‍Introduction

Most brands underestimate TikTok. Our research shows its true ROI is 10.7x higher than what last-click models reveal. This playbook shows how to tap into that hidden value—across media, creative, and measurement.

We analysed campaign performance across 10 e-commerce brands, using advanced measurement (Bayesian regression, for the data nerds) to get a clearer view of ROI across the funnel. We found that when you measure TikTok properly, its ROI is 10.7x higher than what last-click models show. That’s not a small discrepancy, but a clear signal that many brands may be underinvesting in one of their most efficient channels.

If you’re wondering how to advertise on TikTok or how to make it work for your brand in 2025, this guide is your starting point.

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TikTok advertising ROI: What last-click can’t see

Last-click misses the full picture

When developing your TikTok marketing strategy, understanding how the platform drives value at each stage of the funnel is crucial.

As a start, we need to rethink how we assess ROI on TikTok. Traditional attribution undervalues TikTok by up to 10.7x. That's the average delta between last-click attribution (LNDA) and the MMM-powered attribution we’ve used in this study. The problem with last-click is that it:

• Ignores upper-funnel interactions
• Doesn’t credit impressions
• Favours platforms that are used late in the journey (e.g. search)

Meaning you’ll never understand the true value of your investments if that’s what you use.

Real ROI across the funnel

The study showed that TikTok delivers strong returns at every funnel stage:

• Brand awareness campaigns: 2.6 median ROI
• Consideration campaigns: 3.9 median ROI
• Conversion campaigns: 3.1 median ROI

Even lower-funnel ROI is comparable to other channels — but it’s TikTok’s upper and mid-funnel strength that sets it apart.

The halo effect

Activating TikTok doesn’t just drive direct results — it also boosts brand demand elsewhere. Across the advertisers studied, we observed an average +26% incremental increase in brand search impressions within 1–2 months of launching TikTok campaigns..

Creative principles that drive TikTok ROI

UGC outperforms branded ads

 +55% ROI for UGC content, +19% more when unbranded. 

User-generated content (UGC) emerged as one of the most effective creative formats in the study. UGC not only feels more authentic and less scripted, it also aligns more closely with the kind of content users expect to see on TikTok. On average, UGC outperformed non-UGC content by +55% ROI, with unbranded UGC performing +19% better than branded versions.

Less branding means more return

 +81% ROI for content without logos or heavy overlays.

Lo-fi content with minimal branding consistently outperformed more traditional formats. This isn’t just a stylistic preference — it reflects how TikTok audiences engage. Instead of relying on logos or overlays to build recognition, top performers focused on tone, storytelling, and cultural relevance to connect with their audience. Overt branding significantly reduces ad performance on TikTok. Content that omits logos, heavy overlays, and overly promotional cues outperformed branded assets by +81% ROI.

On TikTok, being recognisable doesn’t come from slapping on a logo — it comes from building trust through tone, voice, and consistency.

Longer is better

+45% ROI for videos over 15 seconds.

Performance improved significantly when brands used longer-form storytelling — but it only worked when paired with attention-grabbing intros and clear value throughout. The best ads created a sense of rhythm: a strong hook, a reason to stay, and a seamless path to act. While short-form content dominates many platforms, TikTok rewards longer storytelling — as long as it earns attention early. Videos longer than 15 seconds performed +45% better than shorter ones. The best-performing ads balanced length with clarity: scroll-stopping intros, meaningful middle sections, and seamless CTAs.

Speech and hooks matter

 +1pt ROI for creative with speech (voiceover or direct to camera).

First impressions are everything on TikTok. Strong hooks in the first three seconds are critical to stop the scroll. The study also found that videos with speech — either face-to-camera or voiceover — tended to create a stronger sense of connection, leading to +1pt higher ROI on average.

"The first three seconds are what counts. That’s when you earn attention — or lose it." – Martine Bergh, Senior Creative Strategist at Precis

Tap into TikTok culture

 85% of top-performing TikToks used trending sound or platform-native formats.

Being successful on TikTok doesn’t require virality — it requires fluency. Top brands understood the platform's rhythms, sound trends, and content norms, embedding them into campaigns from the start rather than retrofitting trends after the fact. Understanding — and participating in — TikTok culture is essential. Top-performing advertisers didn’t just use the platform, they embraced its rhythms: jumping on relevant trends early, using platform-native formats, and incorporating sound meaningfully. In contrast, overly produced studio ads or repurposed assets underperformed consistently.

"What works is lo-fi, mobile-first content that speaks their language — fast, relatable, and entertaining from the first second." – Martine Bergh, Senior Creative Strategist at Precis.

TikTok media strategies that drives scale 

TikTok is not a platform where media efficiency comes from micromanaging audiences or pushing promotions in short bursts. It rewards consistency, platform-native structure, and synergy between creative and campaign planning.

Always-on strategies over burst campaigns

The brands that performed best on TikTok didn’t just show up — they stayed present. Always-on activity led to significantly higher ROI, not just from persistent visibility, but from deeper algorithm learning and better audience accumulation over time. In contrast, burst campaigns tended to deliver inconsistent results, as they lacked the continuity to drive familiarity and performance growth across multiple exposures.

"With TikTok, it’s not about turning on a campaign and hoping it peaks — it’s about showing up consistently and letting the algorithm do its job over time." Martine Bergh, Senior Creative Strategist at Precis.

Broad targeting makes TikTok’s algorithm work for you

Instead of segmenting audiences with overly narrow criteria, high-performing advertisers gave TikTok’s delivery system room to breathe. Broad targeting allowed the algorithm to do what it does best — learn quickly from performance signals and find high-converting audiences. The platform rewards creative relevance over rigid segmentation. Advertisers who overengineered targeting within the ad set often saw reduced scale and stalled campaign momentum.

How full-funnel campaign structures improve results

Success on TikTok requires designing for every stage of the customer journey. Advertisers that built clear funnel structures — using distinct campaigns for reach, engagement, and conversions — saw more predictable results and higher ROI. This approach allowed for clearer learning, better allocation of budgets, and stronger alignment with creative messaging. It also ensured audiences could progress naturally from first exposure to final action, rather than being hit with hard-sell messaging from the outset.

"The best results came from brands that treated TikTok as a journey, not a channel. One campaign can’t carry your message from hello to purchase." – Zlatko Kurtagic, Global Paid Media Lead at Precis.

Smart account setup matters

Campaign structure matters more on TikTok than many marketers assume. Top performers kept their accounts clean and purpose-driven. They used separate campaigns for each funnel stage, budgeted strategically across them, and made sure naming conventions allowed for quick learning and optimisation. Importantly, they also aligned creative messaging with the campaign objective — ensuring the tone, pacing, and calls-to-action matched whether the goal was awareness, consideration, or conversion.

Measurement framework for full-funnel growth on TikTok

TikTok is a platform where creativity and media meet data. But measurement gaps remain one of the biggest reasons performance is undervalued or misunderstood. Brands that succeeded in this study didn’t just track conversions — they invested in frameworks that reflect how people actually behave across the funnel.

Complete pixel implementation is non-negotiable

One of the most consistent traits of top performers was a fully implemented TikTok Pixel. Brands that tracked all key events — including add-to-cart, checkout initiation, and purchase — gave the platform’s algorithm better signals to optimise delivery. Advanced matching and event prioritisation also played a role in maximising learnings.

Why advanced attribution models matter

Traditional attribution models like last-click undervalue TikTok's real impact, particularly in awareness and consideration stages. That's why we decided to use Alvie's attribution model. Alvie is a tool owned by Precis that helps performance teams move fast and spend smarter, especially by offering unbiased attribution and budget optimisation.

Using Alvie's Bayesian MMM approach designed for today's privacy-first landscape, we evaluated media influence across:

• Clicks and impressions
• Delayed conversion paths
• Saturation and diminishing returns
• Cross-channel halo effects
  
  

Alvie's model provided a much fairer view of TikTok's performance and highlighted where value was being missed by legacy measurement setups.

‘“Consumers discover products through creators and content that traditional models overlook, which is why many brands are undervaluing TikTok’s ROI by over 10x. If you're still using last-click, you're not seeing how growth actually happens.”’ - Carolina Zetterman, Marketing Science Director at Precis.

Measure causal impact for upper-funnel value

Beyond attribution, several advertisers applied causal impact analysis to assess TikTok’s influence on brand demand signals like search volume and branded traffic. This approach compares actual outcomes with a synthetic control scenario — helping quantify what would’ve happened without TikTok in the mix.

Results showed that 45% of brands saw statistically significant lifts, with brand search impressions increasing by an average of 26% within 1–2 months of activation. For brands trying to prove TikTok’s halo effect or justify upper-funnel budgets, this was a critical unlock.

The TikTok performance checklist — what top advertisers get right

Want to know what separates high performers from the rest on TikTok? It’s not just one thing — it’s a repeatable set of behaviours that work together. Based on our analysis of 10 Nordic e-commerce brands, we identified the practices that consistently delivered above-average returns — and those that held brands back.

TikTok could be your most efficient marketing channel – if you do it right.

This study shows that TikTok’s potential is often underestimated, not because it underperforms, but because it’s misused and poorly measured. Campaigns that follow traditional creative formats, rely on last-click attribution, or run short bursts miss out on the full impact TikTok can deliver.

But when brands lean into TikTok’s strengths, native content, broad targeting, always-on structure, and modern measurement, the platform drives performance across the funnel.

If your brand is still treating TikTok as a niche experiment or branding-only channel, it’s time to rethink.

→ Don’t want to do it alone? We’ve got you covered.

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FAQs: TikTok advertising for e-commerce

Q: Does TikTok deliver real ROI for ecommerce brands?

A: Yes. Based on regression-based attribution, TikTok campaigns drove up to 10.7x higher ROI than reported by last-click models.

Q: What media strategies work best on TikTok?

A: Always-on campaigns with broad targeting, full-funnel structure, and creative alignment deliver the strongest ROI. These strategies allow the algorithm to learn, build momentum, and reach high-converting audiences over time.

Q: What makes a TikTok ad successful?

A: Ads with UGC, storytelling, minimal branding, and speech hooks consistently outperformed. See our creative checklist for more.

Q: How do you measure TikTok performance properly?

A: Use modern attribution (like MMM or regression-based models) and track full-funnel behaviour including impressions, not just clicks.

Methodology

This playbook is based on a research study by Precis and TikTok, analysing TikTok ad performance across 10 Nordic e-commerce brands between 2023-2024.

We compared traditional last-click attribution with our performance marketing and attribution tool, Alvie, and its Bayesian MMM model, to measure ROI across the funnel. The study also included creative and media audits, pixel and tracking setup reviews, and causal impact analysis to assess TikTok's halo affects on brand demand.

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