How Much Does YouTube Advertising Cost

Learn About the Factors in Determining the YouTube Advertising Cost

When you’re trying to determine the best avenues for advertising, YouTube should be a serious consideration. This is due to the fact that it is a major platform with billions of users. Your next questions are probably “how much does YouTube advertising cost?” and “how can I track the success?” YouTube uses a metric called CPM, which is the average cost for receiving 1,000 impressions on your ad. If you’re not familiar with impressions, it’s a metric used to determine how many people actually see your ad.

In this article, we’ll explore the costs and factors to consider when determining the price of advertising on YouTube. We’ll also go over the placement formats, tracking tools, and explain how to make the most of your budget.

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Why YouTube?

Digital marketing is critical to a modern ad campaign and video promotion is the core of YouTube’s purpose. Tracking results is easy and with so many users, YouTube is the perfect place to get your message out to the masses. 

Attract the right audience for your videos with built-in demographic tools that are powered by Google Ads. This ensures that your budget is used to target your key personas.

Ad tracking is critical to determine the success of your efforts and this is simple with Google Ads. Build multiple campaigns and set up goal tracking metrics with ease.

Even if your ads don’t directly lead to a sale, you can use the data that is collected to make better decisions going forward. For example, if you notice that your promotions are getting more clicks from a specific age group or gender, you can further narrow down your target audience for the next ad campaign. That way the money that is spent is directed towards the demographics that are most likely to engage with your company or complete a purchase.

Ad Types/Formats

Since YouTube is a video-based platform, your advertisements should be in a video format. You can select a video that has already been uploaded to your YouTube account or upload a new video. Most major video file extensions can be used such as .mp4, .avi, .mpg, or .mov. 

There are also different types of ad placement referred to as formats. Google lists the following available ad formats:

  • Non-skippable in-stream
  • Skippable in-stream
  • Bumper
  • Masthead
  • Outstream
  • Video discovery

You can learn more about these specific placements directly from Google.

Factors of YouTube Advertising Cost

The ad format you select is one of the main factors of ad costs. Even more so if it is bid-based, since it depends on the competitiveness of the target keywords and audience. You can also pay per click or view if this is what the goal of your campaign is. 

  • Bidding Based Ad Placement: Since there are different ad placement types, the cost will differ depending on which one you select. For example, the following ads are bidding based, so the CPM will depend on the competitiveness of the other bidders: Skippable in-stream ads, Non-skippable in-stream ads, Bumper ads.
  • Pay-Per-Click: If your goal is to get viewers to click on something, this would be the best option for you.
  • Pay-Per-View: If you just want to get eyes on your video, pay-per-view may be your best option. Note, there are two different types of metrics used in Google Ads for tracking views: Cost per view (CPV) and Cost per thousand viewable impressions (vCPM).

Making Most of Your Budget

Target the right demographics: To ensure your budget is best utilized, you need to select your target audience with laser-like focus. This is to ensure you are directing your efforts at the right people. Due to this, extensive demographic research is a critical step. Creating personas for your key audience can also help understand your . You can then determine the goal of your ad campaign. 

Select the right format: Determine the goal of your campaign, is it to get as many views as possible or to get people to click on the video? Once you know the goal, you should select the format that accomplishes that. For example if you want clicks, the “Video Discover” or “Masthead” placements are a better option since they have click-based tracking.

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