How Much do YouTube Ads Cost?

Author

Kevin Urrutia

Category

Marketing

Posted

August 29, 2020

Posting videos on YouTube can be fun; but, did you know that it can also be profitable? Whether you’re posting videos to help inform viewers about how to change an oil filter or showing how to poach a fish or even giving a virtual beauty class, you can make a little (or sometimes a lot) of money by adding ads to your YouTube pages. How much does this cost? The short answer is that it depends on what type of ads you choose for your pages. Since YouTube is owned by Google, you are limited to Google ads on your pages. However, Google offers a broad array of advertising option. Below is a short overview of what type of ads are available and how to optimize your pages.

Why Would You Advertise on YouTube?

If you’re wondering why you should take the time to optimize your YouTube pages, stop and think how nice it would be to get a deposit every month simply for doing what you love–posting videos. You’ve already done the difficult part of filming your video and uploading it to the site. Shouldn’t you be able to get a little compensation for your efforts. Plus, once you set up your ads, it takes very little effort to maintain them. You essentially can get money while you sleep (or film more videos).

The potential for revenue on YouTube is difficult to ignore. The channel has more than 1.5 million regular monthly users. Each of these regular users watches YouTube videos for an average of an hour every day. Increasingly, users are watching YouTube videos on their Smart TV sets. Post interesting videos, create a following for your YouTube channel and you have an audience not only for your videos, but for your ads.

Ad Formats to Consider

YouTube (and Google) offer a variety of styles of ads to place on your YouTube pages. These include:

  • Display Ads — Display ads appear on the right side of the featured video, about the suggested video column. Note: These only appear on the desktop platform. Because these ads are limited to desktop viewing and can be easily overlooked, they are less popular with many advertisers. However, display ads can be effective if you have a tight niche with little competition. Display ads are also very affordable and can cost as little as 3 cents per view.
  • Overlay Ads — Overlay ads appear on top of the lower 20 percent of your video and can be either text or video ads. These, too, only appear on the desktop platform. These are a great way to drive traffic to your YouTube channel or to your website.
  • Skippable Video Ads — Skippable video ads are the most popular ad option. These appear before the featured video and the user is able to “skip” from the ad to the featured video after five seconds. You only pay for those viewers who view at least 30 seconds of the video (or the entire video if less than 30 seconds).
  • Bumper Ads — Bumper ads are non-skippable ads that the user must watch before the featured video begins. These can be up to six seconds in length.

Targeting Your Video Ads

YouTube allows you to target each of your ad campaigns. This means having it appear to people with certain buying or geographic characteristics. For example, if you’re promoting your local craft store, you may want to target women who live within 25 miles of your store. Targeting helps you manage your costs by only showing your ad to people who are most likely to be interested in your product or service.

Creating Your Video Ad

One of the most important part of the process of placing ads on your YouTube pages is creating your ad videos. You might think that this is the easy part. After all, you’re already posting videos on your pages. However, if your ad is too amateurish, viewers are likely to skip the ad after the requisite five seconds. Most advertisers find that, although having a professional ad created adds significantly to the cost of advertising on YouTube, it’s worth the cost and effort in the long run.

If you want to produce your own ad videos, YouTube has tools to help you produce your videos.

Bidding

YouTube ads have an average cost per view of between one and three cents. That translates to an average of $2,000 for reaching $100,000 viewers. However, Google doesn’t give you a set price for each ad you run on YouTube. Instead, they ask you how much you want to spend per day on your ads. A good starting average is $10/day. Once you set your daily maximum, you’ll get a range of price-per-click (PCP) options from which to choose. Obviously, the lower the PCP, the most ads you’ll be able to run. Popular keywords have higher PCP rates, but they may be more effective.

Keep in mind that you can modify your targeting and your keywords after you’ve been able to monitor your results over a period of time. Few ad campaigns are perfect the first time; most need a little modification to make them as effective as possible.

Optimization of Your YouTube Campaigns

The way to make the most of your YouTube ads and revenue stream is to determine the keywords that people looking for the type of information in your videos typically type into search engine boxes. In addition, it’s wisest to think of your total return on your YouTube ad investment, not just the initial cost of the ad and its production. To make the most of your ads, you’ll want to review your click-through statistics regularly. It’s a rare ad campaign that fires on all cylinders right from the start. Most require a few adjustments. If your stats aren’t as robust as you’d like them to be, ask yourself (honestly) if your video is compelling enough…or ask an honest friend. Maybe the problem is traffic. Are you using the keywords in your ads and video title and text that users are searching for?

If you use YouTube for fun or to promote your business, it just makes sense to include ads on your pages to get a little compensation for your efforts. YouTube ads are affordable and can not only make you some money, but can put your business name in front of a whole new collection of people who might never learn of your business otherwise.

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