Quantifying TikTok’sImpact onSalesand BrandGrowth
November,2024
Executive Summary
THESTRATEGICVALUEOFTIKTOKFORBEAUTYBRANDS
TikTok has emergedas a disruptiveforce in digital marketing, capturing the attention of millions of usersworldwide.
Forbeautybrands, which relyheavily on visual engagement, thisplatformoffersanunprecedentedopportunityto connectwithconsumersinwaysthatarehighlyinteractive andorganic.
However,measuringTikTok’sdirectcontributiontosales, traffic,andROIremainschallenging.
This white paper demonstrates how Kiko Milano, a global leader in the beauty industry, used a Marketing Mix Model (MMM) to unlock TikTok’s value across multiple sales channels.
Conducted by GroupM, this study provided Kiko Milano with actionable insights on how to maximize both paid media efficiency and organic growth, specifically within the highly competitivebeautymarket.
At Kiko Milano, theeffectivenessof platformslikeTikTokis evaluated not only through metrics such as views and engagement but primarilythroughtheirdirectimpacton salesandstoretraffic. Thanks to the MarketingMixModeldevelopedwithGroupM,it is now possible to preciselymeasurethe effectof TikTokcampaignson omnichannelsalesandorganictraffic. This approach enables more informed investment decisions that align with goals around brand awareness, customer engagement, and sales. With advanced analytics, KikoMilanocanstrategicallyoptimizebudgets,adaptto keyperiods,andstrengthenbrandpositioningon socialmedia, enhancingtheoveralleffectivenessof itsdigitalpresence.
CECILIASCHENA Chief Marketing Officer KIKO Milano
KEY INSIGHTS
THESTRATEGICVALUEOFTIKTOKFORKIKOMILANO
• TikTok accounts for 11.5% of e-commerce sales despite representing only 6% of total media spend
• The platform contributed to 5.7% of in-store retail sales, positioning it as a key driver of omnichannel success
• TikTok’s organic traffic generation outpaced social mediaplatforms by 45%, proving its effectiveness in boosting unpaid brand engagement.
These findings show that beauty brands have a clear opportunity to optimize their media mix and realize significant gains by leveraging TikTokstrategically.
Source: GroupMItaly MMManalysisfor KIKOMilano, 2024
The Challenge
WHYACCURATEMEASUREMENTMATTERS FORBEAUTYBRANDS
ANewMediaLandscape, ANewAttributionProblem
For
beauty brands,
going beyond
engagementmetrics
and last-click attributionon TikTok is essential to measure true sales impact across e-commerce and physical stores.
Beauty brands are no strangers to leveraging digital and social media for marketing purposes. However, as consumer behavior shifts, these brands face mounting pressure to measure the real return on investment (ROI) of their media efforts across multiple platforms. CEOsandCMOsneedtoknow wheretheirbudgetsgeneratethehighest sales lift,notjustine-commercebutalsoin retailenvironments.
ALICEPORRATI Head of Measurement Southern Europe - TikTok
One of the biggest obstacles for Kiko Milano was understanding TikTok’s role within a multi-channel environment. Historically, TikTok's effectiveness has been hard to isolate, given the platform's indirect influence on organictraffic and the limitations relatedto thelast-clickattributionmodel. Furthermore, traditional media models have struggled to keep pace with TikTok's fast, organic, userdriven content ecosystem.
KeyProblemsIdentified:
• Complexattributionin a multi-platform strategy. How does TikTokdrive sales beyond the last click model?
• Measuringbothpaidandorganicimpact, balancing TikTok’s immediate conversion potential with its organictraffic-driving power.
• Omnichannel performance. How to assess TikTok’s influence on in-store sales versus its role in driving e-commerce growth.
The Approach
MARKETINGMIXMODELINGFORPRECISIONANDCLARITY
BringingData-DrivenCertaintyto MarketingInvestmentDecisions
Beauty brands are no strangers to leveraging digital and social media for marketing purposes. To address these challenges, Kiko MilanoadoptedarobustMarketingMix Model(MMM), an econometric technique designed to quantify the effect of each marketing channel on overall business outcomes. By integrating granular media data across digital and offline media channels, GroupM was able to analyze how Kiko Milano’s marketing investments translated into actual sales, both online and in-store.
KeyComponentsoftheMMMFramework
MarketingMixModelling is a key statisticalapproach to optimize marketing levers and getthemostfrom communicationinvestments.
By combining the strengths of MMM, our TikTok partnership, and our analytical expertise, we created a measurement framework that’s tailoredto KIKO'sspecificbusinessgoals
1. DataAggregationandCleaning: Media investment data from TikTok, social platforms, digital video, and offline channels like TVwere collected. These were correlated with weeklysalesdataand organicwebtraffic.
2. MultivariateRegressionAnalysis: A detailed regression model was built to isolate TikTok’s impact, while controlling for external factors like seasonality, macroeconomic conditions, and competitor activity.
3. SaturationandEfficiency Curves: The model provided a saturationcurve to determine when additional spend on TikTok would reach diminishing returns, ensuring media budget optimization.
4. Cross-channelBenchmarking: TikTok’s contribution was analysed alongside other platforms to determine its relative efficiency in driving both sales and organic traffic.
This data-driven approach allowed Kiko Milano to not only measure incrementalsalesuplift from TikTok but also identify opportunitiestooptimize mediaspendacross channels.
Source: GroupMItaly MMManalysisfor KIKOMilano, 2024
ANDREALIMBERTI Head of Measurement GroupM
The Results
TIKTOK QUANTIFIEDIMPACTONSALESANDROI(1/2)
The results from the Marketing Mix Model provided clear evidence of TikTok’sabilitytodrivemeaningfulbusinessresultsforKikoMilano: StatisticalAnalysisConfirmsTikTok’sOutsizedContribution
KeyFindings:
1. TikTokPerformance:
• TikTokdrove 11.5%ofmediadriven e-commercesales.
• It also contributed to 5.7%ofmediadriveninstoreretailsales, a significantlift considering TikTok’srelatively smaller investment.
2. ROIComparison:
11,5% E-COMMERCE
5,7%
RETAIL
• TikTokdelivered a 32%higherROIfor retailsalescompared to social media platforms.
• In e-commerce,TikTokoutperformeddigitalvideoby generating a 60%higherROI, solidifying its place as an efficient sales-driving channel.
• TikTok acts as aVideoplatformin terms of budgetsaturation. TikTokMedia budget could even be doubled without encountering impacts on media performance
The Results
TIKTOK QUANTIFIEDIMPACTONSALESANDROI(2/2)
3. OrganicTrafficImpact
• TikTokcontributed to 10%ofKiko Milano’sincrementalorganic webtraffic, a testament to its strength in driving unpaid engagement.
• The platform outpacedsocial media by 47%ingenerating organictraffic,with TikTokusers actively engagingwith the brand even outside paid campaigns.
4. PromoCampaignEfficiency
TikTokpromo campaignswere 48%more efficientcompared to other digital channels. This makes TikToka high-performing platform for promotionalcampaignsduring peak periods such as BlackFriday.
5. ProductandCollectionLaunches
TikTok was11%moreefficientfor launchingnew product collections compared to other platforms. This indicates TikTok’sability to deliver good performance for productandcollection campaigns during high-consumptionperiods such as Christmas.
The Models
ATAYLOR-MADESOLUTIONDESIGNEDAROUNDKIKOMILANO'S NEEDS
GroupM framework is built to provide valuable strategic insights to support both budget allocation and media planningoptimization Adhocframeworkdesignedtomeetclientbusinessneeds
Methodologydetails:
1. TheMMMframework
• SeparateMMMhave been put in place on Kiko Milano sales and website organictraffic to measure TikTokimpact on both kpi's
• About sales modeling, twodifferentmodels have been developed, one on storerevenuesand one on e-commercerevenues, to evaluate the different responsiveness to TikTokactivities on the two acquisitionchannels
2. StatisticalRobustnessandModelConfidence:
• The R-squared value of the regression model (0.90) demonstrates a high degree of reliability, meaning 90% of the variance in sales can be explained by the media spend and external factors includedin the analysis.
• The model included confidenceintervals for each media channel, ensuring statistical rigor and indicating that TikTok'sresults were not due to random fluctuations.
• A varianceinflationfactor(VIF) test was applied to checkfor multicollinearity, ensuring that the individual contributionsof each platform were clearly separated and robust.
These results provided Kiko Milano with aclear,data-backed understandingofhowtoallocatemediabudgetsforfuturecampaigns andmaximizesalesimpact.
Strategic Recommendations
MAXIMIZINGTIKTOK’SVALUEFORBEAUTYBRANDS
Kiko Milano’s case study provides a blueprint for beauty brands seeking to capitalize on TikTok’s growing influence for business. Here are key strategicrecommendationsforbrandstomaximizetheimpact: DrivingBusinessGrowththroughSmarterMediaInvestments
1. MaximizePromoCampaignsonTikTokDuringPeakSeasons
TikTok’spromo campaigns are 48%moreefficientthan those on other digital platforms. Beauty brands should leverage TikTokfor promotionsduringhigh-trafficperiodslikeBlackFridayto capture organictrafficand maximize conversions during peak shopping moments.
2. DoubleDownonTikTokforProductandCollectionLaunches
With a proven +11%higherefficiencyfor collectionlaunchesand a +34% higherefficiencyforproductcampaigns,TikTokis highly effective in driving both direct conversions and organicengagement. Brands should exploit TikTokpower launchingnewproductsand collections,particularlyduringperiodsofhighconsumerattention
3. OptimizeMediaSpendwithData-Driven
Insights
Use saturationanalysistodeterminetheoptimalTikTokinvestment levelbefore diminishing returns set in. Kiko Milano analysis suggested that there was still room for spend to grow without reducing efficiency, indicating untappedpotentialforfurtherinvestmenton TikTok
4. Long-TermStrategicFocus
Beyond short-term promotions,brandsshouldmaintainalong-term presenceonTikTokto benefit from its ability to drive sustained organictraffic and brand engagement
Source: GroupMItaly MMManalysisfor KIKOMilano, 2024
Conclusion
TIKTOKASACRITICALCHANNELFORBEAUTY BRANDS
MAXIMIZINGSALES,BRANDENGAGEMENT,ANDROI
The 40%ofTikTokusers1 show an active interest in beauty and cosmetics, with Beauty&Personal Carerankingas the #3most-viewedcategory2 in Italy based on video views in H1 2024.The 'Beauty' hashtag3 has experienced impressive growth, with organicvideoviewsupby+70%and organic videocreationincreasingby+103%YoY.
This growth underscores TikTok’sroleasa transformativechannelforbeautybrands, uniquely combiningefficient paid media performance with extensive organicreach.
The Marketing Mix Model demonstrated that Kiko Milano’s media investments in TikToknot only outperformed other platforms but also provided crucialinsightsintohowtooptimizefuture spend.
For beauty brands aiming to stay ahead in a competitive market, TikTokrepresentsan essentialchannelforgrowth. With the right datadriven approach, CEOsandCMOscanconfidently allocatebudgetsthatmaximizebothshortterm salesandlong-termbrandequity.
As this case study with Kiko Milano reveals, the futureofbeautymarketingliesinmastering TikTok,combiningpaid and organic reach, delivering high-impactbusinessresults.
Source: GroupMItaly MMManalysisfor KIKOMilano, 2024; 1 GWI, IT, Q323-Q224,TikTok Users18+, TikTok'suse of this datadoesnotequateto an endorsement; 2 TikTok MarSci internal dataH124; 3 TikTok MarSciinternal data2023
About GroupM Choreograph
Choreograph is theglobaldataand technologybusinessunitinGroupM.It unifiesthe data,analytics,technology consulting,andtechnologyexpertise across the GroupMnetwork ina dedicatedunitthat enhancesdataandanalyticsservicesand deploybest-in-classmediaplanning, activation,andmeasurementtooland methodologies.
In Italy, the Choreographteamhelpsclients leveragedatatoimprovemediaand contentconsumptionexperiencesand expandandengagetheir audiencesmore effectively.The team providesthe following keyservicesinsupportofGroupMclients andagencyteams:
Data&Tech:forthe designand developmentof tailor-madetechnology anddatainfrastructureandsolutionsfor clients
Measurement:for the managementand analysisofdatausefulfor measuringand quantifyingthe impactofdifferent communicationlevers onclients’business ContentAnalytics: for the management andanalysisof datausefulfor measuring andquantifyingthe impactsofsocialmedia andbrandentertainment onclients' business
BusinessIntelligence&Insight:for the interpretationof mediaandconsumer researchdatausefulfor understandingthe contextandimplicationoncustomermedia business
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