Your Guide to YouTube Ads: How Much Does YouTube Advertising Cost?

Are you looking to expand your business outreach? Do you want instant access to your targeted audience? YouTube advertising is the answer to all your needs.

YouTube is ranked as the second-most visited website globally behind Google (which owns it) with nearly 1.9 billion monthly users. This equates to almost one-third of the world’s population thus making YouTube the ultimate platform to boost your brand visibility and outreach. In other words, YouTube can help you to reach out to a huge audience.

Regardless of your business type, size or scope, YouTube advertising is possibly among the best options to spread the word about your products and services and compete with an edge. It’s true that advertising on YouTube comes with a cost but the benefits it offers are worth every dollar spent. Continue reading to learn more about YouTube advertising and how much it can cost you.

Table of Content & Quick Links

Is YouTube advertising worth the cost?

Given the level of popularity that this video sharing platform enjoys, business owners must incorporate it into their digital marketing strategies. Here are some interesting YouTube statistics to give you a clear idea of the user base of this platform and the advantages of advertising on it:

• YouTube gets nearly 30 million visitors daily
• Nearly 5 billion videos are watched every day on YouTube
• On average, 8/10 people aged between 18 to 65 watch YouTube videos
• Mobile advertisements on YouTube are 84 percent more likely to hold the attention of the user than a traditional TV ad
• Approximately 68 percent of YouTube users watch videos on this platform to help them make purchase decisions.

Undoubtedly, with such a large user base of different demographics spending so much time on YouTube, your business can benefit a lot from advertising on this platform.

YouTube—An Effective Social Media Platform for Advertising

Let’s dig deeper to understand the effectiveness of YouTube advertising:

Enormous Reach 

Internet users can be divided into two categories; those that seek social interaction and those that seek information. In this respect, YouTube provides a platform like no other that allows online content to reach users in both categories.

In fact, statistics also show that YouTube has a reach greater than broadcast or cable TV networks on mobile alone, which makes YouTube an extremely effective advertising platform. This means that by advertising on YouTube, you can enhance your brand awareness and reach a large audience.

Influence on Purchase Decisions

As mentioned above, YouTube ads have the power to affect viewers’ purchase decisions. According to a YouTube insight report, statistics show that nearly 66 percent of makeup purchasers, 72 percent of auto purchasers and 62 percent of smartphone buyers indicate that their decisions were influenced by YouTube ads and videos. This goes to show that well-designed and intelligently placed ads on YouTube can influence prospects positively and get the sales that you desire.

Advanced Targeting

Advanced targeting can deliver numbers. And that is what you can enjoy by advertising on YouTube. Advanced targeting on YouTube gives you a chance to target your audience without showing your ads to people who are the least interested in your products. This just wastes time and money, which is something you don’t want.

On YouTube, you can offer ads to your target audience, based on demographics such as:

• Age
• Gender
• Interests and
• Parental status

This ensures that your ad reaches only those who have an interest in your products or services. Another notable feature of YouTube is the custom affinity audience, which can help you target your audience even more specifically. For example, let’s say you’re a seller of Dodge Muscle Cars. Instead of targeting car enthusiasts, you can target people who are specifically interested in buying the cars that you sell by using this feature.

Wait, there’s more! Apart from targeting consumers, you can also make sure that your business ads focus on specific channels and videos that are relevant to your market. This can further increase the exposure and reach of your business ad.

High Returns on Investment 

As per a meta analysis conducted by different companies like GfK, MarketingScan, BrandScience, and Data2Decisions, YouTube ads offer more returns in comparison to TV ads. This proves the effectiveness of advertising on YouTube.

However, the returns may vary, depending on your investment. This is because there is a wide range of price points for YouTube advertising.

Running an ad on YouTube’s home page can cost you more as compared to the pre-roll ads that viewers can skip after 5 seconds. Read on to learn more about different types of YouTube ads and how much YouTube ads cost.

YouTube Advertising Cost Breakdown— How Much Does a YouTube Ad Cost?

Determining the estimated YouTube advertising costs is a huge factor that will affect your budget.  How much you need to spend depends on several factors. Different factors that are likely to influence the cost of advertising on YouTube include the following:

• Type of Ad
• Your bid
• Bidding selection
• Average CPV (Cost Per View)
• Your Budget
• Average CPM (cost per mile or cost per thousand impressions)

All these factors are likely to influence the rate of your YouTube advertising in numerous ways. For example, the bid that you place will have a direct impact on the cost of your ad as compared to the bid selection. When placing a bid, it helps set a definitive number for what you are willing to pay for a view or a click.

Simply put, the cost you are likely to incur is determined by the budget, average CPM and CPV. All this is dependent on your campaign goals and target audience.

Let us explain this further:

YouTube Budget

Based on the budget you set for YouTube advertising, there is a certain amount you will spend on your ads. YouTube allows you to set a daily budget and then calculate how much to spend on a monthly basis. Generally, you can place an ad on YouTube for as little as $1/day.

Average CPV

The average CPV (cost per view) on YouTube is around $0.05 to $0.30. The views generated will be counted towards your overall viewer count on YouTube. So, the cost will be determined by the bids you place, your budget and the competitiveness of your target audience.

Average CPM 

This refers to the cost that you will have to pay for 1000 impressions of your YouTube ad. This cost is also variable, depending on the success of your ad.

YouTube Ad Types—Formats to Choose From

So far, what we have understood is that the cost of advertising on YouTube is not standard. In fact, business owners experience different costs, depending on numerous factors discussed above. One more factor that plays a significant role in determining the cost of YouTube advertising is the type of ad or format you select.

The format of a video influences the cost of your ad campaign on YouTube. In general, you will pay more for bigger ad space and greater ad exposure. Here is a list of the variety of formats for advertising on YouTube:

Display Ads

These ads are displayed above the list of YouTube video suggestions to the right side. Such ads are likely to run on all areas of YouTube except the home page. If someone is interested, they may see the ad, thus getting you a click.

Display ads only appear on desktops and have a spec size of 300×250 or 300×60 pixels.

Overlay Ads

As the name suggests, these ads overlay a YouTube video. They appear on the lower 20 percent of a video. The ad can be viewed by an audience watching YouTube on their desktop computers and laptops. Also, viewers of overlay ads can exit them at any time. One catch is that such ads can lead to false clicks and many YouTube viewers don’t enjoy viewing them.

TrueView Ads

TrueView is basically an advertising format where the advertiser gets charged if the ad is viewed. However, if the ad is skipped, no charges apply. The best part about a TrueView ad is that it is affordable and safe. The user can view the ad if they are interested in seeing it; otherwise, they can skip it. So, it’s a win-win situation in both ways.

The advertiser must pay once the ad is viewed. So, if the ad is actually viewed, chances are that the prospect is interested in purchasing the product/service and is likely to convert into a sale.

TrueView ads can be further divided into three categories:

· Skippable Video Ads

These types of ads can pop up any time—during, after or even before video content. They take up the entire video display box, but they come with a countdown timer. This countdown timer allows viewers to skip the ad if they want to. The skip button usually appears after displaying the ad for five seconds.

Skippable ads can be viewed on desktop computers, mobile devices, and game consoles. They can be

played in video player. They are also known as in-stream ads. Also, the advertiser is charged when the user watches the ad for 30 seconds or the whole video or if the user interacted with the ad, such as clicked on the banner.

The in-stream TrueView ads are displayed in two placements:

YouTube video

Partner sites or applications for GDN (Google Display Network)

· Discovery Ads

These TrueView ads have three placements:

YouTube search pages

The video watch page

Mobile app home page for YouTube

The advertising block comprises a header that has a maximum of twenty-five characters, which is followed by a description of thirty-five characters and a thumbnail. So, if you are wondering how much advertisers pay YouTube for discovery ads, then let us tell you that you will be charged each time a user clicks these ads.

However, it is worth every dime charged. Here’s why we say that:

The top benefit of TrueView discovery ads is that they are only shown to the audience that searches for specific relevant requests. Therefore, these ads are more targeted, thus you are likely to attract viewers who are generally interested in your products and services, which further helps improve your conversion rate and overall financial bottom-line.

· TrueView for Reach 

In this ad format, advertising blocks are strategically placed at the beginning, middle and end of a video. This ad format on YouTube is exclusively designed to optimize the number of views for your advertisement and increase brand awareness. The length of this video ad is 20 seconds.

What makes this format exceptionally effective is that it helps explain your brand message and offers it in a simple and crisp manner without frustrating viewers. It spares you and the viewer from an extensive ad. Needless to say, this 20-second brief has proven wonders for business owners by helping them attract and convert prospects into buyers.

Non-Skippable Ads

Unlike skippable ads, non-skippable ads can’t be skipped. This means that viewers have no choice but to see them in order to access the video that they want to watch. Usually, the time duration of these ads is 15 to 20 seconds. However, this can vary, depending on your geo location.

YouTube has shortened this duration from 30 seconds to a maximum of 20 seconds in order to deliver a better user experience.

Although many viewers find such ads annoying as they can’t be skipped, they do help business owners achieve their marketing campaign goals. As the ad can’t be skipped, this guarantees that the user will watch the entire ad, thereby receiving the advertising message that you want to deliver, and chances are that they may take the desired call to action.

Non-skippable ads on YouTube can be classified into 2 categories:

· Pre-Roll Ads

Pre-roll ads have a duration of 20 seconds and are always placed at the beginning of the video.

· Mid-Roll Ads 

These ads are placed in the middle of a video (if the requested video is 10 minutes or longer).

Bumper Ads

Bumper ads have a time duration of six seconds. They can be watched before a requested video. These ads are quite effective in getting your business message across quickly as they are short and to the point. Other advantages of bumper ads are that they have a soft variation of the non-skippable ads, thus making them less annoying. These advertisements are charged on a CPM basis. This further helps simplify the cost control process.

Sponsored Cards

Sponsored cards help advertisers run ads that are specifically targeted to and aligned with requested video content. These ads feature products that are going to appear in the video. Put simply, the ad acts as a teaser of the product in the video.

As each ad format is different from the other, the cost of your campaign will vary, depending on the selection of your ad type(s). In some cases, you may have to pay if the ad has been viewed, while in other situations, you may only have to pay if the ad has been watched for 30 seconds or more.

Your target audience may also influence the cost of your YouTube advertising. You are likely to pay more if your target audience is competitive. By competitive, we mean that you have a bunch of competitors targeting the same market on YouTube. But don’t worry, you’ll never have to pay over your bid selection.

How Advertisers Can Create Powerful and Result-Driven YouTube Ads

As YouTube continues to be a popular social media platform, you must focus on tapping it to maximize your profits. Here are some steps that we’d like to share with you so that you can create successful ads on YouTube:

Work With a Reliable and Experienced Company to Run Your YouTube Ad Campaign 

Running a YouTube ad campaign requires knowledge and time. In order to get the best results from the campaign, it is advisable that you work with an experienced company like SEO Resellers Canada. Working with the right people can help save your time and choose the best ad format, according to your audience, budget and campaign goals.

Determine Your Target Audience 

To ensure the success of your YouTube ad campaign, it is important that you are clear who your target audience is. You can determine your target audience in different ways, such as:

• Demographic groups like age, income, parental status, and gender.
• Interests such as topics and information your audience is interested in viewing through video content.
• Keywords such as show ads on YouTube, based on phrases and keywords that your audience searches on this platform.

Invest in Quality YouTube Ads

Quality can’t be compromised. To achieve the best results, it is crucial that you create high-quality advertisement videos on YouTube. This is the only way to increase customer engagement and ensure that they watch the entire ad without skipping it. Poorly filmed or low-resolution content can be a turn off for people. So, invest in good quality videos to provide value to your audience and get more returns.

Determine Your YouTube Campaign Goals

Before shooting your ad, make sure that your advertising goals are clear. For this, set a goal you wish to achieve with your YouTube ad. This will further help you to create an ad that conveys your message across and helps you realize your goals. Based on your goals, you can select the right ad format.

Keep Ads Crisp

It is advisable that you create short and crisp ads. Long advertisement videos make people lose focus and they may not even watch it. As a rule of thumb, keep your advertisement 45 seconds or less. Another great tip here is to design your message in such a way that even if the audience has the opportunity to skip the ad in 5 seconds, you still get your message across.

Create Landing Pages Relevant to Your Ad

What some advertisers overlook is the need for landing pages for their YouTube ad campaign. This mistake keeps them away from churning the kind of profits that they desire. Therefore, we’d say when running a YouTube campaign, make sure that you direct your audience to the relevant landing page so that they get all the information that they need in one place. Your landing page should be customized with relevant information to your YouTube ad.

Monitor Your Ad Performance

Once your ad runs on YouTube, it is important that you monitor its performance. You can do this by accessing metrics, such as views, shares, subscriptions, and likes. These metrics will enable you to see how the campaign is actually performing. By keeping abreast of the ad performance, you can produce optimal results for your business.

Conclusion

In short, YouTube is a popular social media channel used by billions across the world. This makes it a suitable advertising platform for all types and sizes of businesses. You can enjoy amazing outreach and get your message across to your audience more effectively and creatively via YouTube. Not to mention, YouTube advertising costs are nothing compared to the business benefits this video platform has to offer.

ABOUT THE AUTHOR

Jamie Barton

CEO of NASN Licensing Inc. & Shopincities.com

Jamie has more than two decades of experience in accelerating brand visibility for online businesses. His company operates SEOResellersCanada.ca, a white label SEO and digital marketing agency. With his unique and actionable business processes, agencies and small businesses can successfully expand online operations without the traditional associated cost overhead.