What’s the Cost of YouTube Advertising?

What’s the Cost of YouTube Advertising?

“Aw man, another ad!” Ever said those words when binging your favorite YouTube channel? If you’ve been a regular YouTube user over the past few years, you’ve probably noticed the amount of ads has increased. Well, those ads aren’t just there to annoy you - they actually serve businesses and brands in a very beneficial way. Here’s something else you probably don’t know: Google owns Youtube, which means anyone who advertises on YouTube utilizes the Google AdWords network. YouTube boasts 2.1 billion monthly users, making its search engine second only to Google itself. Do we have your attention? Good…sit tight and keep reading.

As a business owner, you know that a business needs to advertise. With Google AdWords as its driving force, YouTube is one of the top advertising platforms on the internet. That means it’s worth your while to see if YouTube advertising is a good investment for you.

But how much do YouTube ads cost? What different kinds of ads are there to choose from? What’s the most sensible way to utilize YouTube ads in a way that’s cost-effective? We’re going to cover all of that and more today so your business can be YouTube ad-smart!

The Cost

The million dollar question! Well, there’s the thing - There’s no definitive way to determine the cost of YouTube Ads. Why? As with other forms of Google AdWords campaigns, the price of YouTube ads involve bidding for ad placement…so the cost is not straightforward. But don’t worry! Maximum budgeting is a handy provision from YouTube that lets you be in charge of how much you spend, and we’re going to give you some tips to make sure you know the ropes before you go about bidding.

Beginning an ad campaign should always start with a budget in which you are able and prepared to spend on YouTube advertising. A good baseline for most businesses is at least $10 per day. Once you have experimented with a few different advertising options and seen what works best, you can raise this budget. 

But where does this money go? Do you just lose it all in a gamble to try and get seen? Not at all! You only pay when a viewer engages in your ad, either by watching the entire ad without skipping or clicking a Call to Action on the display.

But how does bidding work? Usually, you bid by “cost per view”, or CPV, which means you are willing to pay up to your bid figure for each view you receive. Setting a maximum figure creates parameters to prevent any ugly surprises in the instance that your ad gets more views than you anticipated. Another helpful resource is that YouTube will give you a typical range of bids, and you have the option to select “Customize Bids Per Format”, which will allow you to split your bids separately for “In-stream” (ad placed during a video) or “In-Display” (ad placed on the sidebar of the video). Suppose you are more interested in in-stream advertising, you will want to bid more for those statistics than in-display. 

Keeping a close eye on your projections and predicted views per day for in-display, in-search, and in-stream will help you adjust your bids and adjust accordingly.

YouTube Ad Formats

There are four principal forms of advertising on YouTube: in-feed video, skippable video, non-skippable video, and bumper ads. Let’s break down each format and the perks and drawbacks of each.

• • In-Feed Video Ads - These are the videos that pull up in your YouTube search results alongside related videos, as well as the videos you’ll see on the YouTube mobile homepage. They show up as a thumbnail image from your video with text that invites users to view. Understand that in-feed video ads will not be part of the videos people are watching; they must be selected. However, they are still seen, and anything that is seen is successful advertising. If you are able to pick out words or phrases in your niche that are regularly searched, you could then go about creating a video to coordinate with that phrase, thereby making your video appear as relevant to viewers of that video. Oh, and at a rate as low as 3 cents per view, this is easily one of your most cost-effective options.

• Skippable Video Ads - The most common type of YouTube ad, this is the ad viewers can skip after 5 seconds. The good news? You only pay for the videos that a viewer watches in its entirety. This keeps your cost down, obviously, but your chances of gaining a potential new customer are lower since many users click through skippable ads. If you opt for this kind of ad, you’ll want to target your niche market very carefully.

• • Non-Skippable Ads - These are the ads a user must view before starting or continuing with their video. Non-skippable ads are usually around 15 seconds, depending on local standards. These ads will be more costly since the user doesn’t have a choice to skip them, but they give you a good chunk of time to get your message across to the audience, and therefore have a better chance of increasing your click-through rate.
• Bumper Ads - These are also non-skippable ads, but they are limited to around 6 seconds. Businesses usually opt for bumper ads when they have a brief, memorable message they want to convey to potential customers. The time limit means your message should be concise and to-the-point. You’ll pay for bumper ads according to impressions. For example, since they are charged by “cost per thousand impressions”, you’ll pay each time your ad gets 1,000 impressions.

So there you have it. That’s the lowdown on YouTube advertising. Feeling overwhelmed? You came to the right place! Alt Media Studios strives to be a one-stop-shop for all your online advertising needs, and that includes video marketing. We can help you produce videos for your ads from start to finish and aid in the promotion of your videos on multiple platforms, including YouTube. Read more about the benefits of investing in video marketing here, and don’t hesitate to contact us today so we can get the camera rolling!