YouTube is the second-most popular social network.
Its 2.3 billion users log into the platform at least once per month.
This number shows that there is an active and massive market that could be tapped into.
If YouTube ad stats are your thing, we have an extensive blog post on that.
Marketers can reach a wider potential audience on YouTube using ads.
So, how much do you have to spend on YouTube Ads?
The good news is that you can advertise on YouTube while on a budget.
There is no minimum amount, and you can spend according to your budget.
As a marketer, you can start promoting your business on YouTube using a minimum of $10 per day in your ads campaign.
Then, you can increase the ad budget when you see the effectiveness of the ads.
However, the amount you spend on ads depends on your business and content.
If you need more views, you need to have an irresistible product or offer.
Why Advertise on YouTube?
Marketers use YouTube to drive offline and online sales.
Just after the total lockdown, about 70% of viewers say they bought from a brand after seeing its brand videos on YouTube.
Advertising on YouTube has several benefits, from affordability to targeting to measurability and customization capabilities, but the reason most marketers prefer the platform is its reach.
Is YouTube good for brand awareness?
Video ads are a strong way of generating amazing brand awareness.
Video advertisements can increase your brand favourability by 500%, and the intent to purchase for consumers who have heard or read about you before, from 270%.
For people to consider buying from you they must first hear or read about it so this is one reason why videos work well in marketing campaigns.
If they watch your ad, they become aware of your product or service.
Advertising campaigns that make your brand appear in front of your ideal target market can be easy to create yet deliver awesome results for your business.
Wider reach
Apart from the 2.3 billion active users on YouTube, other unregistered users view YouTube videos via the autoplay feature in WhatsApp, Twitter, and other platforms, thereby increasing the views.
When you advertise on YouTube, your video ad has the potential to attract someone who could be interested in your business.
You can target your ad at different customer demographics, and that way, your ad may reach potential clients from all walks of life.
Advanced targeting
YouTube ads increase the likelihood of your ads being seen by a relevant audience.
Besides basic targeting information like gender, age, and geographic location, you can set your YouTube ads to target videos by keywords, topic, and category.
Additionally, you can use placement targeting to choose specific YouTube pages where your ads should appear.
This makes it easier for your ad to reach the right audience at the right time without spending lots of money.
In addition to letting, you narrow in on your target audience, you can customize the ad to be more personalized.
YouTube ads allow you to be creative and to choose a format that helps you achieve your goals.
Customizable
Unlike other platforms which give advertisers strict guidelines to follow, YouTube ads give advertisers the freedom to choose their advertising approach.
You can use the platform to share valuable information, explain your product, tell stories about yourself and your customers, and more.
This wide range of advertising options makes YouTube one of the most flexible and dynamic advertising platforms out there.
Cost-effective ads
A typical ad view is relatively cheap because only sustained views are counted as engagement.
This means, if someone sees your true view ad and quickly skips it, you will not pay for that view.
If you are having a hard time creating an ad, you don’t need the help of an agency or social media manager to create your ads.
YouTube has a guide that can help you set up your account, and if you still need help, you can reach out to a YouTube advertising expert.
Ad analytics
You can measure your ad’s success under the analytics tab in your YouTube account.
This way, you can have more ad insight about the people that viewed your ads and how the ads are generally doing.
Google adwords Set up
To get started with Google Ads, head over to ads.google.com and sign in or create an account by filling out your personal information (i.e., name, email address).
Then you can start creating campaigns on the platform!
YouTube Advertising Costs: What to Consider
We will discuss what affects your YouTube advertising cost and which strategies will work best for your ads.
- Target audience
- Bidding
- Ad formats
Target Audience
Your buyer persona or target audience contributes to the success of your YouTube ad campaign.
You should define who you are trying to reach with your ads before setting up the ads.
There are three parameters you should put into consideration when choosing an audience to target.
- Interest
- Demographics
- Remarketing
Interest:
This refers to the past behavior of your target audience, which is based on what they have interacted with previously or their search history.
Targeting your ads to users based on their interest can boost your ad effectiveness.
Demographics
This refers to basic stats like age, gender, geographical information, and parental status.
You can also target a YouTube ad to specific data based on your audience’s life stage.
For example, university students, accountants, new homeowners, etc.
Remarketing
This is when you retarget those who have interacted with other videos on your channel.
When a YouTube ad is targeted by intent, it has a 100% higher lift in purchase intent than those targeted by demographics [3].
It increases your return on investment because those people are already interested in what you are selling.
There is a higher likelihood of them engaging with your ad campaign.
Bidding
When advertising on YouTube, you are not given a fixed cost; you can set your daily budget.
This will impact your YouTube advertising cost per video.
What does daily budget mean on YouTube ads?
Your daily budget has a big impact on how much you spend each day.
Your average daily budget is the amount you are comfortable spending each day for an entire month.
This number specifies how much money you will spend on a campaign in one day, so it can be hard to know where to set your limit without experimenting with different numbers and seeing what works best for your business strategy.
It is important to customize your targeting before you set your bid because when you change your targeting options, YouTube changes your bid suggestions.
Do You Pay when people skip ads?
It’s difficult to get views and make money on YouTube if viewers are always skipping ads.
But as I am sure you are aware, viewers are given the option to skip after 5 seconds of a regular true view in-stream ad.
The percentage of skipped ads that YouTubers have in their videos heavily impacts how much revenue the creators can earn.
This is because it isn’t counted as one view or paid out by an advertiser unless you’re watching the entire video with no skips at all – which is nearly impossible.
Billing Warnings
To avoid being overbilled when people start watching your ads more than you expected, you should set a maximum bid amount you are willing to pay per day.
When setting your bid, YouTube provides you with a range of bids that depend on your target audience.
You can also choose to “Customize Bids per Format,” divide the bids separately for “In-stream” or “In-display” formats. YouTube allows advertisers to choose a bid strategy that works for their business.
Before setting up the ad, YouTube shows you forecasted views per day for in-search, in-display, or In-stream formats.
If the figures do not match your intentions, you can adjust your bids, and it will show you a predicted average CPV.
YouTube Ad Types
There are 5 YouTube ad formats you can opt for, and most of these formats have subcategories.
Let’s have a look at these ad types.
TrueView
- TrueView In-Stream
TrueView in-stream ads can be seen on videos served by YouTube or a collection of sites and apps that are part of the Google Display Network.
True View In-Stream Ads offer advertisers another compelling way to reach people these commercial type video ads appear before, during, and after the video a viewer is watching or wanting to watch.
Your call to action along with your video content will greatly determine your success and the cost per view (along with your targeting).
This is the type of YouTube ad most folk think of.
- TrueView Video Discovery
These appear at the top of the search results therefore ranking you above the number one spot.
How you pay for them is determined in the set up but you can get some good results with the right targeting and marketing message.
Skippable In-Stream Video Ads
- Bumper Ads
Bumper ads are short, memorable video messages that can be utilized to reach more customers and promote your brand.
You will find the option of creating bumper ad campaigns in Google Ads using the “Video” campaign type.
Discovery Ads
Imagine if Google could find you no matter where on the internet you are.
That is what discovery ads do!
These native ads can appear in multiple places and they will be tailored to your interests based off of In-Market signals that Google uses for its targeted audiences.
Non-Video Ads
- Display Ads
Display advertising is a process of displaying ads for products or services on networks like the internet through visuals such as images and videos to advertise said product.
- Overlay Ads
Overlay ads don’t interrupt the video you’re watching, and they exist at the lower part of a screen.
They’ve traditionally been static banner-shaped advertisements that show on Youtube videos (just like those annoying ones).
So they are not YouTube ads per se, but they do allow you to advertise on youtube
- Sponsored Cards
Sponsored cards display the content that you might find interesting or related to the video.
For example, products featured in the video, similar videos, and more!
You can see a preview of these ads on your right-hand side for only a few seconds before it fades away.
It’s also easy to browse sponsored cards by clicking on their icon at the top right corner of your screen when viewing any YouTube Video
They are available on desktop and mobile devices only.
TrueView Ad
This ad gives your audience the option to either watch or not watch and YouTube charges you when someone watches the video.
In TrueView ads, your target audience only watches the videos they are curious about or interested in.
TrueView In-stream Ad
When watching a YouTube video, the ads that appear before the start or during a video is called a TrueView In-stream ad.
A viewer must watch the ad for 5 seconds before deciding whether to skip it or continue watching.
You only pay for the ad when the user watches the video ad for a minimum of 30 seconds.
If the viewer clicks on your advertising option or any sd card, you will be charged.
TrueView Video Discovery Ad
This type of ad is shown alongside other YouTube videos when a user uses the search tab.
If the viewer clicks on the ad, you will be charged.
Skippable In-stream Video Ad
These ads appear before, during, or after a video and are skippable after 5 seconds.
Just like the TrueView In-stream ad, you will be charged when a viewer watches a minimum of 30 seconds of the video.
You are also charged when they click on a card or any option on your ad.
Non-skippable In-stream Video Ad
This type of ad is compulsory for the viewers to watch before the main video.
Viewers cannot skip these videos till after 15 to 20 seconds of watching the video ad.
Bumper Ad
These types of YouTube ads cannot be skipped, and they are up to six seconds long.
So, the viewer must wait until the end of the video ad before watching the main video.
Discovery Ad
When users search for a keyword or term, discovery ads are usually among the search results.
If your video ad is relevant to the search term the user searched for, they may watch your video ad. You only pay when there is interaction with your video.
Non-video Ad
There are several types of non-video ads, and they include:
Display ad
This a text and image ad that appears to the right of a featured video. On the desktop view, you can find it above the list of video offers.
Overlay Ad
These types of ads appear at the bottom 20% of your video and are semi-transparent.
They can be text or image ads and are shown on top of YouTube partner program (YPP) channels.
Sponsored cards
Sponsored cards show video-related content, such as websites, or products shown in the main ad.
Can I advertise my YouTube channel on YouTube?
Putting your videos on YouTube is a great way to get more views and subscribers, but you have competition.
If other content creators are just as good or better than yours then they will be the ones getting all of those viewers instead!
One way to make sure that doesn’t happen?
Paying for an ad campaign via Google Ads so it shows up before or alongside any video someone might watch in their feed.
And if the ads aren’t generating enough clicks (you can end them whenever), try using different colors, copywriting styles, graphics–anything at your disposal!
Whether you go the non skippable ads route or discovery is up to you.
Test both and see which works better from a youtube advertising cost perspective.
Conclusion
Running YouTube ads on a budget is possible.
Unlike other platforms where there are limits in advertising to your most valuable audience, YouTube gives you the flexibility to access a wider audience at a low cost.
With about 94.5% of over-the-top (OTT) watchers in the U.S. streaming YouTube from their Tv’s, you can be certain of reaching different audiences.
The targeting options on YouTube are advanced, making it a more effective platform than traditional advertising media.
You should not worry about the cost of your ad, but how much return of investment you can make from advertising on YouTube.
Much of your success will depend on the ad format you chose and if you have a quality video.
If you would like an example or two, then we have a guide.
You can grab that here.
If you want to know how much some of the top advertisers pay, then watch this video for an example of different campaigns.
Thanks for reading and we welcome any comments or questions below.