TikTok ROI and incremental sales driven for FMCG/CPG and Retail brands in Central Europe. Economiser-based case study
TikTok ROI and effectiveness in our Economiser / MMM benchmark database
As Economiser (our Marketing Mix Modelling solution) provider, we have a broad overview of advertisers from five continents and multiple categories. We see TikTok becoming a part of media-mix in increasingly many cases. As TikTok in the recent years appears more and more frequently in our Economiser ROI (Return on Investment) results database. Consistently, we have more questions from clients experimenting with TikTok who are curious how their results compare to benchmarks. Thus, we’ve decided to look at the results ourselves.
Economiser / MMM being the gold standard of ROI measurement and media-mix optimisation originated from FMCG/CPG, but is now broadly adopted across multiple categories and businesses.
While running 50+ Economiser projects in our Business Science hub in Warsaw, we found there to be a relatively high density of TikTok results in Western Europe, US and Asia. However, the evidence for CPG and Retail seemed scarce for Central Europe. In our own client portfolio, the Economisers for Central Europe constitutes less than 10% of all Economisers run in 2023.
Based on the internal research, and research published by other research agencies, we also found that the creative quality might significantly impact the cascading choices of media channels in terms of ROI, if executed particularly well or wrong for any given media channel.
With these caveats in mind we decided to review the TikTok sales results case by case and present one CPG and one Retail case in Central Europe. We made sure they’re representative and aren’t biased or are not outliers in any way. Particular focus was on TikTok’s scale and share in investment, as well as efficiency and effectiveness results being inline with our median results.
Key learnings and insights
- TikTok in our FMCG case in Poland is 58% more efficient than average media.
- TikTok is more efficient than other media channel groups, simply put, it has the highest Return on Investment.
- It’s followed by other Paid Social, which are 21% more efficient than average, and other Digital media. In terms of efficiency, offline media perform the worst with the ROI -6% lower than the average media ROI.
- TikTok in our Retail case in Poland is 48% more efficient than average media.
- TikTok is more efficient than any other group of media channels. It’s 48% more efficient than the average for all media. It’s followed by other Social media channels that are 31% more efficient than the average.
- In both, FMCG/CPG and the Retail case, TikTok is the least effective (drives the least incremental sales), which is closely connected to its low scale of investment
- It would be recommended for the FMCG and Retail advertisers in Central Europe to experiment with a +50% weekly investment intensity vs the weekly spend during the modelled period to learn how the diminishing return effects kick-in for TikTok.
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