How To Determine YouTube Ad Prices

YouTube is arguably the most popular video streaming platform, with over 2.2 billion users in more than 100 countries. 

It’s also one of the most popular social media networks globally, second only to Facebook.

If you want to build strong brand awareness and influence your customers, creating a YouTube ad campaign can be an ideal marketing strategy.

But, the question is: how much do YouTube ads cost? 

In today’s article, we’ll talk all about YouTube ad pricing, types of ad formats, and much more!

How Does YouTube’s Ad Pricing Work?

YouTube allows advertisers to pay based on either impressions (view count) or engagements (clicks).

If an advertiser chooses the impressions option, they will be charged based on the number of times their ad is shown, regardless of whether it is clicked on. If they choose the engagements option, they will be charged based on the number of clicks their ad receives.

Overall, the view count model allows advertisers to reach a large audience and get their message in front of as many people as possible, while the click model is better suited for advertisers who want to drive traffic to their website or other online properties.

How Much Does YouTube Advertising Cost?

There are several factors that influence the cost of advertising on YouTube. Here are some of the main reasons:

1. Type of ad: There are several types of ads, including in-stream ads, display ads, and overlay ads. In-stream ads are the most common and tend to be the most expensive, while display and overlay ads are generally less expensive.
2. Targeting: The more specific the targeting, the higher the cost of the ad. For example, targeting a specific age group or geographic location will generally be more expensive than a broad audience.
3. Competition: The competition for ad space can also affect pricing. If there are numerous advertisers competing for the same ad space, the cost of the ad will increase.
4. Ad length: The length of the ad can also influence the cost, with shorter ads generally being less expensive than their counterparts.

As you can see, the cost of advertising on YouTube varies widely depending on these and other factors.

In general, businesses can expect to pay between $0.10 and $0.30 per view.

Types of YouTube Ad Formats

As we mentioned earlier, ad formats will significantly impact your YouTube ad prices, but the question is how do they work?

There are several types of ad formats available on YouTube, including:

1. Skippable video ads: These are full-length video ads that can be skipped after a certain amount of time. They can show up before, during, or after the main video content has played. These are typically 15-30 seconds in length.
2. Non-skippable video ads: These are video ads that must be watched in their entirety before the user can access the content they want. These ads are typically longer than 15-20 seconds, and are a great option for advertisers that don’t want their message skipped.
3. Bumper ads: These are short, non-skippable video ads that are 6 seconds or less in length. These should be designed to be attention grabbing and memorable.
4. Sponsored cards: These are interactive ads that appear in the video player and can be clicked on to learn more about a product or service.
5. TrueView ads: These are video ads that users can choose to watch or skip, and advertisers are only charged if the ad is watched to completion or for 30 seconds, whichever comes first.
6. Outstream ads: These are video ads that appear on non-YouTube websites and apps.
7. Display ads: These are banner ads that appear on the YouTube website and mobile apps.
8. Overlay ads: These are semi-transparent banner ads that appear on the lower portion of the video player.
9. Masthead ads: These are large banner ads that appear at the top of the YouTube homepage.

How To Set Up Budget-Friendly YouTube Ad Campaigns?

1.) Try to create quality videos in-house 

To save money, you can attempt to learn how video recording and editing is performed for online ads. This will allow you to spend a greater amount of time making new ad creatives, without having to worry about the cost of hiring an expensive ad agency to create everything for you.

Alternatively, you could attempt to find a college student or freelancer in your local area who is interested in helping you create video ads.

The most expensive option is typically to hire a video production company to create your ads. While this is the most costly, it often results in much better videos that typically have better performance metrics.

After all, you get what you pay for, in the end.

2.) Target the right audience 

There are several ways to ensure you are showing your video ads to the right audience:

1. Use demographics: You can target your ads to specific age groups and genders.
2. Use interests: You can target your ads to people based on their interests, such as their favorite YouTube channels, video categories, and website niches.
3. Use keywords: You can target your ads to users who are searching for specific content on YouTube, or who have recently searched for something similar.
4. Use placements: You can target your ads to specific YouTube channels, video content, or websites on the Google Display Network.
5. Use custom affinity audiences: You can create custom audience lists based on visitors’ online behaviors and interests.
6. Use custom intent audiences: You can create custom audience lists based on visitors’ recent searches or other indicators of intent to buy a product or service.

3.) Keep the video ads short 

There are several benefits to creating short video ads on YouTube. Let’s briefly discuss a few of them:

1. Attention span: Short video ads are more likely to hold the viewer’s attention, as they are quick and to the point.
2. Lower Cost: Short video ads are generally less expensive to produce than longer ads, as they require less time and resources to plan, record, and edit.
3. Mobile-friendly: Short video ads are well-suited for mobile devices, as they are easy to watch on smaller screens.
4. Engagement: Short video ads can be more engaging, as they can be more attention-grabbing and memorable since you have to get to the point sooner.
5. Conversion: Short video ads can be more effective at driving conversions, as they are less likely to turn off viewers who are not interested in the ad. The only exception to this is educational content, which people expect to be longer in length and more detailed.

4.) Send traffic to optimized landing pages 

Using optimized landing pages for video ads is important because it helps to ensure that the viewer has a good experience after clicking on the ad and is more likely to take a desired action, such as making a purchase or filling out a form.

Don’t direct people to your homepage from a video ad! This is the most common mistake we see from new advertisers.

For example, if you are a heating and cooling company advertising furnace checkouts before winter, take people from the ad to a landing page that only talks about the furnace checkout. The landing page should have your logo, social proof, information about your checkup service, an opportunity to email in or schedule the checkup, etc. This will produce better results than sending the person to your homepage.

Related Article: Examples of Great Landing Pages

Should You Create a YouTube Ad Campaign?

Advertising on YouTube can be an effective way to reach a large, targeted audience with your video assets.

However, determining if this is the right choice for your business will depend on a variety of factors, including your target audience, marketing goals, budget, and industry.

To help you figure out if YouTube Ads are a good fit for your business, you should consider the following:

1. Who is your target audience? If your target audience is already on YouTube searching for information relevant to your industry, then advertising on the platform may be a good choice.
2. What are your marketing goals? YouTube can be an effective way to improve brand awareness. Once you’ve built a large amount of subscribers, you can attempt to monetize your channel. You can also rely on YouTube for lead generation by linking to landing pages on your website.
3. What is your budget? YouTube advertising can be relatively inexpensive if you aren’t targeting competitive ad spaces. You’ll want to research this further to ensure your ROAS will be appropriate for your business model.
4. What is your industry? There are some industries that are going to do better on YouTube than others. For example, consumer product, entertainment, travel, technology, and education industries often experience faster results from YouTube Ads. That isn’t to say other industries can’t work – you just need to find the right angle and ensure your target audience can be engaged on YouTube..

If you think it might be a good fit for your business, YouTube Ads may be worth considering as part of your overall digital marketing strategy.

Final Thoughts on Estimating YouTube Ad Costs

Even though budgeting and calculating YouTube ad prices can be overwhelming, the video platform can be a valuable advertising channel for your business.

Your next step should be to plan out quality video content, then work on creating an effective landing page to send engaged prospects to.

When you are ready, go ahead and setup your video campaigns in Google Ads. If you have questions or are interested in hiring a Google Ads manager, let us know and we’ll see what we can do to help!