Despite its popularity, TikTok’s ad revenues are relatively small compared with those of the social behemoth Meta. This year, we expect US ad revenues on TikTok to reach $10.42 billion—that’s about 16% of the $64.63 billion in ad revenues we anticipate for Meta. But CPMs on TikTok are inching closer and closer to Meta’s each year, per our forecasts. Advertisers spending on TikTok may be looking for a clearer ROI as those prices rise.

The gap between TikTok’s and Meta’s rates is getting smaller. In Q1 2022, the difference between the average CPM on TikTok and Meta was $8.62. In Q1 2025, we expect that difference to shrink to $5.50. As TikTok commands higher rates, advertisers will expect more from the platform. “The engagement on TikTok has improved, so even though CPMs have crept up a little bit, we’re okay with it because, over time, we’ve seen better engagement,” said Katya Constantine, CEO of agency DigishopGirl Media.

TikTok is trying to attract more performance marketing dollars. Many brands saw organic success on TikTok when the app first started taking off in the US. But as it matures, more marketers are investing ad dollars into the platform—which is partly why we expect its rates to see double-digit growth throughout this year and next. “It has shifted in the last year or two to being a must-buy,” said Carrie Tropeano, Mekanism’s chief media officer. The platform has also been rolling out measurement tools that make advertising more trackable.

A TikTok ban in the US would increase CPMs on other social platforms. Ad spend would be transferred to Instagram Reels and YouTube Shorts, lifting prices there. A US ban could happen as early as mid-January, but as of now, marketers are operating as if it’s business as usual. Only about a third (32%) of people in the US support a government ban on the app, according to Pew Research from July/August. (Editor’s note: Our forecast is premised on the assumption that TikTok will remain available in the US through at least Q2 2025, either under ByteDance or following a sale.)

Read the full report, Social Ad CPMs Forecast 2024.