A Real Look At YouTube Advertising, It’s Effectiveness, And Rates

To really come up with a comprehensive marketing campaign, you need to be actively advertising where your consumers are located. YouTube has quietly become the second most used search engine in the world. In fact, according to Hootsuite, 1.9 billion logged-in users visit YouTube every single month. As you can tell, if you are not actively advertising on YouTube already, you are missing out on a large portion of your prospective market. Because of the user base, every business should be actively investing in YouTube advertising. While you might be naturally thinking that creating YouTube ads and airing them might be expensive, it is actually incredibly affordable especially factoring in its effectiveness. Below, we will be going over how much advertising with YouTube costs, whether or not it is effective, how ads work on YouTube, and more.

Why Advertise On YouTube, To Begin With?

If you aren’t already convinced, you might be looking for more reasons to consider advertising on YouTube. While many big businesses are certainly hopping onto the YouTube bandwagon, it is actually a small business secret weapon. The fact is, the YouTube platform and their advertising program allow small businesses to actively advertise on the same platform as multi-million dollar companies. The basics of advertising are to actively advertise where your customers are located. If you aren’t convinced by the 1.9 billion logged-in users visiting YouTube every month, you should be swayed by the affordable nature of the advertising platform.

How Much Does Advertising On YouTube Cost?

When it comes to advertising with YouTube, you can expect to pay per view. With Pay Per Click, you are paying every time your ad is clicked. Whereas, with YouTube ads, you are paying per view. You can expect to pay anywhere from as little as 10 cents to 30 cents per view depending on several factors. Therefore, you can expect to pay as little as $100 for every 1,000 ad views you get.

The beauty of this kind of advertising comes with the ability to target your ads to a specific target demographic. After all, YouTube and Google are well known for being an ad-centric platform. Therefore, they generally have more information about their users than most companies. This makes it an ideal platform for a respective advertiser because you can narrow down your targeting based on specific criteria which can optimize your ad campaigns and really help you generate the best return on investment (ROI) with it.


1. Demographics

This is one of the more general options that you have available. Being able to target based on demographics can really cut down on the total number of viewers you advertise to and it can really increase conversions considerably. For instance, if you are selling something that specifically targets mothers, you won’t want to advertise to teenagers. By being able to actively target mothers based on parental status through demographic targeting, you should be able to optimize your campaigns to maximize potential ROI.

2. Topics and Interests

You will also be able to target based on specific topics that exist on YouTube. For instance, someone that is interested in video games might be more interested in products in the gaming industry rather than makeup.

3. Re-marketing

This is a really excellent targeting option that YouTube offers which will allow you to re-advertise to viewers that previously interacted in some way with your videos.

4. Keywords

Being able to optimize your ad campaigns with buying keywords is another excellent way to boost conversions. You will be able to show your ads based on the keywords related to a specific YouTube video which can really help to optimize your ad campaigns to convert at the highest rate.

5. Placement

You will also be able to specifically target certain channels or videos within websites.

Obviously, you will want to utilize a combination of the targeting methods above to really optimize your ad campaigns to maximize potential ROI. The more you can narrow down your targeting efforts, the fewer people you will have to advertise to. However, you will be able to optimize the audience to those most likely to convert which can really boost your returns sky-high.

Different Kinds Of Ads

YouTube offers several different types of ads that you can choose from on the platform.

1. Unskippable

There are unskippable ads that must be completed before a user can watch the video they clicked on. These ads can last up to 30 seconds in duration and they can appear at any point when the user is using YouTube. For this ad, whenever a viewer watches the ad, the advertisers pay for it and the creator for the view being watched gets a portion of it. This is a good option for those that really believe in the conversion potential for their ads and for those that have optimized targeting to the point where they are able to achieve high conversions. You must be confident when using this type because anytime your ad is displayed you will have to pay for it. Thus, these ads are typically reserved for businesses that have big ad budgets.

2. Display Ads

These are the ads that will appear on the right side of the video that is being watched. For these ads, you pay per click.

3. Overlay Ads

Overlay ads are advertisements that appear transparent on the bottom portion of the video. These ads don’t work on mobile and the user is able to minimize the ad at any time throughout the video.

4. Mid-roll Ads

These are the ads that you will only see on videos that are 15 minutes or longer in duration. These ads are typically spaced evenly throughout the video as sort of lite commercials and the viewer is unable to skip them.

5. Cards

There are also what is known as sponsored cards that can be displayed on the side of the video and they are typically relevant to the same topic of the video.

6. Pre-Roll Ads

These are the ads that you will see prior to a YouTube video being played. They are the ads where you have the option to ‘skip’ it once you hit 5 seconds in duration for the ad. While it is certainly disruptive, it is extremely effective and you only have to pay when your ad is played for over 30 seconds. Thus, it can be great for businesses with smaller budgets.

How Long Should YouTube Ads Be?

Ideally, you want to keep your ads anywhere from 15 to 30 seconds. This is the ideal time for pre-roll ads which are extremely effective. The key is to keep your ad engaging and informative. That way, you reduce the chances the user clicks away from your ad. The longer your ad is for a pre-roll ad, the higher the chances it will be skipped. But, creating a short, engaging, and informative ad can really increase engagement with your ad and maximize your conversions.

Will It Work?

The biggest thing YouTube has going for it would be the type of content it offers. After all, videos are the most engaging form of media because you are able to hit many more senses than using text. This is why video marketing has quickly become one of the most popular forms as it is simply much more engaging than other forms. Because videos have a higher level of engagement and because they are much easier to share on social media, they can really convert at a high margin and even go viral in some instances.

Keys To Succeeding With YouTube Advertising

1. Content

The main thing that you need to succeed on YouTube is high-quality content. Your videos must be entertaining and engaging. You can’t get away with a simple and boring ad. With YouTube, you need to be creative and create an ad that someone will not only enjoy watching but something they are going to want to take action on.

2. Type

You will also want to figure out which type you are looking to target. The type is a crucial component of your YouTube advertising strategy because you want to find something that not only performs the best for your content but also something that is going to fit your budget. The only way to know which type is best for your ads is through trial and error. Constantly test new ads and types and you will be able to see which converts at the highest rate for your ads.

3. Proper Targeting

This is perhaps the most crucial component of succeeding with your YouTube advertising efforts. You want to engage in appropriate targeting efforts to ensure that you are specifically advertising to the prospective customers that are most likely to convert. Therefore, you should be utilizing a variety of targeting strategies including keywords, demographics, and re-targeting to really ensure that you are able to optimize your conversions.

How Much To Allocate To This Type Of Advertising?

Because you have complete control over your YouTube ads, you will be able to set your own budget and control your returns. You want to calculate how much you are willing to spend on this type of advertising and break it down to a per-day basis. That way, you can set your budget based on the Cost Per View. Ideally, you want to start small and begin to increase your YouTube budget as you begin to figure out what works well. This will help you maximize your budget because you will be able to invest more and generate higher conversions with your ads.

In the end, YouTube advertising is one of the best advertising platforms that you should be looking to take advantage of as a small business. The best part about YouTube advertising is the fact that you can do it without a huge budget. While it helps to have a large budget, you can effectively narrow down your targeting efforts and engage in pre-roll ads which can help to optimize your spend even further. YouTube has simply become too large to ignore for marketers and business owners. It is time to take notice and actively engage in YouTube advertising to maximize your company’s bottom line.


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