TikTok is proving to be a hidden powerhouse for brands. Leveraging a cohort of retail clients’ media mix models, last-click models, and platform KPIs over the past two years, Ovative experts identified that TikTok delivers ROI that is, on average, 23x higher than what last-click models suggest.
To debunk the full-funnel impact of TikTok, Ovative Group utilized its own technology, EMRge by Ovative Group™, which includes Modern MMM+ and powers a unified measurement approach, called Enterprise Marketing Return (EMR), that allows brands a holistic view of their ROI, uncovering the true full-funnel value of TikTok and challenging the misconception that TikTok isn’t a revenue driver.
Sound intriguing? Read on.
The Superior Alternative to Last-Click Measurement
Last-click models focus only on the final point of conversion, overlooking the broader contributions of marketing efforts like in-store sales, customer retention, and brand growth. By capturing the full scope of a brand’s performance across channels, Ovative’s EMR measurement approach provides a more comprehensive understanding of TikTok’s role in driving both short- and long-term business outcomes. This deeper insight empowers marketers to recognize TikTok’s full value beyond immediate conversions.
“Marketers have long been misled by last-click models, which capture only a fraction of the true value a platform like TikTok brings. With EMR, we’re able to reveal the full picture—showing not only TikTok’s significant revenue-driving power across channels but also its critical role in building a long-term, profitable customer base. This insight allows brands to invest smarter and capture the returns they’ve been missing.” – Beth McKigney SVP, Measurement and Technology Solutions
So, how did EMR reveal TikTok’s true value?
According to Ovative’s 2024 EMR Power Rankings, which ranks the channels driving the highest returns for marketers, TikTok ranked 5th of all media channels.
Let’s break it down with a couple of examples.
TikTok’s Impact Revealed with EMR
As mentioned, enterprise revenue accounts for marketing’s impact on every sales channel, online and offline. It’s calculated by accounting for incremental impact of enterprise sales and media’s immediate and lagged impact (also referred to as future media value). Ovative’s enterprise revenue calculation revealed:
- More than 50% of revenue driven by TikTok is realized in-store, compared to other platforms which see about 35% of in-store sales. The general assumption is that TikTok’s lower-funnel impact typically drives online sales. However, EMR calculates that TikTok over indexes in driving in-store revenue.
- More than 40% of TikTok’s incremental revenue occurs in the weeks following media investments. If you’re not seeing immediate value in your TikTok media investments, consider TikTok’s future media value. Brands will likely feel the impact on their bottom line later than other platforms and will need to flight accordingly.
Supplementing this evidence of TikTok’s impact on enterprise revenue, TikTok’s Attribution Analytics data revealed the average time to purchase after viewing an ad on TikTok is about 10 days.1
Secondly, through incrementality testing, Ovative experts found that TikTok drove a $5+ iROAS for a recognized women’s retail brand. Looking beyond last-click metrics allowed the brand to scale TikTok +68%, driving profitable revenue and customer file growth.
“Agencies and media mix models have long driven marketing effectiveness with top talent behind the scenes. There is innovation in this front where market & signal fragmentation has brought back the need for operationalizing the design of mix models in faster, nimbler, and privacy-conscious ways that can keep pace with the needs of performance marketers. We’re grateful to our partners at Ovative for leading this innovation, building measurement resilience, and showing how TikTok delivers for brands.” – Jorge Ruiz, Global Head of Marketing Science, TikTok
Clearly, there’s an opportunity for brands to incorporate TikTok into their media strategy. However, for brands who are already activating on this channel, there may still be missed opportunities, especially if they are still reliant on last touch attribution.
What Last-Click Models Miss on the Path to Purchase
As a view-first platform, TikTok’s impact is completely missed by last-click models. In reality, the platform is contributing heavily to bottom-line sales, spurring action from consumers throughout the entire path to purchase.
While it’s not surprising that 70% of users discover new brands and products via TikTok2, its influence actually increases as you delve further into the consumer journey. 74% of users are inspired to learn more about a brand or product after viewing TikTok ads3. For the many businesses focused heavily on conversions, traditional last-click attribution models once again fall short: 79% of TikTok-driven purchases are missed with these common attribution methods2.
By overlooking TikTok, businesses are missing the platform’s unique ability to foster product discovery and connect brands with new customers, ultimately leading to sales.
If you’re still using last-click models, it’s time to upgrade. Ovative’s EMRge solution, with advanced Marketing Mix Modeling (MMM+), closes the gap between limited reporting and precise measurement. Fast and robust, MMM+ helps performance marketers clearly see the true value TikTok brings to brands.
Maximizing TikTok’s Impact with a Full-Funnel Strategy
Due to the limitations of last-click models, many marketers confine TikTok to the upper funnel, diminishing its effectiveness. Ovative’s research reveals that brands investing more in mid and lower funnel strategies achieve 2x higher EMR than those focusing primarily on the upper funnel. This underscores that brands using TikTok across all funnel stages can realize greater EMR, reinforcing the value of a full-funnel approach.
When compared to last-click models:
Clearly, TikTok is more effective than assumed. Brands who have not relegated TikTok to an upper funnel tactic will likely come out on top.
There’s one more important factor to consider: the customer. Brands should also evaluate their funnel mix on TikTok based on their audience’s brand awareness. Those with low awareness should especially not abandon spending in upper funnel. For example, a less recognizable brand saw 171% high EMR with a focused mid and upper funnel investment strategy compared to a more recognizable brand with the same strategy.
The Next Steps for Marketers
According to National Research Group (NRG), 7 in 10 say TikTok has become their go-to platform for consuming short-form videos5. There is a tremendous opportunity to reach consumers where they are. Here’s how marketers can take action:
- Utilize TikTok’s Full-Funnel Ad Products to drive purchases and attract new audiences, turning viewers into customers. By leveraging a phased approach, brands can drive customers down the funnel effectively, decreasing CPAs and increasing conversions over time. (See how a brand improved performance using Full Funnel on TikTok here)
- Access TikTok’s Attribution Analytics to drive more understanding on consumer journeys and enable view-through attribution (VTA) for more data that can be used for campaign optimization.
- Move Beyond Last-Click Models by leveraging media mix models like EMRge by Ovative’s™ Modern MMM+ to drive enterprise sales and incremental impact with TikTok.
It’s time to stop leaving money on the table. Connect with Ovative’s media and measurement experts to maximize your TikTok impact.
Sources:
[1] TikTok Attribution Analytics data from H1 2024
[2] TikTok Marketing Science Global Retail Path to Purchase Study 2021 conducted by Material
[3] TikTok Marketing Science Global Shopping Ad Products Study 2022 conducted by Material
[4] TikTok Marketing Science Post-Purchase Analysis conducted by KnoCommerce, 2022
[5] NRG, “Future of Social Video,” 2023* *TikTok’s use of this data does not equate to an endorsement
