TikTok Ad Revenue: What’s Important To Know (2026)

TikTok’s ad revenue continues to impress retailers and industry leaders alike. The social media platform started testing paid ads in 2019 and in 2020, TikTok’s global ad revenue hit $2 billion. In 2026, experts expect the social media giant to bring in $43.96 billion, an increase of nearly 2,100%.

TikTok ads are a bit different from the ads you might be used to seeing on other social media platforms. 

“TikTok ads really feel like part of the platform,” says growth strategy expert Jaclyn VanSloten, who runs the marketing firm Femra Consulting. “They’re very snappy; they don’t feel like they’re inserted. It just feels like a natural flow. More than any other platform, authenticity matters.”

Ahead, get insight into TikTok’s ad revenue, plus learn how much you can expect to pay (and earn) from your own TikTok ads, with tips from Jaclyn.

TikTok ad revenue growth trends

TikTok’s ad revenue has grown steadily over the years. Here’s a closer look, with data from Statista:

Much of this revenue comes from the United States: The US accounts for 40% of TikTok’s ad revenue, even though Americans make up only 10% of the platform’s userbase, according to Emarketer. This means that a potential US government ban on TikTok could significantly impact the platform’s ad revenue.

Even with the possibility of a US ban, marketers are pouring resources into the app. In 2025, more than half of the marketers planned to allocate over half their marketing budgets to TikTok, according to Statista. 

For marketers, TikTok boasts a highly engaged userbase. It’s the fifth most popular social media platform, but it ranks number one for engagement among rivals Instagram, Facebook, according to a 2025 report from RivalIQ. 

TikTok ad pricing

There are a number of ways to use TikTok as part of a paid advertising strategy, and different methods carry different costs. Although you can run a campaign for as little as $500 (the platform’s minimum spend requirement), you probably won’t be able to test different formats at this price point. Jaclyn recommends a starting budget of $1,500 to $3,000 for a 30-day test.

You’ll set up and monitor your ads through the TikTok Ads Manager platform available through your TikTok business account. The ultimate price of your TikTok ads will depend on a number of factors:

Ad format

TikTok offers a few different ad formats. Some are more expensive than others, but there’s no set price for each. That’s because the final price for a TikTok ad depends on a combination of factors including competition and bidding strategy.

Here are the different TikTok ad formats, with estimated pricing (where available) from Darkroom Agency:

• TopView
• In-feed
• Spark
• Branded mission
• Pulse

TopView

These full-screen ads are more expensive than other ad types. They show up immediately after a user opens the app for three seconds and cost between $10 and $20 for 1,000 impressions.

In-feed

In-feed video ads look like organic posts and show up in users’ feeds. They often include a call to action (CTA) in the caption and cost between $4 and $8 for 1,000 impressions.

Spark

Spark ads allow you to “boost” organic content, either from your own or other creators’ accounts, to get more views. Spark ads are more expensive than regular in-feed ads, at $5 and $10 per 1,000 impressions. “That content does perform really well, just because it feels a lot more organic,” says Jaclyn.

Branded mission

A branded mission lets you repurpose creator content into ads. You’ll receive a branded hashtag and informational page on your campaign, which creators can use to participate in your campaign.

Pulse

TikTok Pulse places your ads directly after viral content. Even though Pulse ads are more expensive, Jaclyn says they’re often worth it. 

“Advertisers have gotten a lot out of it, because [TikTok] has this virality element to it where these posts will just take off and get a ton of views,” Jaclyn says. 

“Your brand is next to culturally relevant, really high-performing content, so it has a bit of a higher brand lift and ad recall, because people are remembering it because it’s next to that content.” 

Targeting

You can target TikTok users based on demographic data or their activity on TikTok. You can also target users who’ve taken action on your ecommerce site by installing the TikTok app for Shopify. This lets you install the TikTok pixel, a line of code that tracks consumers who visit your website.

Here are TikTok’s targeted advertising options:

• Demographic targeting. This lets you target users based on their age, gender, location, language, spending power, or household income.

• Audience targeting. With audience targeting, you can segment users who have interacted with your brand on or off TikTok, e.g., visiting your website, engaging with your organic or paid TikTok content, submitting a lead generation form, using your app, or visiting your TikTok Shop.

• Advanced targeting. This targets users who’ve shown specific interests or behaviors on TikTok, such as those who’ve engaged with certain types of content (like fashion or makeup content) or shown purchase intent by researching a certain type of product.

• Smart targeting. This tool suggests which interests and behaviors to target and when to expand your audience if your ads prove difficult to deliver.

The more specific your target audience, the higher your ad costs will be. For example, let’s say you sell winter coats. Targeting any user who lives in New England will be less expensive than if you targeted men aged 60 to 70 who live on Cape Cod, have shown intent to purchase a winter jacket, and have shown an interest in lobster fishing. 

Bidding strategy

You’ll be competing with other brands in TikTok’s auction-style ad selling program, and your total cost depends on your bidding strategy. You’ll bid on the following:

• Cost per click (CPC). You pay when someone clicks on your ad; expect a ballpark cost of around 35¢ to $1, according to Jaclyn.

• Cost per mille (CPM). This is the amount you’ll pay for every 1,000 impressions; expect an average cost of around $4 to $7 as a rough estimate.

• oCPM (optimized cost per mille). This is how much you’ll pay for 1,000 impressions from people more likely to convert.

• Cost per view (CPV). This is the price you’ll pay when an individual watches your ad for more than six seconds. Expect an average cost of 1¢ to 7¢, according to Darkroom Agency.

Competition 

Being in a crowded industry or targeting a popular demographic means you’ll face steeper competition in the ad auction process, which will drive up your ad prices, impacting your TikTok ad revenue. You might also see steeper competition if you’re running ads during a popular time, like during the holiday season.

Make sure to account for this as you plan your ad budget and forecast TikTok ad revenue for the year. “In Q4, the CPMs are going to be higher,” says Jaclyn. “That’s just something to keep in mind if you’re doing a holiday shopping campaign.”

What you need to know about advertising on TikTok 

• It’s not just for Gen Z
• TikTok is a go-to resource for product discovery
• Users are buying from TikTok shop
• Unpolished content is the norm
• What works on Instagram might not work on TikTok

Advertising on TikTok comes with its own unique benefits and challenges. Here’s what to know before you start advertising on the video platform: 

It’s not just for Gen Z

Jaclyn says that TikTok is still the place to advertise for Gen Z, but also thinks more millennials are getting on the platform. According to CivicScience surveys of US adults over 18, adoption rates are increasing among all age groups. 

Here’s a breakdown of TikTok usage in the US by age:

• 73% of 18–24 year olds used TikTok in 2025 (up from 55% in 2023)
• 57% of 25–34 year olds used TikTok in 2025 (up from 46% in 2023) 
• 44% of 35–44 year olds used TikTok in 2025 (up from 41% in 2023)
• 26% of people 45 and older used TikTok in 2025 (up from 24% in 2023)

Jaclyn’s been advising her clients with millennial audiences to test TikTok, especially because it tends to have a lower CPM than Instagram. “There’s value in that the platform is a bit newer. I think the audience is really engaged there,” she says. 

TikTok is a go-to resource for product discovery

More and more people are using TikTok to search for and compare products. A 2024 survey by influencer marketing platform GRIN found that 42% of Gen Z consumers and 32% of millennials prefer to discover products on TikTok over Google, TikTok, Pinterest, Instagram, and Snapchat. The same survey found that 39% of Gen Z and 23% of millennials head to TikTok for product reviews. 

These statistics prove that a large number of TikTok users are opening the app with shopping in mind. As a small business owner, TikTok ads give you an opportunity to place your products in front of potential customers when they’re already in the buying mindset. 

Users are buying from TikTok shop

Beyond discovering and comparing new products, TikTok users are placing orders directly on the app through the native TikTok ecommerce marketplace, TikTok Shop. According to a 2025 survey by performance marketing agency PartnerCentric, 37% of Americans under the age of 60 have made a purchase on the marketplace.

You can sell products on TikTok by integrating TikTok with your Shopify storefront. This is easy with the TikTok app for Shopify, which syncs inventory and manages TikTok shop orders through your Shopify admin.

When you set up a TikTok shop, you can use TikTok’s affiliate marketing features to find creators to help you promote your TikTok products without needing to create ads yourself. This lets creators make money on TikTok by earning a commission when they successfully convert a user.

Even if you sell products on TikTok Shop, be sure to add a link to your TikTok bio for your online store. This can help drive traffic to your ecommerce site, where you can encourage users to take other actions like signing up for your newsletter or SMS marketing.

Unpolished content is the norm

The content that goes viral on TikTok tends to be unpolished. The app’s most watched videos often feature creators filming themselves without professional video setups.

“It’s important that [TikTok ads] mimic the organic style and use trending sounds. Human voice is really important,” says Jaclyn. “Overly polished content always underperforms. People want this to feel real; They don’t want to be just pushed product.”

Here’s an example from drapery company TWOPAGES. The video looks like it was shot on a smartphone, and it uses a trending song that likely sounds familiar to many users scrolling their feeds. The company shared this video on its profile and boosted it as an ad.

Rather than focusing on perfect videography, try to cement your brand voice, tell a compelling brand story, and create the kind of content you know your audience expects to see when they open the app. This helps your TikTok ads feel consistent with your brand identity, convey personality, and hold the attention of viewers eager to scroll past paid ads.

“Lead with entertainment. Be intriguing,” says Jaclyn. “If I run more shopping-focused ads without being entertaining, people are just not on board. You need to have something interesting going on.” 

What works on Instagram might not work on TikTok

Jaclyn says sometimes her advertisers will run the same ads from Instagram on TikTok, but budget limitations can impact this decision. 

“But I do really push, if we can, to do different content for TikTok,” says Jaclyn. “Because the stuff that’ll perform really well on Instagram will be the opposite of what is on TikTok and vice versa.”

The main difference is the level of authenticity and polish. 

“Authenticity is really big on TikTok—less formal content,” says Jaclyn. “You don’t want it to look sloppy, but it doesn’t have to be super, super polished.”

TikTok ROI

• Short-term ROI is higher than long-term
• Don’t expect high conversion rates
• Content quickly becomes outdated

There’s no doubt that using TikTok for business can be worth it. Here’s what to know about the return on investment (ROI) for paid TikTok ads: 

Short-term ROI is higher than long-term

In her work, Jaclyn has seen that short-term social media ROI for TikTok ads is higher than long-term ROI. She explains that a short-term return on ad spend (ROAS) of four to 12 is normal. Long term, that number will be closer to three to five.

TikTok’s own data supports this. A 2025 survey from TikTok and marketing agency Dentsu examined 15 Nordic brands advertising on TikTok. The surveyed brands experienced an average short-term marketing ROI of 11.8 and long-term ROI of 4.5.

This difference in short- and long-term ROI might be because of TikTok’s virality-driven algorithm, in which content can peak within as little as 48 hours and then fall.

“There are these trends that pop up almost every couple days,” says Jaclyn. “When advertisers are at their best, they’re finding those trends as they’re relevant to the brand—where there’s an intersection between the brand and the trend—and they’re jumping on it.” 

Don’t expect high conversion rates

While some brands do see high sales numbers and TikTok ad revenue shortly after launching a campaign, Jaclyn explains that high conversion rates from TikTok ads aren’t the norm. Jaclyn’s found CPMs (the cost-per-mille metric that measures impressions) to be a bit less expensive on TikTok than on a rival platform like Instagram, but you might not receive as many conversions. 

“It’s cheaper to get the impression out there, but there may be less actions happening on TikTok,” says Jaclyn. She explains that this might be because many users are in discovery rather than purchase mode.

This low-cost CPM makes TikTok a good option for reaching consumers at the top of the marketing funnel with brand awareness campaigns. Eventually, and with sequential messaging, you might be able to turn those users into customers.

Content quickly becomes outdated

TikTok trends move quickly, and as a brand, you need to keep up. This means frequently refreshing your ad creative. 

“I think the biggest thing—and this is a huge challenge on TikTok in particular—is to monitor frequency and ad fatigue,” says Jaclyn. “Ads wear out really fast, so just make sure you have the funds to refresh creative on a fairly regular basis if you start seeing performance dropping.” This cadence will depend on your budget and goals, but some of Jaclyn’s clients switch out creative as often as every three to five days.

As you consider the cost commitment of continually creating new TikTok ads, make sure to consider any resources you’ll need to pull away from posting organic TikTok content. A healthy TikTok marketing strategy includes both paid and organic content, which helps you forge more personal-feeling relationships with your primary audience.