TikTok CPMs Are Lower than Duopoly, Advertisers See Opportunity

The CPM metric, or cost per mille, is a great tool for advertisers to use in comparing ad platforms side by side.  Defined as “cost per 1000 impressions,” it gives us a general sense of how expensive it is to garner prospect attention on any given platform.  It’s no surprise then that TikTok is gaining market share based solely upon the cost of impressions. 

According to data from 2022 reported by marketing agency VaynerMedia and the Financial Times, the cost per thousand impressions for video advertising on TikTok is cheaper compared to other competing platforms, with rates almost half those of Instagram Reels, a third less than Twitter and 62% lower than Snapchat’s.

To perhaps give you a more balanced sense of CPM, let’s look at the duopoly (Facebook [Meta] and Google Ads).  Facebook’s average CPM is around $14, and Google’s can be as high as $41, although it’s harder to pin down due to the multitude of different ad products on Google.  TikTok is around $8, making it a superb value. 

Despite this, the cost per thousand impressions of Facebook and Instagram, owned by the same company, decreased in the third quarter of last year according to Tinuiti. Despite this, many Meta advertisers saw an increase in ad prices [it’s funny how averages work], with the median advertiser seeing a 6% increase. In Q3 2022, the cost per thousand impressions of Facebook decreased by over 20% while Instagram’s increased by 17%. When compared to two years ago, the CPM of Facebook has risen by 16%, while Instagram’s CPMs have grown by 55%.

Combine that insight with a study conducted by ad design platform Creatopy last year, which discovered that TikTok garnered nearly three times as many impressions for a single video as Instagram Reels or YouTube Shorts, and the platform starts to look like even more of a value play as it continues to gain market share.