Advertising on YouTube is a more effective way to reach your target audience than you might think.
We're all familiar with the frequency with which YouTube ads are played – from watching them as we wait for the latest episode of Hot Ones to start, to interrupting our kids' sacred CoComelon viewing time – it's fair to say they're part of our daily lives.
YouTube has around 80 million subscribers who pay for premium access without ads. The rest of the 2.5 billion monthly active users see ads all the time. YouTube therefore provides a huge potential customer base for your business.
And if you can create engaging video ads that don't have people scrambling for the skip button, you're more likely to drive further interaction, whether you want more website visits, plan to boost sales, or hope to increase brand awareness.
Video ads on YouTube come in different formats to suit your goals. You can use short bumper ads, skippable in-stream ads, or longer non-skippable ads. There's something for everyone, and you can tailor your message and budget to your needs. As a nice added extra, you can also target your ads based on factors like demographics, interests, and search behavior.
How to set up YouTube Advertising
In this blog, we'll look at YouTube advertising can be really great for business, and delve a little deeper into all the different types of ads you can choose. We'll also share some tips for setting up an ad campaign that people actually want to watch and reaching your target audience.
Getting started with YouTube ads is pretty straightforward. All you need is a Google Ads account and your video content. Google owns YouTube, which is why you need to access the platform via a Google account.
From there, you can set up your campaign, choose your audience, and set your budget.
Once your ads are out there, YouTube has some handy analytics tools that will help you track performance and optimize your ads. This gives you the chance to tweak things as you go along and hopefully improve your results over time.
Without any further ado, let's get started.
In this guide:
What is YouTube advertising and why it matters
YouTube advertising lets you reach a huge number of viewers through video ads. These days, the trick to advertising is thinking about where your potential customers spend time watching content – and for many, that's YouTube.
Understanding YouTube as an advertising platform
YouTube is the second most popular website globally, with over 2.5 billion monthly active users. Since it's owned by Google, you can create adverts and commercials through Google Ads and there are a few different formats available. We'll get into those formats in more detail later in this guide.
What's great about YouTube ads is that you can target audiences based on things like demographics, interests, and keywords. This is the bit that's going to help you reach the right audience for your brand or products.
Benefits of advertising on YouTube
One of the main benefits of YouTube ads is that they're a bit of a steal compared to traditional TV advertising. What's more, you only pay when someone watches your ad or clicks on it.
Other benefits include the chance of reaching billions of viewers and targeting specific audiences. Of course, you've got measurable results too and the option to remarket to people who've seen your ads.
Types of YouTube ads and their uses
YouTube offers a few different ad formats to help businesses reach their target audience.
The type of ads that are right for you will probably depend on your marketing goals, so let's take a closer look at how they differ.
Skippable in-stream ads
These ads play before or during YouTube videos. Viewers can skip them after five seconds. They're great for building brand awareness and engagement, since you can show each ad a few times to the same viewer to get them planted in their minds.
A huge plus is you're only charged for these ads when viewers watch for 30 seconds or click on them. This is really helpful if you've got a tight budget.
So, the trick with skippable ads is to grab the viewer's attention quickly and then pull them in with a compelling message – that way they're less likely to reach for the skip button.
Non-skippable in-stream ads
These short ads have to be watched in full before a video starts, so they're good for getting your message across.
Non-skippable ads are usually 15–20 seconds long, so they work best for clear, simple messages that you want people to see in full.
With these ads, you pay per impression (that means you pay every time they're seen) so it's important to make sure your target audience is well-defined.
Bumper ads
Bumper ads are very short, non-skippable ads that play before a video. They're different from other non-skippable ads because they last only six seconds.
This might sound like no time at all, but these quick ads are great for reinforcing your brand or teasing a larger campaign. They work especially well on phones where viewers have short attention spans.
Bumper ads are sold on a CPM (cost per mile) basis, meaning you pay a certain amount for every one thousand views.
One great way to get the most out of bumper ads is to use them to complement your longer video campaigns or to build a bit of frequency with your target audience.
Video discovery ads
These ads appear in YouTube search results and as recommended videos. They look like normal YouTube videos but have an "Ad" label. They're basically sponsored video posts.
Video discovery ads are great for promoting your content to interested viewers. They work well when you have a video that's trending, and you want to reach a wider audience.
This is another cost-effective option for driving engagement, since you only pay when someone clicks to watch your video. You might use them to increase the views on your YouTube channel or to promote specific videos to a relevant audience.
Masthead ads
Masthead ads are premium ads that appear at the top of the YouTube homepage. They auto-play for up to 30 seconds, but there's a catch – they don't have any sound. This stops any unexpected audio from interrupting someone's day.
While silent ads might sound like a strange idea, they actually offer massive reach and visibility. They're great for major product launches or time-sensitive campaigns and can be a good tactic for reaching a huge audience quickly.
Since they appear on the homepage, masthead ads are typically sold on a reservation basis and can be expensive. That's why you'll usually see them used by large brands with big budgets.
How to set up a successful YouTube ad campaign
When setting up your YouTube ad campaign, you should hit on a few key steps to make sure your ads reach the right people and bring in the desired results.
In this section, we'll run through the essential elements of a YouTube campaign.
Linking your YouTube channel to Google Ads
To start advertising on YouTube, you need to connect your YouTube channel with your Google Ads account. This link allows you to manage your campaigns and track their performance easily. Here's how to do it:
- Sign in to your Google Ads account
- Click on "Tools & Settings" in the top menu
- Select "Linked accounts" under "Setup"
- Find "YouTube" and click "Details"
- Click the "Link" button next to your channel name
Once linked, you can access your YouTube channel data and create video campaigns directly from Google Ads.
Choosing the right campaign objectives
Setting clear goals for your YouTube ad campaign is a big part of getting the success you want.
These goals are easy to set in Google Ads, and they offer various objectives like increasing brand awareness and reach, showcasing products, increasing website traffic, improving lead generation, or driving sales.
The trick is to pick the objective that aligns best with your marketing goals. You'll then be presented with the most suitable ad format options for your needs, and Google will optimize your ad to best suit your requirements.
Setting a budget and bidding strategy
The next step is to determine how much you're willing to spend on your YouTube ads. To manage this, you can either set a daily budget or a total budget for the entire campaign duration.
Your budget will affect how often your ads are shown and how many viewers you have.
For bidding, you have several options. Cost per view (CPV) and cost-per-thousand impressions (CPM) are both on the table, as is target CPA (cost per action). For example, CPM might be best for a bumper ad, while target CPA might work well for skippable video ads.
Give it a little thought, then go for the bidding strategy that matches your campaign objective and budget constraints.
Crafting the perfect ad content
Creating compelling video ads is key to capturing viewer attention and driving action.
That skip button can be hard to resist, but there are a few tricks to keep viewers engaged.
First of all, keep it short and engaging (between 6 and 15 seconds for non-skippable ads) and place your key message and branding early in the video. Use eye-catching visuals and clear audio to draw people in, and include a strong call-to-action (CTA) to encourage action.
To optimize your ads, you could even create multiple versions of an ad to test which performs best.
How to target the right audience for your YouTube ads
Successful YouTube advertising is all about targeting the right people.
In this section, we'll share a few helpful strategies to keep in mind as you work to reach those viewers most likely to be interested in your products or services.
Demographic targeting basics
A good place to start is by targeting viewers based on basic demographic information. This includes age, gender, parental status, and household income. For example, if you're selling luxury watches, you might focus on men aged 35-54 with higher incomes.
YouTube also lets you target by location. You can even narrow your audience to specific countries, states, cities, or even postal codes. This is great for local businesses or region-specific campaigns.
One more tip: remember to consider the time of day your ads run. Some demographics are more active at certain times, and it's worth taking this into account. For example, young adults might be online late at night, while parents may browse YouTube in the early evening.
Interest-based and affinity targeting
YouTube offers powerful interest-based targeting options, too. You can reach viewers based on their hobbies, passions, and online behaviors. For instance, if you sell camping gear, you could target outdoor enthusiasts and adventure travelers.
Affinity audiences are groups of people who have a strong interest in specific topics. These audiences are built based on long-term browsing behavior. Examples include foodies, travel buffs, and fitness enthusiasts.
Another tip is to use in-market audiences to target people actively researching products like yours. This helps you reach viewers who are closer to making a purchase decision.
Custom intent and remarketing
Custom intent audiences let you target viewers based on their search habits. They work by asking you to create lists of keywords related to your products and then showing your ads to people who have searched for those terms.
Remarketing is a powerful way to re-engage people who've interacted with your brand. It means that if someone's already interacted with your brand – perhaps by watching your videos or visiting your website – you can reel them back in with more ads.
This keeps your brand top-of-mind and can help push viewers toward a purchase. You can even create different ads for people at different stages of the buying process.
By combining these targeting methods, you can create highly specific audience segments. This is a nice way to make sure your ads reach the right people at the right time, and it's likely to improve your campaign's performance.
Measuring and optimizing your YouTube ad performance
Tracking and improving your YouTube ads is key to getting the most from your marketing budget. Let's look at the essential metrics, tools, and testing methods to boost your results.
Key metrics to track
Views and impressions can tell you how many people watched your ad. But engagement metrics like watch time, click-through rate (CTR), and view rate can be even more revealing, since they give you some big clues as to whether those viewers found it interesting.
A good place to start is by looking at conversions to see if viewers took action after watching. This could mean visiting your website, signing up for a newsletter, or making a purchase.
Cost metrics are crucial too. Check your cost per view and cost per action to ensure you're not overspending. Compare these to your return on ad spend (ROAS) to gauge overall performance.
Finally, brand lift studies can measure how your ads affect awareness, and give you some ideas about long-term impact.
Tools to measure ad performance
Getting a full picture of your ad performance on YouTube involves looking in a few different places.
Google Ads is your main hub for YouTube ad data. When you pull up the dashboard you'll see an overview of your key metrics, and you can dig deeper with custom reports.
Next up, YouTube Analytics offers more detail on how viewers interact with your content. It shows watch time, audience retention, and engagement metrics for each video.
From there, you can use Google Analytics to track what happens after someone clicks your ad. It can also be interesting to set up goals to see how YouTube traffic converts on your website.
Finally, the platforms above work especially well when they're combined with third-party tools like Brandwatch for a wider view. This will allow you to track brand mentions and sentiment across social media, helping you gauge overall campaign impact.
Improving results through A/B testing
A/B testing lets you compare two versions of an ad to see which performs better.
So, you might test different video lengths or various CTAs. Even thumbnails or titles can lead to different results, and alternating targeting options can be interesting too.
It's usually best to test one element at a time, since this helps pinpoint what's driving improvements.
As a general rule, run tests for at least two weeks to gather enough data. Then, use Google Ads' built-in experiments feature to split your audience and compare results easily.
Oh, and don't stop at one test. Keep refining your ads based on what you learn. Small tweaks can lead to big gains over time.
YouTube ad costs and budgeting tips
YouTube ads can help you cut through the noise and get straight to your target audience.
But that's hard to do if you don't understand the costs and how to budget effectively. In this section, we'll share our tips for spending your money in smart ways.
Factors influencing ad costs
Several factors impact how much you'll pay for YouTube ads.
This includes factors such as your target audience and competition for those viewers, the ad format you choose (eg, skippable, non-skippable), and your bidding strategy and budget.
Prices might also spike around a major event, like the Super Bowl or the Oscars.
In particular, high-demand audiences or popular times of year – such as Christmas – can drive up costs.
Average costs for different ad types
YouTube offers several ad formats with varying price points.
For example, TrueView in-stream ads might cost $0.10-$0.30 per view, while TrueView discovery ads could be $0.30-$0.50 per click.
Bumper ads are priced a little differently, for example, $1-$4 per 1,000 impressions, and masthead ads could be $2-$3 per 1,000 impressions.
Remember, these are averages. Your actual costs may differ based on your targeting, content, and bidding strategy.
Tips to maximize your ROI
To get the most from your YouTube ad budget, you'll need to set clear campaign goals and use audience targeting to reach the right viewers.
Creating high-quality and engaging video content should always be one of your biggest priorities.
You could start with a small daily budget of $10-$20 to test what works, then as you see results, gradually increase your spend on top-performing ads.
Remember, YouTube's targeting options can help you reach specific demographics and interests with a few clicks. This focused approach often leads to better engagement and lower overall costs.
Frequently asked questions
And so we've reached the end of our guide. To be sure we didn't miss anything, let's close on some FAQs.
What are some examples of successful YouTube ads?
Squarespace's "Make It Real" campaign grabbed everyone's attention by combining the production values of a TV drama with compelling and mysterious storytelling. They didn't give the game away straight away, which kept us watching for longer.
Dollar Shave Club's viral "Our Blades Are F***ing Great" ad used humor to stand out and sell their products. It blended naturally into YouTube, feeling just like another funny video.
Can you explain how advertising on YouTube can be free?
If you don't have money to spend on ads, you can always just create and share content on your YouTube channel for free.
Of course, you won't have all the targeting options, and your videos won't appear on other people's channels. However, you don't have to spend money on paid ads, so you can focus your resources on creating better organic content.
Collaborating with influencers is another way to market your products on YouTube without spending much – sometimes all it takes is sending out some free product to get featured.
How do YouTube ad blockers impact advertisers?
Ad blockers can reduce the number of people who see your ads, and this may lower your reach and impact campaign performance.
There are ways around this though. For example, alternative strategies like sponsorships or product placements can get your marketing content in front of viewers without flagging it as an ad.
What's the average cost for a YouTube advertisement campaign?
Costs vary widely based on factors like ad format, targeting, and competition. You can start with as little as $10 per day for some campaigns.
On average, expect to pay $0.10 to $0.30 per view for TrueView ads. Display ads typically cost $2-$5 per 1,000 impressions. The trick is to set a budget that aligns with your goals and adjust as needed.
