Did you know that YouTube has over 2 billion users globally? Aside from this, it is the world’s second-largest search engine after Google and the largest video-sharing platform in the world. With so many people using YouTube daily, it is the best platform for marketers and creators to advertise their products and services. Bid on the video according to YouTube advertising cost, and promote the ad video.
YouTube Advertising is a potent marketing tool that can help your brand make much money when used correctly. It significantly affects consumer behavior and allows users to buy a product through its video content. The cost of YouTube ads might be exponential based on demand, but it gives ROI.
The step-by-step guide will help you understand how YouTube advertising cost and the different types of YouTube Ads work for the campaign.
Let’s start with the most common question.
How much does YouTube Advertising cost?
YouTube ads cost anywhere from $0.10 to $0.30 per click. But the question you need to ask yourself before running an ad on YouTube is, How much are you willing to spend on YouTube ads?
When you run an ad on YouTube, you must pay every time a user views and clicks on your ad. The YouTube advertising cost depends on the type of ad you choose, which we will cover in the next section. Of course, marketers can spend more depending on their marketing budget, targeting, video quality, and campaign goals.
How Does YouTube Ad Pricing Work?
YouTube advertising cost are calculated using a bidding system. Several factors affect YouTube ad cost, such as ad format, placement, industry competition, etc. To place an ad, one has to compete with other advertisers.
Here are the types of bidding formats:
- Cost Per View(CPV): The advertisers will pay when the viewer watches the YouTube video for at least 30 seconds.
- Cost Per Click(CPC): Advertisers must pay when viewers click on the ad.
- Cost per thousand Impressions (CPM): Advertisers pay when their ads get 1000 impressions or when the ad is displayed 1000 times.
- Auction-Based Price: The advertisers set their own bid, and based on their maximum bid, YouTube suggests ad placement.
Advertisers can start spending from $0.01 per view. They can pay according to the Google Ads spending Limit based on the campaign goals. Let’s say you can spend twice your average daily budget; monthly, you can spend 30.4 times the daily budget.
What Factors Affect the Cost of YouTube Ads?
The YouTube ads cost is affected by the bidding strategy, types of ad formats, and targeting options that advertisers may use. Let’s understand how YouTube Ads costs are affected:
Biding strategies
- Advertisers compete for better ad placement in the YouTube Ads bidding system. The bidding strategies must suit both the ad spot and the pricing.
- The higher the amount, the higher the chance of premium placement.
- Higher Bid values give a competitive advantage.
- High Bids place you in front of the target audience more than your competitors.
- Higher Bids consume the daily budget faster.
- Proper Bid Strategies give you a strong impression-to-click ratio.
- Your ads can get useless impressions, so you should optimize the budget.
Seasonal Ads Impact
Globally, there are many holiday seasons when consumerism increases. The bidding competition also increases during these peak seasons, such as Christmas or Black Friday.
- Analyze the local region’s season where you are targeting the audience.
- In seasons, the advertising cost increases due to the ad performance.
- People are likely to buy, which is a good time to increase the ad budget.
- During the season, the ad timing plays a crucial role.
- Some seasons are long, some are short; modify the budget based on hype.
- Audience behavior is fluctuating during seasons. Be ready to adapt to different strategies.
YouTube Ad Formats
YouTube has various ad formats, each of which gives brands different exposure. The ads are Skipable, skippable, bumper, In-Feed, Overlay, etc.
- Misaligned ad format, budget goals, and campaign goals affect the cost of the ads.
- Engaging and quick message delivery is the common factor in all formats.
- Mixing your campaign with multiple ad formats. (Don’t stick to one).
- Not segmenting the audience based on the format.
- The niche you are targeting affects the cost of YouTube ads.
- Not changing the ad format strategy based on the response can cost your budget.
Types of YouTube Advertising
The ad type affects the YouTube advertising cost for the campaign. The bigger the ad space, the more the ad costs. Here are the different ad formats available for YouTube ads.
| Ad Type | Description | Best for |
| Non-Skipable In-Stream Ads | 15-30 second ads before content | Explaining product value with a sales pitch in less time. |
| Skipable In-Stream Ads | Ads that get skipped after 5 seconds | Product Recall, Elevator Pitch, Persuasion. |
| Bumper Ads | Non-skippable 6-second ads | Quick product awareness/ Branding |
| Masthead Ads | Premium ads appear on top of the YouTube homepage | Highly Visible, Massive branding. |
| In-Feed Video Ads | Appear in YouTube search results | Displaying to a niche audience |
| Outstream Ads | Mobile-only Ads on Google partner sites. | Attract website browsers. |
| YouTube Shorts Ads | Appear in YT shorts | Quick Product Display |
- Non-skippable ads: The ads appear before the content for 15-30 seconds and are placed mainly on TV devices. The ad type is placed to give a detailed product overview.
- Skipable ads: The ads are 2 to 3 minutes long; however, viewers can skip the ad after 5 seconds. The ads are targeted at the audience that is more likely to look into the product.
- Bumper Ads: These are 6-second long and non-skippable. They are a follow-up ad placed in front of an audience that has already interacted with the Ads and are just being reminded.
- Masthead Ads are premium ads that appear on the YouTube homepage. Brands that have a massive branding campaign or want high visibility use them.
- In-Feed Video Ads: The ads appear in the search results or feeds. When the audience browses the content, they see the ads. The ads resonate well with a niche-specific audience.
- Outstream Ads: YouTube is owned by Google, so YouTube Ads appear on Google partner sites. They are muted ads that appear on websites.
- YouTube Shorts Ads: This ad type has gained popularity recently. It is mostly used to describe the product or engage the audience with the main content or channel.
Additional YouTube Ad Formats
- Display ads: This type appears on the right side of your featured video and above the suggestions list. It is best suited to targeting the desktop audience.
- Overlay ads: These semi-transparent overlay ads cover 20% of your feature video. They are not a mobile-friendly ad type.
- Sponsored Cards: These cards display content related to the video. These ads show video-related products for users to click and purchase quickly. They are mainly used for buyers who are in the last stage of purchasing.
How Targeting Impacts YouTube Ads cost?
Advertisers who use targeting must adjust the campaign’s cost. Let’s understand the targeting types and how they impact ad costs.
In-Market audience targeting
This is a powerful way to reach an audience in the last stage of the buying journey. The audience intends to buy, and while the targeting type can be costly, it can place the product in front of the ideal audience.
Demographic targeting
The targeting feature lets you target a specific audience. The demographics include age, gender, parental status, and household income. The demographic feature makes ad placement relevant.
Affinity audiences targeting
Advertisers can plan long-term campaigns using affinity targeting. The targeting segments are based on interests and habits. This audience has a predictable buying intent, for example, Fashion or sports.
Targeting Match Customers
This custom-based targeting method targets their audience from their database. Retargeting makes pre-converted buyers more likely to buy new or existing products, increasing the campaign’s ROI.
Is YouTube Advertising worth the cost?
The overall ecosystem helps advertisers have a good ROI, making YouTube advertising worth the cost. Compared to other platform campaigns(Facebook and TikTok), the ad spend-to-return ratio is higher on YouTube. Multiple factors make marketing on YouTube profitable, but if advertisers narrow down to a single tactic that works, it is their campaign strategy.
The right campaign strategy can make the ad profitable with just a decent amount of money. Some advertisers spend thousands of dollars and achieve only 40% of their goals, while others achieve 60-70% using the same budget. The reason is that their approach to running ads is simple.
Google Ads has tons of metrics to make your advertising worth the cost. The insights provided are valuable as advertisers can change their strategy while running the campaign. These give advertisers confidence to make bold moves in running a successful campaign.
How to create a YouTube Ad campaign?
As a beginner, you may not have the proper guidance when promoting video on YouTube. But that’s not a matter to worry about! A few simple steps will help you create a successful YouTube Ad campaign.
1. Set up a Campaign Team
You can do YouTube marketing alone or have someone run your campaign. The trick is to have a dedicated team. The team can make the campaign a maximum impression at an affordable cost.
The team can analyze whether the ad placement and type are optimal for their budget and what they will spend. Ultimately, the YouTube ad campaign is all about having the right approach, so your priority should be to have a campaign team.
The most effective method is to hire someone, but if you want to understand your market, you can start with a minimum budget.
2. Find the target audience
The campaign team will place the ads in front of your target audience. Clearly define the goals and achievable tasks. This will help the team to identify the ideal audience. Here are a few ways to find an audience.
Keywords: The YouTube ads can be placed using keywords that the viewers search for on YouTube.
Topics: Viewers interact with specific content in search results and feeds. Segment this audience for a particular ad type.
Remarketing: Target people from your database who have interacted with your ad content.
Demographics: In this section, you can target the audience using age, gender, parental status, and Income.
3. Make Ad Videos
Now that you have set up the campaign team, they know how to find the ideal audience. It’s time to make the perfect YouTube video ad. A perfect ad involves:
- High-quality video production for professional appearance.
- A blend of creative, engaging, and resonating video content.
- The video should align with the Ad placement.
- Create an Ad video that provides value to viewers. (Viewer-Benefit).
- The ad message should be according to Ad Format(Bumper, Skipable, etc).
4. Create CTAs or a Landing Page
There are interested consumers, and they will try to look at the product. Ads need a call-to-action (CTA) that leads the user to a landing page where they can explore everything about the product.
The landing page is the advertiser’s ground. It should give the user what they came for, describe everything in detail, but not be too complex to cause disengagement.
Try creating a landing page for each type of ad format. A generic landing page will not satisfy every viewer, such as someone who has watched the whole 30-second ad or someone who came from the bumper ad. Each viewer will resonate differently with your content.
The CTAs are just the attention-grabbing greetings, while landing pages are the whole sale pitch.
5. Analyse the ongoing campaigns
As we know, Google Ads provides metrics for the ongoing campaign. These responses are designed for a reason. Advertisers should be able to formulate strategies based on the campaign response.
A well-planned campaign goes accordingly. Even if the campaign does not present the desired result, advertisers can monitor and shift it for the best results.
Try using funnel stages. This will help you identify at what stage the campaign has not performed according to plan. Segmenting into small stages will make it easy to analyse. The advertiser will be unburdened from changing the overall strategy.
Why choose YouTube for advertising?
Gigantic reach
With over 2 billion users, YouTube opens up endless opportunities for advertisers to reach millions of audiences at the same time. Because of its user-base, YouTube is one of the best video advertising platforms because of its diverse reach.
Purchase behavior
YouTube plays an essential role in influencing a consumer’s purchasing decision. Many brands claim that YouTube influenced their customers into purchasing their products. On YouTube, consumers can watch videos of the products they want to buy and understand their usage correctly before actually buying them.
Right audience
YouTube Advertising allows marketers to reach the right audience with the right message at the right time. Through analytics, you can easily reach your target audience by creating appealing video content and sharing your brand’s aim and vision with them.
The aim of running ad campaigns on YouTube, aside from monetary gains, is to bring more traffic to your channel and increase views on your YouTube channel. The one thing you can do to increase your engagement rate is to buy YouTube views and buy YouTube subscribers if required.
Conclusion
YouTube has a massive audience base, and placing an ad in front of the target audience of a billion users requires campaign planning and strategies. The YouTube platform has different ad placements, each serving different campaign goals. Advertisers can bid strategically using various parameters such as season, timing, niche-specific needs, and multiple metrics from YouTube Studio and Google Ads. Use the metrics to plan the campaign with predefined goals and persuade the audience to your landing pages. At last, create ad videos with a buyer persona that provides value to users.
Frequently Asked Questions
What are the 6 types of YouTube Ads?
The YouTube Ad formats are:
- Skipable In-stream Ads.
- Non-Skipable In-stream Ads.
- Bumper Ads.
- In-feed video Ads.
- YouTube Shorts Ads.
- Masthead Ads.
Which YouTube Ad is the best?
Bumper ads are the most commonly used because they are cost-effective and give exposure in just a few seconds.
What is the popular content format on the YouTube platform?
Music and entertainment are popular content forms on the YouTube platform.
Which type of YouTube channel grows faster?
Gaming and Entertainment channels have been seen to grow faster on YouTube.
How can I advertise on YouTube?
You can create ad campaigns for your videos using promotions on YouTube Studio.
