May 11, 2022
If you’re running a business, it’s important to consider all advertising options available. And if you’re not already using YouTube ads, now is the time to start! However, before rushing into action, you must consider your budget and the expenses this decision involves.
In this article, you’ll find everything you need to know about YouTube ads cost, as well as how you can set up a successful ad campaign of your own.
How Much Do YouTube Ads Cost?
The cost of running an ad on YouTube depends on a few factors, which is why it’s difficult to put an exact figure on a YouTube ad. The ad price largely depends on the targeting and bidding options you choose and the type of ad you want to run.
The average cost-per-click (CPC) for a YouTube ad is $0.49, and the average cost-per-view (CPV) can be anywhere between $0.010–$0.030 with a daily budget of $10.
It’s important to remember the cost of YouTube ads depends on the way viewers interact with your ad. If the viewer clicks on your ad or watches it, the ad will be charged in relation to their action.
What’s great about advertising on this platform is that there’s no minimum or maximum amount YouTube requires you to invest in your ads. Usually, companies tend to invest $10 dollars a day into their ads, and as the company gathers more information about their ad’s performance, they tend to increase their spending.
|DID YOU KNOW: Companies can also advertise their products by using YouTube BrandConnect services and finding a suitable YouTuber to promote their brand, contributing to how much YouTubers actually make.|
What Determines the YouTube Ads Cost?
There are three major factors that determine your YouTube advertising cost: targeting, bidding, and ad formats. Before we dive deeper into explaining each factor, we should mention that when developing a YouTube campaign strategy, it’s crucial to be realistic about your company’s advertising goals and budget. Now, let’s see how these factors influence the overall cost of your ad.
Targeting the ideal audience is the key to successful advertising and, ultimately, reducing your ad’s cost. Fortunately, there is a variety of targeting options available. By setting up the right targets for your ad, you’re ensuring the ad will be presented to individuals estimated to be potential “buyers” based on their activity.
When it comes to the YouTube cost per view model, the more effort you put into targeting the right audience, the more likely you are to avoid unnecessary expenses.
Keep in mind that it’s essential to set limits, such as restricting the ad to only be advertised in your country if you’re selling the product within your borders only.
As we mentioned earlier, YouTube doesn’t come with a preset price on its ads, and the amount you’ll pay also depends on the amount you’re willing to bid for the ad placement.
YouTube has a bidding system for its placements, and the ad cost is determined by how many other businesses are competing for it. Another great thing about YouTube video advertising is that if a viewer clicks on call-to-action and skips your ad, you’re not billed.
Setting a Budget
When you’re ready to start advertising, you’ll need to set a budget. The usual daily budget of small businesses goes between $5 and $10, while some opt for a weekly budget of 50x AOV the average order value.
YouTube gives you security by allowing you to set a maximum amount you’re willing to spend per day, ensuring there will be no surprise drainages of your bank, and being shocked when finding out how many people actually viewed your ad.
YouTube gives advertising projections on your views per day for in-search, in-display, and in-stream ads, and if these numbers don’t align with your business goals, you can go back and readjust your bids.
Setting Up Your Bids
Once you’re ready to set up your campaign, YouTube will ask you to put forward a Max Cost Per View. The bids YouTube offers are tailored to match the targeting setup. If you’re interested only in one ad format, you can use the ‘Customize Bids Per Format’ option. You’ll receive predictions on the estimated views per day, which you can compare to your campaign goals and readjust if the cost of YouTube ads doesn’t fit your needs.
Optimizing Your Campaigns
Optimizing YouTube campaigns requires a great understanding of View rate and Click-Through Rates, the two metrics indicating your campaign’s success. Often the reason for your campaign performing poorly is a competitor outbidding you and winning the advertising battle, which is why it’s always a good idea to bid as high as your budget allows you to.
3. Ad Formats
There’s a range of ad formats users can choose from, and the format you choose greatly influences how much YouTube ads cost.
Video Discovery Ads
Video discovery ads are shown alongside organic search results, and they come with three lines of text and a thumbnail. If someone is interested in the ad, they may click on it and get redirected to your channel or website.
Bumper ads are short, six-second, non-skippable ads that play before a video.
Masthead ads are the large, banner-like ads that show up on the YouTube homepage. These last for 24 hours, and are available on a reservation basis.
Outstream ads are mobile-specific, and they appear only outside YouTube.
Skippable in-Stream Ads
Skippable in-stream ads are the ads that play before, during, or after a video. They’re skippable after five seconds, so viewers have the option to skip a video advertising on YouTube if they’re not interested.
Non-Skippable In-stream Ads
Non-skippable in-stream ads usually last 15–20 seconds. They can’t be skipped, so viewers have to watch them for before proceeding to the video.
Why You Should Advertise on YouTube?
YouTube is a great place to advertise. By creating an ad using YouTube’s services, you gain access to a massive audience—currently, YouTube has around 2 billion active monthly users. This number represents only those logged in, so the actual number is probably even higher; what’s more, YouTube is available in 80 different languages in over 100 countries worldwide.
The targeting options YouTube advertising offers are what make it a popular choice among marketers. With targeting, businesses are able to create ads that will reach those who are interested in their products and services.
Naturally, the bigger the platform, the greater your audience reach—and YouTube is the second largest search engine after Google. Understanding YouTube SEO is a great advantage, and it can help you better promote your business.
|DID YOU KNOW: By including ads in their videos, content creators can make anywhere between $2,000 and $3,000 for a video with more than 1 million views.|
|YouTube video ads don’t come with a preset cost.|
|Targeting, bidding and ad formats are the three factors that influence your ad’s cost the most.|
|YouTube is one of the largest search engines on the market.|
|A short video ad no longer than 40 seconds will drive better results.|
How to Set Up an Effective YouTube Ads Campaign?
Now that you know how to advertise on YouTube and why you should do it, it’s time to set up your campaign. When setting up your campaign, there are a few things you need to keep in mind. First, you need to decide what your goals are—are you trying to increase brand awareness, drive traffic to your website, or increase sales? Once you decide, you can move on to the following.
1. Choose the Right People to Work on Your Campaign
If you want your YouTube video advertising campaign to be a success, you need a team of creative, analytical, and detail-oriented people. When it comes to creating an ad for advertising your business, you have two options: either hire a video marketing company to handle the campaign or create one yourself if you’ve assembled your own marketing team.
The first thing you need to do if you’re running an in-house campaign is to create a campaign budget. If you decide to create a one-minute ad and choose to pay for someone to watch 30 seconds of it, you must put a price on how much that’s worth to your company.
If you’re not experienced in running ads on YouTube and calculating their cost, or you can’t commit to such a project because you’re busy running your business, you can hire professionals to do the work for you. The cost of ads varies according to the number of camera angles, number of words in the script, the overall video length, and more. If you opt for a marketing company, you can expect to pay several hundred or thousand dollars, depending on the ad you want for your business.
2. Set Target Audience
When creating your ad, you need to target a specific audience. YouTube allows you to target by location, language, gender, age, interests, and more.
When advertising on YouTube, you can target your ad to people based on their interests. For example, if you sell cooking supplies, you could target your ad to people interested in cooking, baking, or food in general.
You can also target your ad by demographic information like age, income, and gender.
YouTube allows you to access more detailed demographics and reach users with shared characteristics, such as new parents or college students.
You can target your ad to people based on the topics they look for when using YouTube. Based on the topics you select, you can reach a wide audience. For example, if you select automotive as a topic, your ad will be displayed to people interested in cars.
Another thing to keep in mind is remarketing. If you’re paying via the YouTube cost per view model, remarketing is of key value to your ad, as it’s a good way to revisit people who’ve already interacted with your ad and product and make them permanent customers.
When creating your ad, you need to choose the right keywords—the words and phrases that people use to search for videos on YouTube. You can run your add-on videos related to what your business offers.
3. Make High-Quality Content
If you want people to watch your ad, you need to make sure it’s high quality. Your ad should be creative, eye-catching, and relevant to your target audience.
A low-resolution or poor-quality video won’t do your business any favors—no matter the YouTube advertising cost you pay, your business will lose more than it will gain.
Your ad should also promote your business value to the audience, showing them what they can gain from choosing your business, and it must entail a message you want to pass on to the audience.
4. Keep Your Videos Short
People have short attention spans, so you need to make sure your videos are short and to the point, and your message clear and concise. The longer a non-skippable video runs, the more likely viewers are to lose focus and not engage with it. Creating a short video up to 40 seconds long will drive better results for your campaign.
5. Create a Relevant Landing Page
Creating a landing page as part of your advertising campaign is essential for gaining the full benefits of the cost per click YouTube advertising. When viewers click on your ad, it should take them to a landing page relevant to the ad, helping them learn more about your product or service. What’s more, you can tailor the landing page to expand on the information provided in the ad.
6. Keep an Eye on Your Campaign
Once you’ve launched your campaign, you need to monitor it to make sure it’s performing well. YouTube gives you access to metrics so you can see your ad’s performance.
By looking at the View rate, Watch time, and Engagement performance of your video ad, you’ll learn how people respond to it, and what kind of changes you can make to get a better audience response and lower the cost of ads on YouTube.
|DID YOU KNOW: YouTube statistics show that almost 80% of marketers think YouTube is the best choice when choosing a platform for video advertising.|
YouTube is a great place to advertise your business, as you can reach a large audience and target your ads to specific countries, languages, and demographics.
When setting up your campaign, keep in mind your goals, create a budget, and choose the right keywords. And don’t forget about remarketing!
By following these tips, you can create a successful YouTube ad campaign that will help you reach your business goals.
YouTube doesn’t have a preset price on its ads—businesses decide how much they want to pay per view based on their budget and goals. However, the average cost of YouTube ads per view (CPV) is said to be somewhere between $0.010–$0.030.
As YouTube offers a platform used by millions of users worldwide, amazing targeting options, and the opportunity to monitor metrics and see how the audience is responding to your ad, choosing it as an advertising option is worth it.
Although it seems logical for this type of ads to come with a heftier price tag since they can’t be avoided, there’s no disclosed data suggesting non-skippable YouTube ads cost more than other ad formats.