How to measure TikTok Ads with Media Mix Modeling (MMM)?

TikTok has emerged as a powerhouse, captivating millions with its scroll-friendly design and bite-sized content. However, with its unique user engagement patterns, measuring the success of advertising campaigns on this platform isn't as straightforward as end-of-the-funnel digital mediums. Brands, especially those in the eCommerce and DTC sectors, find themselves grappling with traditional metrics that might not paint the full picture. In this blog post, we'll delve deep into the challenges of measuring TikTok ads and explore how Media Mix Modeling (MMM) can offer a more holistic and accurate approach to understanding your advertising impact.

Why It’s Hard to Measure TikTok effect on sales?

1. The Nature of TikTok Usage:

TikTok, with its dynamic and rapid content consumption style, stands apart from other platforms. While platforms like Facebook or Instagram may encourage users to delve deeper into a post or even visit a linked website, TikTok's essence is in the endless scroll. As users seamlessly transition from one video to the next, it becomes challenging to pin down a singular point of engagement. Traditional metrics like click-through rates (CTR) which often signify success on other platforms become less relevant in TikTok's fluid environment.

Moreover, the rapid consumption pattern means that even if a video resonates with a user, they might not necessarily pause or engage directly, instead opting to continue their scrolling journey. This makes it challenging for brands to accurately gauge the depth of engagement or interest based purely on standard metrics.

2. The Digital Advertising Norm:

The age-old metrics of digital advertising have, for the most part, been straightforward. Platforms such as Google or Facebook have conditioned brands to look for immediate gratification – a click, an app download, or a form submission. These immediate actions provide tangible data, enabling brands to easily link an advertisement to a direct result like a sale or a new subscription.

However, TikTok's ecosystem isn't necessarily built for such direct and instantaneous actions. While some ads might prompt a click or a swipe, the platform's design and user behavior don't align perfectly with these traditionally celebrated metrics. This discrepancy makes it harder for brands to rely solely on these familiar measurements to determine the success of their campaigns on TikTok.

3. Varied Brand Goals:

Different brands have distinct objectives when it comes to advertising. For app-centric businesses, the goal is often linear – get the user to download the app. This action is immediate, tangible, and easily measurable. A view directly translates into a potential download, making the advertising journey relatively uncomplicated.

In contrast, eCommerce or Direct-to-Consumer (DTC) brands often have a more nuanced journey mapped out. A user might view a product on TikTok, ponder over it, maybe even discuss it with friends or look for reviews, and only then make a purchase decision. This elongated path, with multiple touchpoints and considerations, makes it harder to attribute a sale directly to a singular TikTok ad view. The non-linearity of this journey poses challenges in crafting and measuring the effectiveness of advertising campaigns for such brands.

What Would Be a Better Metric than a Click?

2-Second Video Views:

TikTok users are accustomed to a continuous scroll, even a pause of a few seconds is noteworthy. The mere act of a user halting their scroll to engage with your content, even briefly, indicates a spark of interest. Capturing this fleeting moment of attention is what the 2-second video view metric is all about. While it may seem short-lived, it's a significant deviation from the habitual scroll and provides advertisers a glimpse into the content's initial pull factor. For brands, understanding and optimizing for these brief moments of connection can be the key to more effective advertising on TikTok.

6-Second Video Views:

Beyond the initial pull lies the challenge of sustained engagement. If a 2-second view signifies a user's passing interest, a 6-second view is a testament to deeper engagement and likely comprehension. Users lingering for 6 seconds or more aren't merely stopping their scroll but are genuinely consuming and internalizing the content presented to them. This duration allows for a more substantial connection, possibly giving users enough time to understand the message, resonate with the story, or even be intrigued by the product or service. As a metric, 6-second video views serve as a potent indicator of content that not only attracts but also resonates, making it invaluable for brands aiming for more profound connections with their audience.

Media Mix Modeling (MMM) as a Measurement Methodology

What is MMM?:

Media Mix Modeling, commonly known as MMM, emerges as an advanced analytical tool amidst the expansive world of marketing metrics. Rather than adopting a simplistic view of the marketing landscape, MMM employs statistical analysis to measure the weightage and influence of different media channels on specified outcomes—whether that's sales, brand recognition, or other pivotal benchmarks. By considering both marketing stimuli (like ads or promotions) and external factors (such as economic conditions), MMM provides a comprehensive lens, offering a detailed understanding of what truly drives consumer behavior.

The depth of MMM lies in its multifunctional approach. Each function is tailored to decode different facets of a brand's marketing strategy, ensuring a well-rounded view. Below is a table that delves into some of these functions and their respective roles:

Advantages of Using MMM for TikTok

We can universally agree that platforms like TikTok defy traditional measurement norms. While models like last-click attribution lean heavily on the final interaction leading to a conversion, they often neglect the collective impact of multiple engagements on a user's journey. MMM, with its holistic approach, is particularly suited for platforms like TikTok. By evenly distributing attribution across numerous touchpoints, MMM recognizes the value of every interaction, no matter how transient. In TikTok's bustling environment characterized by quick content shifts and layered user engagements, MMM's capabilities shine, offering brands a refined tool to truly grasp their advertising resonance.

Modern MMM Solutions Bring Deeper Insights

The main benefits of MMM lies in its holistic, dynamic, and data-rich methodology, offering brands an unparalleled depth of insight, especially when navigating platforms as nuanced as TikTok. Given the structure and versatility of TikTok's advertising model, MMM becomes an even more valuable tool for performance marketing.

Campaign Objectives and MMM Synergy:

TikTok ads are distinctly designed around campaign objectives, ensuring each ad resonates with its intended purpose. These objectives can range from fostering awareness to spurring conversions.

• Awareness Objective: By focusing on reach as the key metric, the goal here is to maximize impressions within the targeted audience. For MMM, this objective can be gauged by how effectively awareness translates into recall or a top-of-mind brand presence.
• Consideration Objectives: These are more nuanced, aiming to drive traffic or maximize video views. Whether it's funneling users to a website or ensuring video content engagement, MMM can precisely measure these subtler interactions and the journey from mere interest to active consideration.
• Conversion Objectives: These ads are the heavy lifters. Be it driving sales, generating leads, promoting apps, or encouraging website conversions, MMM deciphers the ad's direct and indirect impact on these outcomes, offering brands a clear understanding of conversion pathways.

Campaign on objectives and MMM:

MMM platforms like Sellforte will not just report the ad platform-driven sales on Social media ROI or TikTok level ROI, but it can delve deeper into the campaign objective level and distinguish how effective different campaign objectives are.

Bidding Strategies Analyzed Through MMM:

By distinguishing between Cost Cap (goal-based) and Lowest Cost (spend-based) bidding strategies, TikTok offers brands the flexibility to align their spending patterns with their core objectives. MMM seamlessly integrates this data, showcasing how each bidding strategy impacts overall campaign performance, enabling brands to iterate and refine their bidding approaches based on actionable insights.

Cost Cap Strategy:

Cost Cap provides advertisers a target cost per result, steering the system towards achieving an average cost close to this figure. However, it's worth noting that the actual cost per result might oscillate, sometimes being higher or lower than the set bid.

• Supported Objectives: This strategy primarily backs objectives like App Installs, Conversions, and Lead Generation. Additionally, Cost Cap emerges as the default bidding route for the reach and video view objectives, supplemented by a suggested bid and reach estimator. This estimator aids advertisers in discerning the influence of the bid in question.
• Bidding Nuances: Cost Cap becomes accessible for Conversions campaigns exclusively when the Optimization Goal zeroes in on Conversion.
• Billing Events: A range of billing events, including Optimized Cost per Mille (oCPM), Cost per Click (CPC), Cost per Mille (CPM), and Cost per View (CPV), are compatible with the Cost Cap strategy.

Lowest Cost Strategy:

Lowest Cost adopts a spend-centric stance. Instead of setting a bid, the system leverages the ad group's budget to churn out maximum results at the minimum feasible cost per result.

• Budget Considerations: An essential facet of the Lowest Cost strategy is its exclusive alignment with Daily Budget campaigns, excluding Lifetime Budget campaigns.
• Supported Objectives: This strategy casts a wider net, encompassing Traffic, Reach, Video Views, App Installs, Conversions, Lead Generation, and Catalog Sales objectives. For advertisers inclined towards using this strategy for the Reach and Video View objectives, the route is straightforward: omit the suggested bid.
• Billing Events: Billing events supporting this strategy span CPC, CPM, CPV, and oCPM. A noteworthy highlight is the inherent design of the Lowest Cost strategy; there's no mandate to input a bid. The core aim revolves around optimizing results vis-a-vis the ad group's allocated budget.

Integration with MMM:

MMM can assimilate this data. By doing so, it shows how each bidding strategy, with its unique characteristics and objectives, influences the overarching campaign performance. This symbiotic relationship between TikTok's bidding mechanics and MMM provides brands with a profound, actionable spectrum of insights, empowering them to refine and iterate their strategies continuously. This ensures not just efficient spend, but also an enhanced alignment with the brand's core objectives.

Granularity with Ad Groups in MMM:

At its core, TikTok's ad structure is hierarchical, encompassing campaigns, ad groups, and individual ads. Ad groups serve as the bridge, allowing marketers to refine placements, select creative types, pinpoint target audiences, and choose bidding methods. MMM thrives on such granularity, diving deep into each ad group's contribution to the overarching campaign goal.

Moreover, with everything housed within an interactive dashboard, MMM on TikTok offers brands a real-time, responsive environment. Instead of toggling between platforms or combing through fragmented data, marketers can witness the symphony of their campaigns in action. From visualizing potential future scenarios to identifying immediate optimization avenues, the dashboard becomes a dynamic workspace.

MMM’s analytical capabilities align seamlessly with TikTok's structured advertising model. The result? A comprehensive, actionable, and dynamic view of performance marketing, ensuring campaigns aren't just data-driven, but also insight-inspired.

Typical Change that MMM Brings Compared to Last-Click Attribution

Holistic View of Marketing Impact:

The primary difference between MMM and last-click attribution is the depth of analysis. Last-click attribution operates on a rather linear principle, funneling the entirety of conversion value to the immediate, preceding interaction. This methodology, while straightforward, often bypasses the multifaceted journey a consumer might traverse before reaching a decision. It tends to undervalue or even outright ignore the compounded influence of previous interactions, be it an inspiring blog post, a persuasive video ad, or a powerful word-of-mouth recommendation. Each of these touchpoints, while not the 'last-click,' undeniably contributes to shaping the consumer's perception and eventual action.

Conversely, MMM offers a more intricate, layered analysis. Instead of a tunnel vision focus on the final touchpoint, MMM paints a broad picture, encapsulating the entire marketing ecosystem. By concurrently evaluating every marketing channel, it uncovers the complex interplay of influences that drive a consumer's journey. Such an analysis might reveal, for example, how a TV advertisement might boost search traffic or how social media engagement might heighten the effectiveness of email campaigns. The result is a rich, multifaceted understanding of how various channels interrelate, compete, or enhance each other, granting brands an unparalleled depth of insight into the nuances of their marketing strategies.

Optimized Budget Allocation:

Traditional methods, like the last-click attribution, can inadvertently skew budgets towards channels that consistently serve as the final touchpoint, even if their overall influence on the consumer journey is minimal. Such an approach might lead brands to disproportionately funnel funds into platforms offering immediate conversions, neglecting those playing a vital, albeit less direct, role in shaping consumer decisions.

With MMM, the narrative shifts. By providing a granular breakdown of the influence wielded by each channel, brands can discern not just the obvious front-runners but also the silent contributors that might be shaping the early or mid stages of the consumer journey. This comprehensive view allows marketers to identify channels that, while not always culminating in a direct sale, might be instrumental in brand building, awareness, or initial consideration phases.

Furthermore, MMM helps pinpoint areas of diminishing returns, ensuring brands can redirect investments from saturated channels to those with untapped potential. In this dynamic, ever-evolving marketing landscape, MMM's data-centric approach equips brands with the insight to distribute their budget in a manner that harnesses the strengths of each channel, ensuring a harmonized, high-yield marketing orchestra.

Conclusion

In the fast-paced digital age, where myriad platforms and channels vie for consumer attention, discerning the efficacy of marketing efforts has become both paramount and perplexing. Traditional models, such as last-click attribution, though straightforward, fall short in capturing the multifaceted nature of today's consumer journey. This is where MMM steps in, presenting a holistic and nuanced approach to understand and quantify marketing impacts.

As brands strive to optimize their strategies and budgets in an increasingly complex landscape, tools like MMM are indispensable. They not only elucidate the immediate effects of a marketing strategy but also illuminate its long-term impacts, ripple effects, and intertwined influences across channels. As platforms like TikTok reshape the ways consumers engage with content, marketers armed with MMM insights are better poised to adapt, innovate, and drive tangible results.

Key Takeaways:

1. Holistic Perspective: Unlike last-click attribution, which focuses narrowly on the final interaction, MMM offers a panoramic view, capturing the entire spectrum of marketing influences and their intricate interplays.
2. Beyond Immediate Metrics: MMM goes deeper than surface-level metrics like clicks, delving into long-term effects such as brand awareness, sentiment, and recall, which are crucial in platforms like TikTok where storytelling and presence play pivotal roles.
3. Strategic Budget Allocation: Armed with insights from MMM, brands can prudently distribute their marketing budgets, harnessing the strengths of each channel, avoiding areas of diminishing returns, and capitalizing on untapped potential.

In the end, the choice of a measurement model should not just be about numbers and data but about capturing the true essence of consumer engagement and translating it into actionable insights for sustainable growth.

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