YouTube Ad Cost: What You Need to Know That Could Help Your Business

YouTube Ad Cost

Thinking of incorporating YouTube ads into your video marketing strategy? We’d say you’re onto something since YouTube has over 200 billion active monthly users and is the second-highest-ranking website (only next to the mammoth search engine known as Google!). But before committing to adding this strategy to your digital marketing plan, you probably have some questions. Wondering about the average YouTube ad cost and if YouTube video ads are worth it to reach your potential customers? Keep reading.

We’ve all seen our fair share of YouTube ads and of course – we’ve all skipped over our fair share of them – too (hey, you can’t target everyone). But did you know when users actually watch all the way through, they’re 23 times MORE LIKELY to follow through on the call-to-action (CTA)?

Today, we’ll look at types of YouTube ads and the cost of advertising.

How Much Does YouTube Advertising Cost?

As with any type of advertising, the cost is a big concern. However, the answer to that million-dollar question of how much YouTube ads cost is... It depends. On what?

  • Your video content quality
  • Your ad’s timing
  • Formatting and messaging options
  • Your industry and type of ad
  • The bidding options
  • Targeting options
  • YouTube ad campaign goals

What Is the Average YouTube Ad Cost?

Despite the heading, there is no average cost of YouTube ads. Costs will vary depending on a combination of the factors listed above.

Let’s say your target audience is men between the ages of 15 and 50 doing a YouTube search for podcasting equipment. Your cost-per-view (CPV) or pay-per-click (PPC) will be higher than if you narrow your potential customers to men aged 18-30 who are looking for the best USB microphones. This narrow niche will lead to a higher view rate and potential conversions. Though YouTube does not have a “set” rate, its CPVs typically cost $0.10 - $0.30 per view. That means it would cost about $20k to reach 100,000 viewers.

When it comes to ads, you set a daily budget then pay when someone participates in that ad campaign (i.e. you pay up to your bid amount for every view of at least 30 seconds).

It’s easy to get hung up on the costs when you plan your ad placements. The key is to make sure you optimize your ad campaigns to make sure they perform well and get the best results. Depending on your budget, it’s entirely up to you how much you spend. The average YouTube ad cost a business will spend is about $10 per day, then they monitor the metrics to see what works and makes adjustments as needed based on the results.

There is a lot of data to look at, so be sure to focus on the View Rate and the Click-Through Rate. By looking at these, you can determine if people find your videos engaging enough to stick around.

YouTube Ad Cost

The 7 Different Types of YouTube Ad Formats

  1. Sponsored Cards – These types of ads might display information relevant to the video you’re watching. For example, an ad might feature a product that you see in the video.
  2. Bumper Ads – Bumper ads are short and pack a punch. A typical ad lasts about six seconds and is perfect for creating that brand awareness. As for the YouTube ad cost, you pay per thousand impressions for bumper ads. Meaning each time your ad gets 1,000 impressions, you pay.
  3. Non-Skippable Video Ads – This one is pretty self-explanatory. It’s possible for these ads to last longer than 30 seconds without the ability to skip them.
  4. Skippable Video Ads – As opposed to non-skippable ads, these ads ARE skippable. Because these are normally short, it’s important to get right to the point. By using skippable ads, you only pay for ads that viewers watch for more than 30 seconds (unless, of course, your ad is shorter). Because of this, you won't be held responsible for paying for all those people who skip your video as soon as they get the opportunity.
  5. Display Ads – A display ad is a clickable image that appears to the right of a video, above the video suggestions.
  6. Discovery Ads – Video discovery ads are organic search results that you target to a specific audience, just like Google Adwords. Users may watch your video if it seems relevant. The thumbnail is accompanied by three lines of text. The YouTuber will get taken to your video or channel as soon as he or she clicks on it.
  7. Outstream Ads – You may want to consider Outstream advertisements if your main demographic are app and mobile users. You can optimize these for mobile viewing that appears on partner sites to reach potential customers.

Non-Video Advertising

  1. Overlay Ads – Overlay ads that appear on the bottom half of the video and the viewer has the option to close them.
  2. Banners – Banners appear next to your video ad, and you can either upload a banner image or let Google Ads create one from the banner of your YouTube channel. You can only view a banner on a desktop computer, not on a mobile device or connected TV.
  3. Masthead – When you want to make a big impact in a short amount of time (e.g., a sale event) or to raise awareness about a new product or service. You can only access masthead advertisements through a Google sales representative by reservation. Since Masthead advertisements are only accessible by reservation, you will be paid per thousand impressions (CPM). These types of advertising reach the most people in the shortest amount of time, they are the most expensive type of advertising.

As you can see, YouTube ad costs depend on a handful of different factors. Hopefully, this article has clarified any questions you have about YouTube ad cost or different types of ads. Our team is ready to assist you if you're thinking of creating a high-quality Non-Skippable Video Ad for a YouTube video. Get in touch with us today.