Are you wondering if YouTube ads are right for your business? How do YouTube Ads Work?
In this article, I’ll go over ad formats, when to use them, and how to assess whether YouTube is right for your brand.
Here’s your YouTube advertising guide.
What You’ll Learn:
- Why YouTube is critical for advertisers
- The different YouTube ad formats
- Should you try YouTube advertising?
- How to set up a YouTube ad
- What to put in your YouTube ad
- How to tell if your YouTube ads are working
Youtube Advertising Guide
I’ll lead with this; YouTube is one place online I think everyone needs to be.
Search queries now turn up video results in the SERPs, and YouTube ads have grown beyond the five-second previews that play before videos.
Yes, those skippable ads remain a staple of the YouTube landscape, today’s advertisers now have access to more formats, targeting options, and bidding strategies than ever. You can capture leads, tell a story, and even highlight products for sale.
What’s more, YouTube plays something like 500 million hours of video each day, presenting a massive opportunity for brands to get in front of a wider audience.
Why YouTube is Critical for Advertisers
YouTube has grown into a massive visual search engine, bringing in roughly 2 billion active users every month. It reaches more 18-49-year-olds and provides unmatched targeting options and reach for video ads.
Advertisers don’t compete with the messaging, news updates, and posts from friends and family that they do on social channels, making it similar to TV–but with more control over who sees your ads.
Brands can target individual channels and content creators, use search histories to tap into audience interests, and
As more users leave traditional media for online video content, brands need to get comfortable with video marketing. Otherwise, they’ll lose ground to competitors embracing change.
About half of shoppers say online video helped them make a purchasing decision and Ipsos reports that mobile YouTube ads attract customer attention 83% of the time on average.
Unlike Search and Shopping Ads, which follow a more rigid formula, YouTube Ads allow businesses some flexibility in their advertising approach.
You’ll have the option to capture leads, feature products, or share your brand’s story, insights, and more.
YouTube Advertising Guide: Ad Formats
YouTube Advertising Ad Formats
As mentioned, YouTube Ads come in a few different flavors, ranging from the skippable in-stream ads to boosted posts that feature alongside organic content.
Here’s a look at your options and some key things to know about each one.
- TrueView In-Stream Ads
- TrueView Discovery Ads
- Bumper Ads
- Non-Skippable Ads
TrueView In-Stream Ads
TrueView Instream Ads are likely the first thing that comes to mind when you think “YouTube Ads.”
These ads are designed to reach users specifically interested in your product. You can target your ideal audience, but won’t waste money when you don’t quite get it right.
See, TrueView ads allow users to skip after five seconds and only charge advertisers when someone watches an ad for at least 30 seconds. And, if someone chooses to watch an ad to completion, you can bet they’re interested in what you have to say.
In fact, viewers who watched 30 seconds or more of an ad—were 23X more likely to take action. This means they visited the brand’s website, watched more videos, shared the video, or subscribed to the brand’s channel.
In-stream ads can be up to three minutes long, though we recommend keeping things shorter, around 30 seconds or so. The minumum length is 12 seconds. Advertisers pay based on CPV for 30-second views or clicks (with CPV-bidding) or can run a campaign based on impressions (with CPM)
Unskippable In-Stream Ads
Unskippable ads are longer in-stream ads with a 20-second limit.
These ads don’t come with a banner like their skippable counterparts and are typically used as a way to generate awareness and brand recognition.
Admittedly, you might want to know why non-skippable ads are worth checking out. While you do run the risk of irritating the viewer, this format lets advertisers share the entire message in one go.
Keep in mind that the extended length may have an impact on campaign costs. CPM rates tend to be higher than other ad formats, so you’ll want to make sure you target the right audience.
Bumper ads are non-skippable, but super short–there’s a six-second limit, so you’ll need to get your message out fast.
I recommend approaching bumper ads one idea at a time with awareness and brand affinity in mind. You only have six seconds to get your idea across, so your best bet is to highlight a benefit or a feeling someone might get from using your product/service.
With Bumper ads (and unskippable in-streams, too) you’ll want to pay close attention to ad frequency. If you’re hitting someone in a very small audience 10, 20, 30 times in a month, your attempt to connect with new users will likely backfire.
Show up on the search results page, in related videos, and on the YouTube home page.
Someone is intentionally trying to watch a Discovery Ad, compared to In-stream ads and Bumper Ads where users are forced to watch the ad. Discovery Ads should feel like the type of video content brands post on their YouTube channel.
With that in mind, this format is best reserved for content that tells a story. Think reviews, walk-throughs, tutorials—anything that answers questions, informs, or entertains. In other words, these are the topics you’d cover in a long-form blog post, whereas other ad formats should function more like your web copy.
So, Should You Actually Do YouTube Advertising?
In general, YouTube is one of the best opportunities for brands of all sizes and industries. But whether it’s right for you depends on understanding the platform and having a strategy in place that you can build upon.
Here are a few things to think about before it makes sense to start running ads on the platform.
Do You Have a YouTube Channel, and Does it Have Content?
To be successful on YouTube’s ad platform, you’ll want to have an established channel in place. The reason is, A: you’ll need a channel for hosting your videos (I’ll walk you through setting one up, here), and B: if your ad is effective, viewers will likely check out your channel for more content.
If someone clicks through and there’s nothing there–well, it’s a missed opportunity. You’ll undermine the goodwill you’ve created in your ad and will likely miss out on the chance to grow an audience on the platform.
With that in mind, I recommend taking some time to create a library of high-quality organic content before investing in an ad strategy. If you’re new to the YouTube game, check out these 17 tools for video optimization.
Understand the Costs Involved
Unfortunately, a lot of brands burn through a ton of money because they fail to set up their ads the right way. A typical video ad view costs between $.106 and $.30 per view, depending on your video quality, targeting, and marketing goals.
While the platform is considered an affordable advertising strategy (bidding is less competitive than on search), it’s easy to blow your entire budget by failing to build campaigns on a solid foundation.
Cost per acquisition is higher than other channels. More expensive on YouTube than Google or Facebook—often three times more.
Drill Down into Your Audience
- Demographics: Filters such as age, gender, parental status, or household income of the audience you want to reach.
- Placements: You can choose to place your ad on unique channels, videos or apps within websites.
- Topics:This allows you to target your videos so you can reach a range of videos, channels and websites related to a selected topic.
- In-Market Audiences: These are used to find audiences that already seeking and researching products or services like the one you offer.
- Video remarketing: This allows you to reach audiences who have already interacted with your videos.
- Affinity Audiences: These allow you to target customers who have expressed interest in products or services similar to the ones you sell.
- Custom Affinity Audiences: With custom affinity audiences, you can create audiences that are more tailored to your brands using more specific keywords. So instead of a general keyword ‘healthcare’, you could use something like ‘nurse.’
- Keywords: You can show your video ads based on words or phrases related to a YouTube video, YouTube channel, or type of website that your audience is interested in.
- Interests: You can choose from available audience categories to reach people interested in certain topics, even when they may be visiting pages about other topics.
You Should Always Have a Business Goal In Mind
Aside from considering the cost of advertising, your audience, and your existing mix of video content, you also need to think about what you hope to accomplish by running these ads.
As I mentioned above, YouTube can be expensive if you’re using the platform to generate leads. While you have the option to run TrueView for Action campaigns (in-stream ads with a CTA), the best way to think about YouTube is as an awareness channel.
The reason is, users don’t typically hang out on YouTube because they want to watch ads. They’re looking at music videos, tutorials, watching movie trailers, or learning how to do something.
- Boost Awareness: Use YouTube as a way to reach people who fit your customer profile, but may not know it yet. Target audiences based on existing customer interests and demographics.
- Brand Consideration: Use videos to reach people researching products in your category. In this case, you’ll want to target users based on keywords and search histories, getting in front of people who want to learn more about possible solutions. Here, you’ll really need to make the case for your product–features, benefits, and what you offer that no one else does.
- Grow Your Audience: Target lookalike audiences based on your best customers.
- Increase Brand Loyalty: Invite your customers to talk about your product in your videos and show prospects that you provide the best products and services in the business.
With that in mind, you’ll want consider where you want to run the ad to best support your goals. When you set up your campaign, Google will ask you to choose from the following Ad Networks.
- YouTube Search: YouTube Search shows your ads in the search results alongside organic content. This option is available exclusively to advertisers using the Discovery format.
- YouTube Videos: YouTube Videos shows video ads on the YouTube homepage, watch and channel pages. YouTube supports any of the ad formats mentioned above.
- Google Display Network: Try advertising on the display network if you’d like to take your video strategy outside of the YouTube platform. GDN supports in-stream, video discovery, and bumper ads, and promotes your website across a range of partner websites.
How Do YouTube Ads Work?: Setting Up an Ad on YouTube
Once you’ve decided to start advertising on YouTube, here’s how to get started:
- Log into your Google Ads account and head over to the campaigns section. Click +campaign and select video from the dropdown.
- Name your campaign–and make sure you pick something that’s easy to identify.
- Next, you’ll pick an ad format.
- Set your budget based on how much you’re willing to spend per day. If you’re new to YouTube Ads, start with a smaller budget.
- The next step is selecting a network. You’ll have the choice YouTube Search, YouTube Videos, or Video Partners in the Display Network.
- Next, choose a location. You can go broad–targeting all of North America or by city or state. Location targeting depends on goals and what type of business you have.
- If the goal is to increase reach and build a reputation, you may want to target by language and go broad. But, if you’re promoting a local business, keep things close to home, otherwise you’re just spending your marketing dollars.
- Next, you’ll want to head over to Advanced Settings to select the start and end dates for your campaign.
- Select the ad you’d like to run. You’ll need to make sure that your video is already uploaded to YouTube.
- Next up, you’ll select a format. Keep in mind, if you opt for Discovery, you’ll be prompted to ad a thumbnail, headline, and ad copy.
- Select your bidding strategy.
- Choose your target audience.
Like any other kind of marketing, your YouTube ad content depends on how well you know your audience. This is where all of that business about personas and sales psychology comes into play.
Uncover your audience’s interests, demographics, and motivations to learn what types of videos connect with your target market.
Here are a few ideas you may want to use as inspiration.
- Talking heads: If your brand is more of the B2B variety, YouTube ads are a great way to demonstrate knowledge and thought leadership. This approach works best as a Discovery format, as you’ll have more time to share your ideas. Consider creating a channel full of tips and tricks, best practices, and how-to style content and promote selected videos to your ideal customers.
- Show Off a Product: Video is the best way to show your product in action. Users get more information in a shorter time frame than they would from a blog post or text-based ad. Product demos and how-tos are a great way to build trust with online shoppers by addressing pain points and possible solutions. So much so that Adobe found users who watched demos were 180% more likely to make a purchase than those that didn’t opt into the video. Additionally, Animoto found that 4x as many customers prefer to watch a video about a product than read an article about it.
- Tell a Story: Consider how movie trailers work–they attract viewers by telling a story, offering just enough plot to spark some curiosity. Storytelling ads can operate in a similar manner, stirring up interest in your offering enough to get users to click to your website, check out your channel, or share a video.
Consider using the Discovery format to introduce your brand to a new audience. Or, go episodic and use a series of shorter In-Stream or Bumper ads to form a loose narrative around your product/service.
A few additional things to keep in mind:
- Play to Your Strengths: Run every idea through this question, why should people care? Your videos, whether it’s a bumper ad or a long-form sponsored how-to needs to give users a reason to watch.
- Front Load Key Information: The first few seconds are the most important–particularly if you’re hoping people don’t skip your ad after five seconds.
- Embrace the Format: Different formats bring something different to the table. Unskippable ads allow you to get the whole message out, but you need to be careful about making viewers mad. Geico is an excellent example of how to use humor to appeal to their audience. They made their point in 5 seconds, ending by saying “You can’t skip this GEICO ad … because it’s already over.”
- Include a CTA: Whether you opt for the lead capture or not, do let users know what you want them to do. Examples include subscribing to your channel,
- Have a Plan: Write a script for each video and make sure that it aligns with a specific brand goal. If you’re going the talking head route, make sure that whoever is on camera is engaging, well-spoken, and prepared.
YouTube Advertising Guide: Are Your YouTube Ads Working?
If you’re familiar with Google Ads, you’re likely well-acquainted with the metrics that let you know if your ads are working or not–think cost per conversion, cost per click, impressions, and so on.
With video advertising, there’s certainly some crossover, but there’s a slightly different set of metrics that matter. And, like traditional PPC, those metrics depend on your business goals, the type of ad, and a few other factors.
With that in mind, here’s the quick rundown on the top metrics to keep an eye on.
- View rate: Looks at how many views or engagements an ad receives divided by the number of times your ad is shown — essentially, it’s actual views compared to how many times the thumbnail shows up in someone’s account.
- Avg. CPV: Average cost per view. This is the average amount you’ll pay when someone watches 30 seconds of a video or the duration (if shorter than 30 seconds) or takes an action.
- Watch Time: Looks at the total length of time people watched your ads, represented in seconds. This can help you get a sense of how interested people are in your videos.
- Avg. watch time / impr. Looks at average watch time, divided by the number of possible views. Again, this metric can tell you whether you’re on track with your messaging or if something needs to change.
- Views: Represents how many times someone watched your video ad or took action. This metric reveals how much of your target audience you’re reaching.
- Clicks: Like search ads, clicks represent the number of times viewers clicked a link on your video. Clicks let you know whether you’ve created an engaging ad that makes people want to learn more.
- Video viewership: Viewership is a bit different than Views. This metric offers a breakdown of video completion rates. The benefit is you can see where people lose interest–do they complete 25%, 50%, 75%, or the whole ad?
It’s no secret; video content should be an essential part of your advertising strategy.
As YouTube expands, it’s targeting capabilities and ad formats, the tool has become increasingly valuable to advertisers ranging from small e-commerce stores to web apps and big-name national brands.
Today, YouTube advertising is less competitive than traditional search as fewer brands are bidding for placements. Down the road, this might not be the case–meaning, better to get in on the ground floor now than play catch up later.