TikTok Shop Advertising Budget Calculation Guide

How is TikTok Shop Advertising Credit Calculated?

With the popularity of short videos, TikTok has become one of the largest short video platforms in the world in recent years. As an e-commerce platform under TikTok, TikTok Shop has also rapidly risen in recent years, attracting the attention of many merchants and users. In the promotion of TikTok Shop, advertising credit is an important concept. So how is advertising credit calculated? This article will explain the calculation method of advertising credit in detail based on recent news reports.

I. Concept of Advertising Credit

Advertising credit refers to the reward obtained by merchants through ad placements in TikTok Shop promotions. The amount of advertising credit depends on the effectiveness of the ad placement, including click-through rate, conversion rate, exposure volume, and other factors. Merchants can increase the exposure and sales of their products by placing ads, thereby earning more profits.

II. Calculation Method of Advertising Credit

1. Basic Fees Merchants need to pay certain basic fees, including advertising placement costs, maintenance fees for the ad platform, etc. These fees are fixed, and merchants need to decide whether to place ads based on their own needs and budgets.

2. Click-Through Rate Click-through rate refers to the proportion of ads that are clicked, i.e., the number of clicks per thousand exposures. Merchants can improve the click-through rate by enhancing the quality of the ad and the appeal of the images, thereby earning more advertising credits.

3. Conversion Rate Conversion rate refers to the final sales or order volume brought about by the ad. Merchants can improve the conversion rate by optimizing product descriptions, prices, and promotional activities, thus earning more advertising credits.

4. Other Factors In addition to the above factors, advertising credit is also influenced by other factors such as policy adjustments by the ad platform and market competition. Merchants need to closely monitor changes in these factors and adjust their ad placement strategies accordingly.

III. Case Analysis

Assume a merchant places an ad on TikTok Shop with an exposure volume of 100,000 times, a click-through rate of 2%, and a conversion rate of 5%. According to the platform's policies, the merchant can receive a certain percentage of advertising credit rewards. Assuming the reward ratio is 10%, then the merchant's advertising credit would be

Advertising Credit = Exposure Volume × Click-Through Rate × Conversion Rate × Reward Ratio = 100,000 × 2% × 5% × 10% = 100 yuan

IV. Conclusion

Advertising credit is an important concept in TikTok Shop promotions. Merchants can earn more advertising credit by improving the quality of their ads, the appeal of their images, product descriptions, prices, and promotional activities. At the same time, merchants need to closely monitor changes in platform policies, market competition, and other factors, and adjust their ad placement strategies in a timely manner.

It should be noted that the calculation method of advertising credit varies from platform to platform. Before placing ads, merchants need to carefully understand the platform's policies and formulate suitable ad placement strategies based on their own needs and budgets. At the same time, merchants also need to avoid over-reliance on advertising credit and instead focus on improving product quality and marketing methods to increase sales and profits.