Bid assignment strategies are indispensable for the promotion of various products. In this way, new products, brands and other content that is otherwise unrecognizable are demonstrated. With regard to TikTok, the development of advertising products takes into account the needs of users and helps to familiarize the audience with current innovations.
Only two strategies are appropriate for TikTok – cost containment and maximizing return. Both methodologies seem to be similar, however, when you look at them in detail, the differences are noticeable. We recommend studying Cost Cap and Maximum Delivery in detail – such knowledge will help you choose the right product and use it as effectively as possible.
So, let’s find out what types of bid strategies are suitable for your TikTok development.
Two types of betting strategies for TikTok
As mentioned above, we will be looking at 2 strategies here – Cost Cap and Maximize Return.
Cost Cap
Assigning bids with a cost cap allows you to optimize the cost of the advertising campaign and run it as efficiently as possible. The purpose of the method is to control the average price for the result obtained at the advertising auction.
When using the Cost Cap bidding strategy, TikTok will try to average the cost of advertising per result and keep the effectiveness of your account feed. That is, the price of each conversion may exceed the planned bid, but will eventually level off to an average.
This method is positioned to hold costs constant regardless of market conditions. How it works: the platform assigns a bid tied to the probability of conversion and does not spend your budget on a daily basis. For example, if productivity drops today, costs will go down. Accordingly, if performance increases, spending will go up.
Actually setting up budget spending for Cost Cap involves setting a maximum limit on the amount you are willing to pay per conversion. You can also set ROAS (return on investment in advertising) to the lowest limit that is acceptable to you. As a result, TikTok is careful about spending your advertising budget in the auction during the bidding process.
When using this strategy, it is advisable to allow 50 times your budget relative to the maximum bid. This point may seem complicated, but most advertisers use it quite successfully. The fact is that the platform TikTok will be as lenient as possible when bidding on the auction only if this condition is met: the budget is 50 times higher than the bid.
Alternatively, you can try to squeeze the budget and audience to reduce costs. That is, the costs are limited to the level of the daily budget and make the bid exceeds 5 times. Such a step of dividing and reducing advertising investments is better to coordinate with TikTok, but it is important to understand: the advertising campaign may not achieve all the desired goals.
Maximum Delivery
Unlike a cost containment strategy, maximum performance is not based on costs. The emphasis here is on results, regardless of the budget spent. That is, you cannot limit the rate. TikTok will invest money in advertising to improve performance, conduct the maximum number of actions to achieve your goals.
Accordingly, the platform will not notice a decrease in your activity on a particular day and will continue to spend your budget. Compared to Cost Cap, the overall spend will be about the same. However, the costs on some days will be higher than in a rate cap strategy. It’s worth noting that with a lifetime budget, the maximum rate is not used – it’s only available with a daily budget.
Maximum Delivery is great for achieving one specific goal for an ad campaign. That is, you can set the maximum return for a specific ad. How to do this: in the bids section, do not fill in the “Bid Limit”, “Cost Limit”, “Target Price per Conversion” fields. As a result, these ads will start running at the default maximum return.
In maximum return, TikTok recommends setting a budget with a cost-per-conversion cost of 50 conversions daily. Such costs may seem high, but it is this algorithm that allows you to run your ad campaign with maximum efficiency.
If you want to increase the scale of investments in advertising, because you have already felt the effect of Maximum Delivery, then act according to the strategy. The platform claims to be able to change the budget rate per day up to 50% without performance bugs. After that, you should expect to get 50 conversions or skip 1 day, and you can repeat the budget change again.
We recommend sticking to the 20% budget increase rate offered by Meta Ads. And at the same time combine TikTok and Facebook ads. This way, you can analyze the CPA fluctuations and not risk a 50% increase right away.
Conclusion
With only two bidding strategies on the TikTok platform, advertisers can figure out the settings and test both methods on their own.
In the topic of target ROI, it is better to choose the method of cost limitation, for the scalability of the project, maximum performance is suitable. We have carefully described the features of both strategies. We hope that you will successfully master this information and apply it in practice.
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