Solved: Can TikTok Ads Work?

Hi there,

Thanks for reaching out! Happy to give you some of my initial thoughts and guidance on using paid ads, and specifically on your question about TikTok.

It's easy to get caught up in the hype of a new platform like TikTok, and while it can be a powerhouse, a lot of businesses jump in and just burn through their cash without a proper plan. The platform you choose is actually one of the last decisions you should be making. The real work, the stuff that determines whether you succeed or fail, happens way before you even open an ad account. Below I've put together a pretty detailed guide on how I'd approach this, starting with the foundations you absolutely have to get right first.

Your ICP is a Nightmare, Not a Demographic

Right, let's get one thing straight. Forget the sterile, demographic-based profile your last marketing hire made. "Companies in the finance sector with 50-200 employees" tells you absolutely nothing of value and leads to generic ads that speak to no one. You are not selling to a company size; you are selling to a person. A person with a problem. To stop burning cash, you must define your customer by their pain.

You need to become an expert in their specific, urgent, expensive, career-threatening nightmare. Your Head of Engineering client isn't just a job title; she's a leader terrified of her best developers quitting out of frustration with a broken workflow. For a legal tech SaaS, the nightmare isn't 'needing document management'; it's 'a partner missing a critical filing deadline and exposing the firm to a malpractice suit.' Your ICP isn't a person; it's a problem state.

Once you've isolated that nightmare, you can find them. Where do they hang out online when they're trying to solve this problem? Find the niche podcasts they listen to on their commute, like 'Acquired'; the industry newsletters they actually open, like 'Stratechery'; the SaaS tools they already pay for, like HubSpot or Salesforce. Are they members of the 'SaaS Growth Hacks' Facebook group? Do they follow people like Jason Lemkin on Twitter? This intelligence isn't just data; it's the blueprint for your entire targeting strategy. Do this work first, or you have no business spending a single pound on ads. It's the diffrence between shouting into a void and whispering in the right person's ear.

I'd say you need a message they can't ignore

Once you know who you’re talking to and what keeps them up at night, you need to craft a message that stops them scrolling. Most B2B advertising is a sea of bland feature lists and vague promises. You need to be different. Your ad copy needs to grab them by the collar and show them you understand their world.

For a high-touch service business, you deploy the Problem-Agitate-Solve framework. You don't sell "fractional CFO services"; you sell a good night's sleep. Your ad would say, "Are your cash flow projections just a shot in the dark? Are you one bad month away from a payroll crisis while your competitors are confidently raising their next round? Get expert financial strategy for a fraction of a full-time hire. We build dashboards that turn uncertainty into predictable growth." See? We state the problem, twist the knife a bit (agitate), and then present our service as the clear solution.

For a B2B SaaS product, you use the Before-After-Bridge. You don't sell a "FinOps platform"; you sell the feeling of relief. Your ad would say, "Your AWS bill just arrived. It’s 30% higher than last month, and your engineers have no idea why. Another fire to put out. (Before). Imagine opening your cloud bill and smiling. You see where every dollar is going and waste is automatically eliminated. (After). Our platform is the bridge that gets you there. Start a free trial and find your first £1,000 in savings today. (Bridge)." You paint a picture of their current hell, show them a vision of heaven, and position your product as the only way to get there. It's a classic for a reason.

For high-ticket physical products, like lab equipment, you attack the feature-obsession head-on. Don't just state the spec; state its consequence. "Our new mass spectrometer has a 0.001% margin of error. So what? So your lab can publish results with unshakeable confidence, securing more funding and attracting top talent that other labs can only dream of." You connect the feature to a real-world, high-stakes outcome that your ICP actually cares about. No one buys a feature; they buy what the feature enables.

You probably should rethink your offer

Now we arrive at the most common failure point in all of B2B advertising: the offer. The "Request a Demo" button is perhaps the most arrogant Call to Action ever conceived. It presumes your prospect, usually a busy C-level decision maker, has nothing better to do than book a meeting to be sold to. It is high-friction, low-value, and instantly positions you as a commoditised vendor. It screams "I want to take up an hour of your time to pitch you". Why would anyone click that from a cold ad?

Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. It needs to be low-friction and high-value.

For SaaS founders, this is your unfair advantage. The gold standard is a free trial (no card details) or a freemium plan (no card details either). Let them use the actual product. Let them feel the transformation. I remember one client, a SaaS for medical job matching, who was stuck at a £100 Cost Per Acquisition. They were trying to get people to book demos. We switched their offer to a simple, free account creation. Their CPA dropped to £7. Seven! The product was good, it just needed to be experienced. When the product itself proves its value, the sale becomes a formality. You aren't generating MQLs for a sales team to chase; you are creating Product Qualified Leads (PQLs) who are already convinced.

If you're not a SaaS company, you are not exempt. You must bottle your expertise into a tool, content, or asset that provides instant value. For a marketing agency, this could be a free, automated SEO audit that shows them their top 3 keyword opportunities. For a data analytics platform, it could be a free 'Data Health Check' that flags the top issues in their database. For a corporate training company, it could be a free 15-minute interactive video module on 'Handling Difficult Conversations' for new managers. For us, as a B2B advertising consultancy, it's a 20-minute strategy session where we audit failing ad campaigns completely free. You must solve a small, real problem for free to earn the right to solve the whole thing.

We'll need to look at the numbers that actually matter

The real question isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a truly great customer?" The answer lies in its counterpart: Lifetime Value (LTV). Most businesses I talk to have no idea what their LTV is, so they default to chasing the cheapest possible leads, which are almost always the lowest quality. This is a recipe for disaster.

Let's do the maths. You need three numbers:

• Average Revenue Per Account (ARPA): What do you make per customer, per month?
• Gross Margin %: What's your profit margin on that revenue?
• Monthly Churn Rate: What percentage of customers do you lose each month?

Now, the calculation is simple:

LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's use an example. Say your ARPA is £500, your Gross Margin is 80% (0.80), and your monthly churn is 4% (0.04).

LTV = (£500 * 0.80) / 0.04

LTV = £400 / 0.04 = £10,000

In this example, each customer is worth £10,000 in gross margin to your business over their lifetime. Now you have the truth. With a £10,000 LTV, a healthy 3:1 LTV:CAC (Customer Acquisition Cost) ratio means you can afford to spend up to £3,333 to acquire a single customer. If your sales process converts 1 in 10 qualified leads into a customer, you can afford to pay up to £333 per qualified lead.

Suddenly, that £250 lead from a CTO on LinkedIn doesn't seem expensive, does it? It looks like a bargain. This is the math that unlocks aggressive, intelligent growth and frees you from the tyranny of cheap leads. Play with the calculator below to see how these metrics impact your LTV and what you can afford to spend.

You'll need to choose the right battleground

Okay, so you know who you're targeting, what to say to them, what to offer them, and how much you can pay to get them. NOW, and only now, can we talk about platforms.

Thinking about which platform to use is about matching the platform's nature to your customer's mindset. There are broadly two types of advertising: catching people with intent (they're looking for a solution) and creating demand (they don't know they need you yet).

• Google Ads (Search): This is for catching intent. People are actively typing their problems into a search bar. For an outreach tool, you'd target keywords like "software for lead generation" or "contact info finding tool". This is the lowest-hanging fruit. The traffic is expensive, but highly pre-qualified. They are literally asking for what you sell. You need to be here if people are searching for your type of solution.
• Meta (Facebook/Instagram): This is a mix. You can do some intent-based targeting (retargeting website visitors), but it's mostly about creating demand. You target people based on interests, behaviours, and lookalikes. For the same outreach tool, you'd target interests like "lead generation", people following marketing publications, or followers of your competitors. You interrupt their social scrolling with an ad that speaks to a pain point they have, but weren't actively trying to solve at that exact moment.
• LinkedIn: The B2B king for targeting specific job titles and company profiles. It's expensive, but if you need to reach the 'Head of IT' at FTSE 100 companies, there's no better place. One of our B2B software clients saw a $22 CPL for decision-makers on LinkedIn, a price they were very happy to pay given their LTV.
• TikTok: This is pure demand creation, but on steroids. It's an entertainment platform first and foremost. People are there to be amused, not sold to. You can't run a corporate ad here. It has to look and feel like a native TikTok. This is where your question comes in.

One more thing on platforms like Meta and TikTok. Here is the uncomfortable truth about awareness campaigns. When you set your campaign objective to "Reach" or "Brand Awareness," you are giving the algorithm a very specific command: "Find me the largest number of people for the lowest possible price." The algorithm, in its infinite wisdom, does exactly what you asked. It seeks out the users inside your targeting who are least likely to click, least likely to engage, and absolutely, positively least likely to ever pull out a credit card. Why? Because those users are not in demand. Their attention is cheap. You are actively paying the world's most powerful advertising machine to find you the worst possible audience for your product. To find customers that will actually buy from you, you should switch your campaign to optimise for a conversion objective, like leads or signups, even on TikTok.

Let's talk about TikTok specifically

Right, so TikTok. It can be an absolute goldmine, or a money pit. The difference is understanding the culture of the platform. We've seen fantastic results for some clients, like one app where we drove over 45k signups at under £2 each using a mix of platforms including TikTok. But it only worked because we respected the platform.

1. Creative is EVERYTHING.
This is non-negotiable. If you take a polished, corporate video ad from Facebook and run it on TikTok, it will die a horrible death. Your ad MUST look like a TikTok. That means using a vertical 9:16 format, using trending sounds, using on-screen text, and having a raw, authentic feel. The best ads don't look like ads at all. They look like a normal video from a creator.

User-Generated Content (UGC) is king here. This means paying creators (they don't need to be huge influencers) to make videos using or talking about your product. It provides instant social proof and feels completely native to the platform. We had several SaaS clients see great results with UGC videos. It's not about production value; it's about authenticity and entertainment value. Your ad has to entertain first, and sell second. This is a massive mental shift for most marketers.

2. The Algorithm is Your Friend.
TikTok's targeting options are less granular than Meta's. While you can target interests and hashtags, the real power is in the algorithm. Your job is to feed it a great video and tell it what a conversion looks like (e.g., a signup on your website). Start with broader targeting and let the algorithm find your audience. It's incredibly good at figuring out who is responding to your ad and then finding more people just like them. This is why the creative is so important – a good creative teaches the algorithm who your customer is.

3. Campaign Structure.
Keep it simple. You don't need dozens of ad sets.

• ToFu (Top of Funnel): A campaign with a 'Website Conversions' objective, optimised for your key event (e.g., Trial Signup). Use a few ad sets here, each testing a broad interest category relevant to your ICP's pain points. E.g., one for 'small business tools', one for 'productivity hacks', etc. Put 3-5 of your best UGC videos in each ad set and let TikTok's ad-level optimisation figure out the winners.
• MoFu/BoFu (Middle/Bottom of Funnel): A retargeting campaign. Group all your website visitors, video viewers, and profile engagers from the last 30-60 days into one audience. Show them ads that handle common objections, showcase testimonials, or present a limited-time offer to get them over the line. Tbh, for many businesses just starting, a single ToFu campaign is enough to get going.

TikTok is a volume game. You need to be testing new creatives constantly. What works one week might be dead the next. You need a system for producing a steady stream of authentic, native-looking video content. If you're not prepared for that, I'd suggest you stay away from the platform for now.

I've detailed my main recommendations for you below:

So, to bring it all together, here is a step-by-step plan. Don't even think about step 4 until you have done a proper job on steps 1, 2, and 3. Most agencies will jump straight to 4 and 5, which is why they fail. The strategy is the hard part; setting up the campaigns is relatively easy once the strategy is solid.

As you can probably tell, there's a lot more to running succesful ad campaigns than just boosting a post or putting a budget behind a video. It's about a deep understanding of your customer, the numbers that drive your business, and the specific culture of each ad platform. Getting it wrong can be incredibly expensive, but getting it right can completely transform your growth trajectory.

This is where expert help can make a huge difference. We've spent years in the trenches, running campaigns for businesses from early-stage SaaS startups to established eCommerce brands, figuring out what works and what doesn't. We've seen the costly mistakes so you don't have to make them.

If you'd like to have a chat and get a second pair of expert eyes on your specific situation, we offer a completely free, no-obligation 20-minute strategy call. We can go through your offer, your customer profile, and give you some actionable advice you can implement right away. There's no hard sell, just genuine help.

Hope this helps!

Regards,

Team @ Lukas Holschuh