Unlock the Secret to High ROI: Why TikTok Ads Are Dominating the Market

A recent Dentsu study, in partnership with TikTok, reveals that advertisers on the platform achieve remarkable returns on investment (ROI) for both short-term and long-term sales. The analysis focused on 15 brands across Norway, Denmark, Sweden, and Finland, comparing TikTok’s performance with other media channels.

Key Findings

Dentsu's findings highlight TikTok's impressive short-term ROI of 11.8, making it one of the most effective media channels for driving immediate sales. This translates to nearly 12 times the initial investment in sales revenue within just six weeks. In contrast, the average short-term ROI across all media is 8.7.

Additional insights from the Dentsu study include:

• 75% of advertisers found TikTok provided the highest ROI compared to other channels.
• All advertisers reported a substantial boost in short-term sales from TikTok.
• The best short-term results are achieved by combining lower-funnel platforms with TikTok.
• TikTok’s sales impact can last 3 to 4 weeks after a campaign ends.
• Advertisers who maintained active presence on TikTok enjoyed the best ROI.
• User-generated content (UGC) featuring creators had the strongest sales impact.

Long-Term Impact

In addition to the impressive 11.8 ROI in the first six weeks, a 4.5 ROI is observed within 10 months post-exposure. This indicates that TikTok serves as both a performance channel for immediate results and a tool for building brand equity over the long term.

The Power of Storytelling Ads

The study analyzed two main types of UGC:

• Storytelling UGC: Narrative-focused content without direct promotional offers.
• Tactical UGC: Content centered on pricing or direct product promotions.

Dentsu found that storytelling UGC drives stronger sales results, generating 70% higher ROI than tactical promotions due to better audience engagement and recall.

Methodology

Dentsu employed a three-step approach to measure TikTok’s impact:

1. Short-Term Sales: Tracking direct revenue within 6 weeks of ads running while filtering out other market factors.
2. Brand Metrics: Measuring how TikTok advertising shifted consumer perceptions.
3. Long-Term Sales: Connecting brand perception changes to additional sales 1-10 months later.

The study analyzed actual spending and sales data from 15 Nordic brands over 2-3 years, isolating TikTok’s contribution from external factors like seasonality and competition.