A marketer using TikTok's self-serve ad platform beta says it has been up to 400% cheaper than Instagram's for driving website visits

• TikTok's self-serve ad platform is still in its infancy. But some of its beta users say it's more cost effective than competing products at Instagram and Facebook for driving website visits and app installs.
• One of its beta testers, the Australian teeth-whitening brand HiSmile, said TikTok's self-serve ads are three to four times cheaper than ads on competing apps for driving traffic to its website.
• While TikTok has been a lead generator for HiSmile, the app's ability to drive purchases is still an open question.
• "TikTok's ad platform is very new, so it's not quite tuned to what will get you the most conversions," said Justin Gaggino, HiSmile's second-in-command.
• Click here for more BI Prime stories.

TikTok's self-serve ad tool launched in beta last year, and some of its early users are already considering boosting their investment in the platform after seeing promising results.

"For us from an influencer and an organic standpoint, it's definitely a place we're going to play further and further into," said Justin Gaggino, an executive at the teeth-whitening brand HiSmile. "From the paid side, we'll continue to test and scale up because the attention is on TikTok now."

Gaggino said HiSmile has been testing TikTok for about six months. It's found TikTok's self-serve ads to be three to four times cheaper for driving traffic to its website than ads on Instagram or Facebook. He attributes its lower costs to the fact that TikTok has fewer advertisers and therefore less competition in its biddable ad auctions.

Some other companies have found TikTok's self-serve platform similarly cost effective. The fintech startup, Tally, told Business Insider that TikTok ads were 300% more cost effective than Instagram ads for driving installs of its automated debt management app.

While HiSmile says TikTok is cheaper than its competitors in generating leads to its website, they're not always the most qualified users.

"TikTok's ad platform is very new, so it's not quite tuned to what will get you the most conversions," Gaggino said. "It takes a bit of maturity for TikTok itself to understand its own pixel and relaying those messages and feedback and better information to get those conversions that brands are looking for."

As a beta user, HiSmile serves in-feed video ads on TikTok using a "Shop Now" button as a call-to-action. The company has tested some of the platform's targeting tools, filtering by age and geography and using behavioral targeting to reach 16-and-older users in the US, UK, and Australia who are interested in topics like personal care and beauty.

"I don't tend to trust it super heavily just because obviously it's new and there's a limited amount of information that TikTok itself will have so far," Gaggino said of the company's audience segments.

HiSmile first began engaging with TikTok's Generation-Z user base back in May 2016 when the app was still called Musical.ly. The company grew an audience of roughly 17,000 followers on Musical.ly. It stopped investing marketing resources in the app until August 2019 - a year after it was merged into TikTok by its parent company, ByteDance.

"We were seeing it become kind of this cultural zeitgeist where things that were on TikTok and songs were then porting over to Instagram and Reddit," Gaggino said.

Now the company is using a combination of influencer marketing, organic reach, and paid ads to grow its brand awareness and follower count on TikTok.

To learn more about HiSmile's TikTok strategy, including its recent influencer marketing campaign that helped the company add 100,000 new followers in a week, read our full story on Business Insider Prime:

How a teeth-whitening brand gained 100,000 followers on TikTok by sponsoring a 'wave' of content from the Hype House and Sway LA

And for more stories on how companies are using influencers to promote their brands on TikTok, check out these other Business Insider Prime posts:

• TikTok star Charli D'Amelio gave Dunkin' 294 million free video impressions in under 2 months and got her own cold-brew tap as a thank-you: Brands are taking over TikTok, making appearances in both organic (unpaid) videos and sponsored posts created by influencer marketers.
• Leaked campaign brief shows the video ideas Cash App pitched to TikTok influencers, including 'when you win a bet by doing something dope': Cash App paid dozens of influencers to promote its app on TikTok. Here are the content ideas the company shared with creators for sponsored posts.
• A milkshake brand blew up on TikTok, and its 460,000 followers have changed how it approaches marketing and its target audience: With 460,000 TikTok followers, the milkshake maker F'real has built a larger following than national brands like Chipotle, Walmart, and Burger King.
• CASE STUDY: TikTok ads have been 300% more efficient than Instagram ones in getting new users for fintech startup Tally: As more adults sign up for TikTok, fintech brands are using influencer videos and its self-serve ad platform to advertise on the platform.