: 357
  • Average cost-per-application (CPA): $16.77

But how does this compare to the other paid channels (like Instagram)?

Channel CPC Applications CPA
TikTok $0.47 357 $16.77
Instagram $2.24 164 $34.71

TikTok generated 3x times more applications than Instagram with a 52% lower CPA. 

For Multiverse, we measure apprenticeship applications based on last-click attribution in Google Analytics, so while these results far exceeded our expectations, we also wanted to see how our campaigns have helped increase non-last click conversions. 

Since launching TikTok ads, we’ve seen a 110% increase in Multiverse Google Search branded conversions in the US. 🚀

Based on these learnings, we’ve continued to scale our TikTok campaigns and have found it to be the most cost-efficient paid channel driving the lowest CPA for Multiverse in both the US and UK. 

Are you interested in launching TikTok ads to help grow your business? Let’s chat! 

Zeroing In On Your Channel Mix: Channel Diversification Cheat Sheet

Zeroing in on your channel mix—in other words, how you make people aware of you or get traffic to your website—has always been a critical component of growth. It’s essentially the first half of the growth equation. 

Half one: make people aware of you.

Half two: implement tactics to get them to do something. 

So, put that way, if you can’t get in front of your target audience, you’re going to seriously struggle to grow your business in any meaningful way. 

That’s why finding the right combination of acquisition channels for your business is so critical. It’s also really hard. It’s also, also why so many companies are focused on diversifying their channel mix in order to find new pockets, outside of Facebook and Google, to scale their acquisition efforts. 

When it comes to determining what channels to test and what budget to allocate, it’s a balance. You can’t afford (and don’t want to) spread your resources across every single channel that exists. You’ll end up with sloppy execution and merky data. You also can’t afford to not test new channels. You’ll end up with all your eggs in one basket and run the risk of being beholden to a single channel and the big shifts that channel implements (looking at you iOS 14). 

So what do you do? 

As a growth marketing agency, we’re constantly looking for ways to solve this challenge for our partners. At any given time, almost 30% of the spend under management at Tuff is being allocated to what we would call “emerging growth channels.” In this post, we’re going to break down what we’ve learned and which channels are currently our favorites. 

What are acquisition channels?

If you jump into any Google Analytics account, you’ll find a mix of traffic coming from five core sources. These include: 

  1. Paid 
  2. Organic 
  3. Email 
  4. Direct 
  5. Referral 

A paid acquisition channel is a place where a potential customer finds out about your company—think LinkedIn, Google Search, Facebook, etc. They are diverse and plenty, with cost per clicks (CPCs) ranging from as low as $0.15 to as high as $30. Knowing your CPC is important. It’ll help you determine how much budget you actually need to test a new paid channel. 

When it comes to channel exploration, we like to get anywhere from 300-500 clicks per channel (or campaign) before reworking or determining results. For cheaper channels in specific industries, this could mean that $500 is enough to test a new channel but for others, you’ll want to have at least $5,000. 

What are the core acquisitions channels?

For the last 10+ years, the majority of paid spend has gone into the pocket of one of two core acquisition channels: 

  • Google (+Bing) 
  • Facebook/Instagram

In addition to being some of the most advanced advertising platforms, both Google and Facebook make sense for companies as acquisition channels because: 

  • They have huge audiences and advanced targeting options 
  • They are self-service platforms and make it easy for people to use 
  • They can be cost-effective 

That said, the majority of brands, at some point, will start to see diminishing returns on channels like Facebook and Google when they try to scale rapidly. Layer on the fact that the advertising landscape has (and will continue to) change. According to ProfitWell, customer acquisition costs have gone up by over 60% in the last 5 years, making channel diversification that much more important. 

What are the best emerging channels?

There are a number of emerging channels available for companies to leverage to find traction and scale outside of Facebook and Google. We’ve tested on all of the major channels and have some initial favorites so far in 2021: 

  • YouTube 
  • TikTok 
  • Snapchat 
  • Amazon 

YouTube

At Tuff, we’ve been running campaigns on YouTube for over three years. When we started on YouTube, at the most, 10% of our clients were experimenting on this channel. Today, almost 65% of our clients are running campaigns on this channel. 

YouTube is great because it’s a blend between Google and Facebook. With YouTube advertising, you can get extremely targeted and identify high-intent, niche keywords and audiences to segment. At the same time, it’s also extremely creative-forward and visual like Facebook. I like this combination because you get advanced targeting paired with video in a way you can’t on any other platform. 

When it comes to YouTube, we often use this as a top-of-the-funnel initiative. We use it to get as many quality eyeballs as possible on our videos and then implement tactics to move these users further down our funnel. That said, we also have clients that use YouTube extremely successfully as a last-click customer acquisition channel. 

Here are what the results can look like so you have context as you experiment or compare with existing campaigns. Take a look at a full spreadsheet from some of the YouTube campaigns in the Tuff MCC account. 

Here are some of the major YouTube tips: 

  • Consolidate your spend on geos: Chris, our YouTube expert, always talks about YouTube like a Billboards. With so much inventory available on YouTube, and attribution getting more difficult, if you consolidate your spend to specific geos it will be easier to see lift (or no lift) in revenue or conversions from YouTube. 
  • Leverage Retargeting: YouTube retargeting is significantly cheaper than other channels and you can retarget both site traffic and video views. 
  • Reduce CPC with Custom Intent: Build custom intent audiences using high CPC keywords instead of relying exclusively on search. Here’s a full blog post breaking down this exact strategy

We talk about YouTube a lot at Tuff and have a full playlist on the blog with YouTube campaign examples, data, and best practices. Check it out

TikTok

We get more inquiries and questions about TikTok from clients and prospects than any other channel combined. For the right audience, TikTok can be super cost-effective and drive a serious amount of traffic and revenue but it’s not for everyone. It also takes a slightly modified approach to get the right results. In other words, it’s far more finicky than on Facebook. Some of the things you’d do to set up your campaigns on Facebook and Instagram are completely different for TikTok. 

For successful results, here are some things to consider: 

  • Audience: For TikTok, based on what we’ve seen, you need to go broad with your audience. On other channels, like Facebook, it’s easy to get extremely granular and focus on an audience of 1M or fewer but on TikTok you need to expand. The algorithm is extremely sophisticated and the larger your audience, the better the results will be. For instance, the For You Page on TikTok knows exactly what type of content you’re interested in. The short story: trust that the algorithm will serve your ads to the users who would be interested in your ads.
  • Creative: You can’t even consider TikTok without video creative. Do you have really strong video assets and can you create new videos on a 3-4 week basis? If not, TikTok might not be for you. Layer on the fact that TikTok users have a super high BS-o-meter, and you’ll want to get super particular with what you publish. The good news: there’s tons of room to test and doing so doesn’t need to drain your bank account. We’re a performance-creative focused crew here at Tuff and have written a full blog post on this exact topic

If you want a deep dive on what to expect with TikTok, here’s a list of practical tips and recommendations for creating high-performing TikTok campaigns. 

Snapchat

The good news: if you’ve taken on the task of making creative for TikTok, you’re already most of the way towards firing up a Snapchat strategy as well. Unlike TikTok, Snapchat surprisingly has some amazingly sophisticated targeting options (which is not surprising when you find out they partner with Neilsen to make it happen). Ultimately, Snapchat is extremely dependent on native-looking and always-refreshing creative, but if you can crack that nut, you can quite possibly unlock a powerful acquisition channel. 

Amazon

When it comes to eCommerce growth, Amazon has been part of the conversation for a while now and for good reason. In 2020, Amazon advertising became the number three ad publisher in the United States, accounting for over $15.73 billion in ad revenue. It’s estimated that Amazon’s ad business is growing even more in 2021, with a projected ad revenue of over $20 billion (over 30% annual growth). 

While there are many pros and cons to selling on Amazon, having an effective Amazon advertising strategy is an essential part of a growth strategy for almost every single eCommerce brand. 

We get into a number of best practices and Amazon advertising tips in this post, but to highlight a few priorities: 

  • Split out branded and non-branded campaigns (just like you would do on Google!) 
  • Use automated targeting on Amazon ads to get better insights into your manual bid strategies 
  • Measure and correlate spikes in organic sales as you optimize you paid efforts 

It’s worth mentioning that there are other channels we are actively testing on that collectively make up about the same amount of spend as the channels above. These include: Reddit, Quora, Twitter, Spotify, LinkedIn, and Pinterest. It’s not to say that these channels aren’t the right ones for your business (if your target audience is actively there) but we haven’t seen as much scale on these platforms as we’d like. They can be great supporting channels but aren’t, at this point, going to be your hero channel. 

What about non-paid acquisition channels?

This post has focused primarily on diversifying your paid channel mix. And if you’re an early stage startup or in extreme scale mode, paid is where you are going to get the quickest result. But, I can’t stress enough the importance of organic acquisition. Being completely reliant on paid is something that you just can’t do. 

Unlike paid acquisition, organic traffic is going to bring you the best long-term, most compounding growth results if you have the right SEO strategy. It can take up to 12 months of work until you start seeing results but it’s arguably the best growth tactic you can implement for your business. Here’s an in-depth post on how we build a holistic SEO strategy to help businesses see more organic traction. 

My advice: Fill the gaps and find short-term momentum with paid acquisition until you are able to implement and see traction with organic acquisition.