YouTube is owned by Google and is the second most used search engine for video content. It’s a favorite platform for the masses that has content for everyone. You can search for entertainment, learning resources, fashion, media, and business.
One of the main reasons for YouTube’s popularity is that it’s a ‘’Video only’’ platform. People love watching, commenting, and sharing videos because it actively involves all senses evoking emotions.
With 2.1 billion active users per month, if you’re not advertising your business on YouTube, you’re losing a big audience that might buy your products and services.
You can advertise on YouTube through the Google AdWords network by bidding for ad placement. It isn’t easy to determine a cost figure, but an estimate is as follows.
- YouTube’s average cost-per-view is between $0.010 – $0.030.
- The average cost of reaching 100,000 views is around $2000.
YouTube is the second largest social media platform after Facebook, constantly growing since its launch.
In the present times, it has become vital for all big small, and medium-sized businesses to learn about YouTube Ad campaigns for great exposure and profits.
In the text to follow, you will learn about YouTube advertising, its costs, benefits and formats, and optimization.
Table of Contents
Why You Should Advertise on YouTube?
There are several reasons why you should advertise on YouTube. Some of the most important ones are;
- As mentioned above, it is the second-largest search engine after Google; you can reach a massive audience.
- YouTube is a free visual resource watched in 100 countries in 80 different languages.
- YouTube is accessible on all devices, such as smartphones, tablets, computers, and smart T.Vs.
- It is the best social media platform for businesses to advertise their products and services.
- YouTube’s algorithm pushes ads optimally for its viewers for better user engagement.
- Users are more likely to buy a product or service after watching it on YouTube than on traditional media channels.
How Much Do YouTube Ads Cost?
As mentioned earlier, It is difficult to determine the exact number of YouTube’s ad spend. Roughly, they can cost between $0.10-$0.30 per view if a viewer clicks on your video content or engages with It for 30 seconds.
If your video content is under 30 seconds, the viewer must watch it fully to count it as one view. Therefore, the longer the video, the more viewer count it has.
You must focus on what you’re getting from every penny spent (ROA) rather than only paying attention to the cost. If your ads are not getting the desired result, you must change your advertising strategy or adjust your budget.
The success of your YouTube ad campaign is dependent on the following;
- How would you target your audience?
- What types of ads are you utilizing?
- How much budget are you willing to spend?
YouTube Advertising Formats
Depending on your budget, there are various YouTube ad formats to target your audience. Each ad format has different pricing. Ad prices vary depending on the spot you are trying to advertise and the audience reach. Here are YouTube advertising formats.
- Skippable in-stream Ads. Skippable in-stream ads are the most popular ads on YouTube. A user can skip these ads after a 5-second interval of their appearance. These can appear before, after, or in the middle of the video content. The best part is that you only pay for those videos that viewers watched for 30 seconds or more.
- Non-skippable in-stream Ads. Non-skippable ads are watched before you can access the video content. The length of these videos depends on Google’s regional policies, somewhere between 15-20 seconds.
- In-feed video Ads. In-feed video ads are seen in your search feed along with other related videos. You can promote your videos among the others searched by your audience through this ad format. The main idea of this ad layout is to create videos that your audience is anxiously searching for using specific keywords. Additionally, promoting videos with in-feed videos can reach your viewers effortlessly.
- Bumper Ads. Bumper ads are 6 seconds short, on point, and contain a short message. Bumper ads are charged by cost-per-impression (CPM). You only pay for such ads after a thousand impressions. They are viewed before the video.
- Outstream Ads. Outstream ads are only for audiences that use YouTube on their mobile phones. These mobile-only ads are not viewed directly on YouTube as they appear on Google video partners.
- Masthead Ads. Masthead Ads are also known as reservation-only ads. These are exclusive and expensive 24-hour billboard ads displayed on YouTube’s homepage. Large companies with big budgets usually use these ads.
Note: If you’re unaware of which ad format is best for promoting your products and services, you should get help from a marketing professional for a better ROI of your budget. Companies may use one or more types to promote their brand.
Targeting Your Ads
Targeting the right audience is at the heart of any marketing campaign. Google AdWords network also allows you to choose a narrow audience for highly targeted results.
Choosing the right audience is critical for many reasons, such as:
- The success of your marketing campaign in terms of profits.
- Keeping the cost of YouTube ads down.
- To get the desired results from the ad campaign.
- Brand promotions and awareness.
- Region-specific advertising option.
Monitoring your YouTube channel will give you insights into your target audience’s keywords to find similar products and services. These keywords can help you target your audience through YouTube ad campaigns.
For example, if you are targeting Generation Z to sell funky-colored accessories, you must use phrases and words that teenagers use.
Google also provides options to engage with multiple audiences simultaneously to understand their content preferences based on demographics and location. It helps you find customers that need your products, filtering out the ones who will not buy from you.
Creating Your Video Ads
No matter how much your company can afford, if the videos are not up to par, it will burn out your budget and compromise your marketing strategy. Hence, it is important to understand how you can create video ads with best practices; here are some of them.
The Video Quality
Whether creating in-house video ads or outsourcing them, make sure they are made with high-definition video-making equipment. From the concept, story, visuals, and brand tone, all the stages of production should synchronize harmoniously with each other. Your ads should have the elements of professionalism, sophistication, and entertainment.
The expectation of your audience
If the video ads don’t meet your customer’s expectations, they will immediately skip them. You need to understand your audience to create ads that would get traction. For example, if your product is a skincare line for middle-aged women, your ads should appeal to them as sophisticated, elegant, and gracious.
Creativity is the most important factor while communicating with your audience. You must show the best side of your brand and company in a few seconds expecting your target audience to stop and view your ad. For example, One Dollar Club Shave ads are the best-trending ads to date.
Cult ads are creative and epic videos that the company doesn’t use as ads on the Youtube channel. Instead, it uploads these videos on its YouTube channel. Although these ads promote brands, they don’t fall under any of YouTube’s ad formats. For example, a famous Volvo FM ad presenting Jean-Claude Van Damme carrying out his famous split between two reversing trucks was a huge success.
Placement bidding is about finding the right ad spot for your brand on YouTube. Many other companies are also bidding for the same spot. Hence, the competition raises advertising costs.
To control your advertising budget, ensure that you have set your target audience before bidding. Otherwise, it will also increase the ad cost.
It is always recommended to start with a budget as low as $10 per day and increase gradually after experimenting with various options.
There are two bidding options.
Cost per view
Cost per view is charged when a viewer watches a YouTube ad for more than 30 seconds or engages with it in any way. You’ll also get charged if your ad is under 30 seconds but gets a full view.
Pay per click
In pay-per-click, you pay for every click on your ad. That is, you only pay for the clicks, no matter how many views you get. This option is only available for specific ad types.
Setting a budget is important, so you don’t get the aftershocks of an ad campaign. YouTube allows you to limit the maximum bid you are willing to pay per day. Indeed, it is best because you don’t have to monitor your bids if the average number of viewers increases unexpectedly.
YouTube also has two amazing bidding settings to keep your cost in check
- Maximum Cost Per View. While setting up your campaign, you will be requested to choose “maximum cost per view.” YouTube will show you various bids depending on your audience’s size. Hence, with a narrowed-down audience maximum cost per view may decline.
- Customizable Bids Per Format. Customizable bids are for you if you want to target more than one ad type. Otherwise, you can filter out this option if you prefer a single ad layout.
YouTube gives you a prediction of your views and cost. You can always return to your bids to tweak and readjust them for desired results.
How to Optimize Your YouTube Ad Campaign
Optimizing your YouTube campaign depends on two metrics
- View rate
- Click through rate
You can optimize your YouTube ad campaigns by
- Making compelling videos or revamping your old videos to increase the view rate.
- Influencer marketing; collaborate with famous YouTube influencers to promote your products.
- Experimenting with bidding. You should see the effects of high and low bidding and adapt to what works best.
YouTube Ads FAQs
How Much Does a YouTube Ad Cost?
The average YouTube Ad cost-per-view is between $0.10 – $0.30, and the average cost of reaching around 100,000 views is around $2,000.
Will YouTube Ads Work for my Small Business?
Yes, YouTube is an effective platform for marketing small businesses
How to Run a YouTube Ad?
Follow the steps to run a YouTube campaign
- Sign in to your Google Ads account
- Go to campaigns and press select
- Click the plus icon and select New Campaign
- Choose your goal from the given options.
What Should be my Minimum YouTube Budget?
Your budget should be at least $10 per day for a week, and later you can increase the budget depending on the results.