August Noble was hesitant to test TikTok ads for clients of his independent marketing firm. “I was begrudgingly holding off having to learn a new platform and a new creative approach,” Noble said in a recent phone interview. But in a time of advertising upheaval, with Apple’s new data policies crimping marketing, the economy slowing, and brands looking for better ad performance wherever they can get it, Noble had to test TikTok.

Noble said he manages between $5 million and $7 million in ad spending a month for about a dozen brands, half of which are direct-to-consumer products. About 80% of the ad budgets typically go to Facebook and Instagram, he estimated, and most of the rest to Google. In July, Noble ran a test, moving 80% of one client’s spend to TikTok, turning off ads on Meta-owned Instagram and Facebook. Noble would not name the brand publicly, but it makes consumer health packaged goods—the kind of product that is easy for TikTok influencers to demonstrate in videos, driving sales on sites like Amazon after gaining a little virality.

“On TikTok, it was massive,” Noble said of the leap in revenue. During an average month, the product generated about $180,000 in sales from about $80,000 in ad spending. In July, revenue was closer to $300,000, after the TikTok experiment.

That is all well and good, but Noble’s example also highlighted another trend affecting millions of marketers: TikTok could not quite measure how effective the ad campaigns were, and that’s because of Apple, Noble said.

Apple’s anti-data policies made it so apps cannot track a consumer from an ad view to a sale. Once a consumer leaves an app like TikTok to make a purchase, the “conversion” is undetectable, unless the consumer allowed the app to track them. That is part of Apple’s App Tracking Transparency rules, which took effect last year. The loss of “signal” on Apple software—iOS—wreaked havoc on marketers’ measurement schemes. “Attribution isn’t perfect from any of these platforms, but the gap that we’re seeing with TikTok is bigger than any other,” Noble said.

Conversion cloud

TikTok declined to comment for this story, but the Chinese-owned app is integrating its ad network more closely with tools that Apple has built to share some campaign metrics with marketers. And marketers like Noble are figuring out measurement on their own.

TikTok reported a return on ad spend of about 0.4 times on the campaign for Noble’s health product brand. That meant for every $100 in ad spend, the brand saw about $140 in sales. But Noble said that the actual return on ad spend was 10 times higher than that. In July, the brand saw about $400 in revenue from every $100 spent on ads.

Meta has had similar issues reporting “conversions” over the past year. Ads performed more effectively than Meta could technically measure. Late last year, Meta said that it undercounted conversions—when ads leads to sales and other outcomes—by about 8%.

These kinks in the ad machinery are affecting TikTok, Meta and everyone else, according to ad tech specialists. And all platforms are coming up with their own models to measure ads based on the limited data that Apple now shares through SKAdNetwork, which reports broad performance metrics from ad campaigns.

“TikTok has been one of the bellwethers around innovation with SKAdNetwork,” said Katie Madding, chief product officer at Adjust, a mobile ad measurement and analytics platform. Adjust has done studies with TikTok to show marketers how to work within Apple’s anti-tracking framework, and how to use SKAdNetwork.

Last week, Adjust released a study into how marketers on apps like TikTok can prepare for iOS data changes, and for the update to SKAdNetwork that is set to come next month. The study shows that advertisers are looking for guidance on how best to measure ads while Apple is still tinkering with the parameters of the platform.

Lashanne Phang, senior director of mobile at PubMatic, the programmatic ad platform, said that TikTok is gaining ground among marketers because of its algorithm. Even if TikTok can’t pinpoint its own effectiveness, it seems to target ads with the same proficiency with which it targets videos to users of the app. TikTok’s infamous algorithm is known for hooking audiences with incredibly niche interests and entertainment tastes.

“Ultimately it’s who has the algorithm that is able to target the user best based on user behavior and predictions,” Phang said.

Mass marketing confusion has led to a reshuffling of the ad decks, according to Noble. Brands that were comfortable plowing all their money into Facebook, Instagram and Google are now open to test the waters on TikTok, and to a smaller extent Snapchat and Pinterest. Meta’s ad revenue was $28.15 billion in the second quarter, down slightly from $28.58 billion in the same quarter in 2021, which was its first yearly ad revenue decline since becoming a public company in 2012. Meanwhile, TikTok does not disclose ad revenue, since it is a Chinese-based private company, but The Wall Street Journal reported recently that TikTok could triple its ad revenue this year to $12 billion.

Basis Technologies, a demand-side platform for advertisers to bid on ad inventory on web, apps and connected TV, said brands are increasing spend on TikTok. “We are seeing our advertisers’ investment in TikTok nearly double this year compared to last year, collectively,” said Amy Rumpler, senior VP of paid search and social at Basis Technologies, in an e-mail. “As advertisers overall are becoming more comfortable with the platform and its ability to generate performance, dollars are starting to flow in that direction.”

True Classic Tees

Ben Yahalom, chief business officer at True Classic Tees, is running marketing tests on Meta to adjust to Apple’s new iOS rules. True Classic is in its third year of business, with about $200 million in sales a year from its direct-to-consumer clothing lines, with about $100 million in marketing spend a year, Yahalom said.

True Classic puts up to 60% of its ad budget into Meta, because Meta’s apps reach 3.65 billion people a month. “Without Meta we would definitely not be where we are,” Yahalom said. True Classic will “push as hard as we can” into TikTok, Yahalom said, but it’s “not nearly as scalable as what you get on Meta.”

Meanwhile, True Classic has adjusted how it targets ads, choosing to reach broad audiences instead of niche interests. For instance, instead of just serving ads to men, the target for the clothing line, True Classic includes women in the targeting. Meta’s advertising automation algorithms chooses the most likely shoppers regardless of demographics. True Classic also experiments with more creative versions of ads, to win over shoppers with better marketing instead of relying on hyper-precise targeting. And True Classic adjusted the bidding strategy to reach people on Apple devices, Yahalom said. True Classic is willing to spend more to win an ad impression for a person using an Apple device, because its calculations showed ads to Apple consumers drive higher returns on ad spend.

With marketers testing and learning on social media apps, the competition is heating up for Meta and TikTok. Both need to prove they are driving performance at a time when those data points are hard to see. “Right now, TikTok is the channel that makes us feel like we have a growing business,” indie marketing consultant Noble said.

Still, Meta has a history of running performance campaigns and finding audiences for small businesses. “Wherever performance goes, budget flows,” Yahalom said. As for TikTok, “as a channel, it’s definitely working, but it’s hard to do over time,” Yahalom said.