TikTok vs Instagram Ads for Local Business: Where Should You Spend in 2026?

May 17, 2026·Nataliia· 10 min read All posts

TikTok Ads for Local Business: A Wake-Up Call In 2025, 71% of small business owners admitted to struggling with social media ad management, while 62% of those same businesses reported feeling overwhelmed by the cost of running ads on Instagram. Meanwhile, TikTok's ad revenue surged by 45% in Q4 alone, outpacing Instagram's growth by 20%. If you're still wondering which platform to prioritize, it's time to take a closer look.

71↑

Small biz owners struggling with social media ads

2025 survey

62↑

Overwhelmed by Instagram ad costs

2025 survey

45↑

TikTok ad revenue growth

Q4 2025

20→

TikTok vs Instagram ad growth difference

Difference from Instagram

Getting Started with TikTok Ads

If you're new to TikTok, the first step is to set up a business account. You'll need to create a username, add a profile picture, and write a compelling bio. This will help you establish a presence on the platform and make it easier to track your ad performance.

To create an ad, follow these steps:

Go to the TikTok Ads Manager and select the ad format that best suits your business goals.
Choose your target audience based on factors like location, age, and interests.
Set your budget and bidding strategy.
Upload your ad creative, which can include videos, images, or even live streams.
Review and launch your ad campaign.

TikTok vs Instagram: Ad Pricing

When it comes to ad pricing, TikTok and Instagram have different models. TikTok uses a cost-per-click (CPC) model, where you pay each time someone clicks on your ad. Instagram, on the other hand, uses a cost-per-thousand impressions (CPM) model, where you pay per 1,000 times your ad is displayed.

Here's a comparison of the two platforms' ad pricing:

Ad Pricing Comparison

TikTok CPC

Instagram CPM

Average ad prices in Q4 2025

Pro Tip

Don't be afraid to experiment with different ad formats and targeting options to find what works best for your business.

Watch Out

Be cautious of ad fatigue, where your audience becomes desensitized to your ads. Mix up your content and targeting to avoid this.

DataLatte Take

At DataLatte, we've seen tremendous success with TikTok ads for local businesses. Contact us for a free audit and let's get started on growing your customer base.

Measuring Success on TikTok

When it comes to measuring success on TikTok, there are several metrics to keep an eye on:

Ad reach: This measures how many people saw your ad.
Ad clicks: This measures how many people clicked on your ad.
Conversion rate: This measures how many people completed a desired action (like making a purchase or filling out a form).
Return on ad spend (ROAS): This measures how much revenue you generated compared to your ad spend.

Frequently Asked Questions

Q: Is TikTok ads right for my local business? A: If you're looking to reach a younger audience or create engaging, short-form content, TikTok ads might be a great fit.

Q: How much does TikTok ad pricing vary by industry? A: Ad pricing can vary depending on the industry, but on average, TikTok's CPC is lower than Instagram's CPM.

Q: Can I use TikTok ads for local SEO? A: While TikTok ads can drive traffic to your website, they shouldn't be relied on as a primary local SEO strategy.

Q: Can I run TikTok ads without a large budget? A: Yes, you can start with a small budget and scale up as you see results.

Q: How do I track my TikTok ad performance? A: Use the TikTok Ads Manager to track your ad metrics and adjust your strategy accordingly.

Getting Started with DataLatte

If you're still unsure about which platform to prioritize or need help creating a winning ad strategy, consider reaching out to DataLatte for a free audit. Our expert team will help you determine the best course of action for your local business and create a customized plan to drive growth and revenue. Contact us today to take the first step towards a brighter future for your business.

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Frequently Asked Questions

Should I choose TikTok or Instagram ads for my local business in 2026?

TikTok is more cost-effective and growing faster. In Q4 2025, TikTok’s ad revenue surged 45%, outpacing Instagram’s 25% growth, while 62% of small businesses found Instagram ad costs overwhelming.

How much do TikTok ads cost for local businesses?

TikTok’s average CPC (cost-per-click) is $0.50–$1.50, lower than Instagram’s $1.50–$2.50. This makes TikTok a budget-friendly option, especially for businesses with limited ad spend.

Can TikTok ads target my local audience effectively?

Yes. TikTok offers location-based targeting, local hashtags, and “Near Me” ads to reach users in specific geographic areas, making it ideal for local businesses like restaurants or retailers.