People spend about 19 minutes each day on YouTube, adding up to a whopping 120 hours annually. Considering it’s the second most popular search engine globally, YouTube advertising offers significant reach – 32.4% of the total population and 51.8% of internet users, to be precise.

This beginner-friendly guide to YouTube advertising provides all the information needed to launch a successful ad campaign on this expansive platform.

Table of contents

• Why use YouTube for advertising?
• What is the cost of YouTube ads?
• Different kinds of YouTube ads
• Metrics for YouTube advertising
• Ten steps to start advertising on YouTube
• Creating effective YouTube ads

Why use YouTube for advertising?

In this year’s Google Marketing Live, Google put a strong emphasis on visual content, even announcing a new feature for advertising within YouTube Shorts. Let’s explore some additional advantages of utilizing YouTube for advertising.

• Visibility: YouTube holds the position of the world’s second-largest search engine.
• Sales: A significant 70% of individuals have made a purchase after encountering a product through a YouTube ad.
• Brand personality: YouTube videos allow for the creation of distinctive brand interactions, effectively showcasing your business’s unique character.
• Data: YouTube analytics offers a treasure trove of information, including details like when viewers stop engaging with a video. For instance, consider these YouTube Studio reports, which aren’t available in Google Ads analytics.
• Reaching out again: You can execute retargeting initiatives directed at individuals who have previously engaged with your videos on YouTube or across the Google Display Network.

What is the cost of YouTube ads?

Similar to Google Ads pricing, the cost fluctuates depending on your specific business and objectives. Nevertheless, here’s a general estimate for YouTube advertising costs from LOCALiQ:

• Most companies end up paying a CPM (cost per thousand impressions) ranging from $4 to $10.
• A typical daily budget allocated by businesses for a YouTube advertising endeavor falls between $10 and $50.
• Reaching 100,000 views for your YouTube ad generally requires an average investment of around $2,000.

For additional guidance on YouTube advertising expenses, we offer six strategies to make your YouTube advertising more cost-effective.

Different kinds of YouTube ads

When envisioning a “YouTube ad,” a 30-second skippable in-stream ad might come to mind. However, you may not have known its specific name! Numerous YouTube ad formats cater to various goals and are, of course, constantly evolving. Currently, six YouTube ad formats exist:

• Skippable in-stream ads: These ads run before, during, or after other videos, offering viewers the option to skip them after the first five seconds.
• Non-skippable in-stream ads: Also appearing before, during, or after videos, these ads cannot be bypassed and are limited to a maximum of 15 seconds.
• Bumper ads: With a maximum duration of six seconds, these non-skippable ads play before, during, or after other videos.
• Outstream ads: Designed exclusively for mobile devices, these ads are displayed on Google video partner sites, excluding YouTube.
• Masthead ads: These ads occupy a prominent position on the YouTube home feed.
• Overlay ads: Unlike video ads, these are text/image-based display ads that appear on YouTube videos specifically for desktop users.
• In-feed ads: Previously known as Video discovery ads (not to be mistaken for Discovery campaigns), these are not technically video ads. They enable your video to be recommended by YouTube in search results and the “watch next” section. Here’s a visual representation of an in-feed ad on mobile:

When deciding on a YouTube ad format, consider these important factors:

• Duration: While your video ad can be any length, a “view” is typically recorded at the 30-second mark or when the video concludes, whichever occurs first. Bumper ads are limited to six seconds, non-skippable in-stream ads to 15 seconds, and skippable in-stream ads to 30 seconds.
• Skippability: Will viewers have the choice to skip your ad after six seconds, or are they obligated to watch it in its entirety? Bumper ads and outstream ads lack the skip option.
• Network: An in-stream ad refers to a video ad displayed within the YouTube video player, while an outstream ad plays on other platforms (for instance, within a display ad space on a partner website).
• Audio: A staggering 95% of YouTube videos are watched with the sound enabled, starkly contrasting with Facebook’s 15%. Most YouTube ads will play with audio activated. However, outstream ads and Mastheads, by default, begin with the sound muted.

Metrics for YouTube advertising

Distinguishing between a “view” and an “impression” in the context of YouTube ads is crucial.

• Views: For skippable ads, a “view” is counted at the 30-second point or at the ad’s end, whichever comes first. A “view” holds a similar meaning to a “click” on a Search ad – an indication of active engagement.
• Impressions: Non-skippable ads, lacking the option to skip, accumulate only impressions, not views. The user doesn’t have the autonomy to choose whether to interact. Essentially, regardless of the ad format, every view counts as an impression. However, only those who actively choose to watch your ad are considered engaged, making them the sole candidates eligible for inclusion in your YouTube remarketing lists. Remember this crucial point when developing your YouTube ads strategy! Remarketing to individuals who have only been exposed to a bumper ad is not possible. As bumper ads are non-skippable, they only generate impressions, not views. However, you can target individuals on your remarketing list with bumper ads. Also, keep in mind these four frequently overlooked, yet valuable, YouTube metrics:
• Video played to
• Earned actions
• View-through and cross-device conversions
• Audience performance

How to advertise on YouTube (step-by-step)

Before launching a YouTube campaign, determine whether your primary focus is on awareness, consideration, or conversion. This choice will influence your selection of ad format and bidding strategy later on. For example, an awareness campaign might prioritize maximizing impressions, leading you to bid on impressions. Conversely, a conversion-focused campaign aiming for online sales would necessitate bidding for conversions. We will delve into this in greater detail later. Now, let’s outline the steps involved.

1. Create a new campaign

Access your Google Ads manager and choose “New Campaign.” When prompted, I consistently opt for “Create a campaign without a goal’s guidance.”

When selecting your campaign type, choose “Video.”

2. Choose your campaign subtype

For the campaign subtype, select the option that best aligns with your ad’s intended outcome, your objective, and the desired format. If unsure, a Custom video campaign or a Drive conversions campaign is generally suitable. Remember, you have the flexibility to modify this later if needed.

3. Set your bid strategy

Your available bid options might be limited to one or two choices depending on your chosen campaign subtype. In our example of a Custom video campaign, the bidding options are Maximum CPV (cost per view) or Target CPM (cost per thousand impressions).

Bidding: Prepare yourself because YouTube ads bidding can be even more intricate than Google Ads bidding. Every format comes with specific bidding requirements, which are determined by your chosen format. The possible options include:

• Target CPM: This involves setting your desired price per thousand impressions (commonly employed for non-skippable in-stream ads).
• Viewable CPM: With this option, you establish your target price per thousand viewable impressions (utilized for outstream ads).
• Maximum CPV: Similar to Manual CPC bidding, this entails setting the highest amount you’re willing to pay per view. This is my typical bid strategy for YouTube campaigns unless targeting a low-funnel audience with a strict conversion objective.
• Maximize conversions: This empowers Google Ads to strive for the highest number of conversions attainable within your budget.
• Target CPA: Set your desired price per conversion.

4. Choose your network(s)

If you’re someone who prefers to keep Search partners and the Display Network out of your Search campaigns, deselecting Video partners on the Display network is advisable. Keep in mind that certain campaign subtypes or even specific bid strategies might restrict your ability to deselect some of these choices.

5. Select your content exclusions

For most advertisers, the Standard inventory setting will be adequate. If you’re particularly cautious about your ads appearing alongside potentially sensitive material, opting for Limited inventory is recommended. Conversely, if the context of your ad placements is inconsequential, choose Expanded inventory – this unlocks a broader range of positions, potentially at a lower cost due to reduced competition.

Additional context exclusions: Even with Standard inventory selected, you retain the ability to exclude specific content categories. Personally, I tend to exclude Live streaming videos and embedded videos, but this stems from individual preference rather than established best practices. Again, if you’re concerned about the nature of the content your ads are displayed with, excluding “Content not yet labeled,” “DL-MA,” and potentially even “DL-T” is advisable.

6. Add related videos

This aspect of YouTube campaign setup is frequently overlooked. Remember to incorporate related videos from your channel to enhance engagement. Additionally, if your Google Ads account is linked to a Google Merchant Center product feed, make sure to activate the option here. This allows product cards to accompany your video ads. For those inclined to fine-tune settings like frequency capping or ad scheduling, you’ll find them tucked away under “Additional settings.”

7. Set your targeting

YouTube campaigns provide advertisers with access to the full suite of targeting capabilities offered by Google Ads. All audience types are at your disposal, along with a wide array of contextual options.

When defining your campaign targeting, you’ll encounter two primary choices: people and content.

• People: This enables targeting based on your intended audience, irrespective of the videos they’re watching. Targeting individuals can be done through:
  • Demographics: Filter by age, gender, parental status, household income, or any of Google’s predefined audiences.
  • Audience segments: Utilize any of Google’s pre-established audiences or your personally crafted Custom audiences. Options include targeting people who’ve recently married, are actively seeking accounting software, share similarities with your current customers, have specific apps installed on their phones, or have recently viewed your YouTube videos.
• Content: This allows you to focus on the type of videos alongside which you want your ads to appear, regardless of the viewers’ identities. The “content” options facilitate ad targeting based on keywords, topics, or placements:
  • Keyword targeting provides the highest level of specificity, ensuring your ads are displayed alongside content relevant to your designated keywords. This approach can be particularly effective for formats like in-feed ads, given their potential to appear within search results.
  • Placement targeting empowers you to strategically position your ads on specific YouTube videos, channels, “lineups” (such as “popular content”), as well as certain apps or websites, mirroring Display campaigns.
  • Topics targeting, functioning similarly to Display campaigns, enables the display of your videos alongside content related to particular themes, like “Hiking & Camping” or “Exotic Pets.”

My preference generally leans towards people targeting over content targeting. However, a broad spectrum of options exists, and they can even be combined to refine your reach. For instance, you could target individuals actively searching for Child Car Seats while restricting ad display to content specifically about Child Car Seats.

8. Create your ad

It’s time to bring your ad to life. Bear in mind that any YouTube video intended for use as a video ad must be uploaded to YouTube. If you’d rather your ad not appear on your channel, simply designate it as “Unlisted” instead of “Public.” Insert the URL for your YouTube ad here, and depending on your campaign subtype, additional options will emerge. In our example, we have the choice to create either a skippable in-stream ad (the standard type) or an in-feed video ad (characterized by a thumbnail and description).

9. Set your bid

Determine your bid, and you’re all set to launch your campaign! In this scenario, I’d typically commence with a Max CPV bid ranging from $0.05 to $0.10.

10. Measure your success

How do you select the most appropriate metrics for your campaign? Start by recalling whether your primary objective revolves around Awareness, Consideration, or Conversion. If your YouTube campaign centers around awareness generation, evaluating its success based on conversion rate wouldn’t be logical. As a general guideline for any Google Ads campaign, I advocate for choosing one reach metric (impressions, views, clicks, etc.) and one efficiency metric (cost per view, view-through rate, click-through rate, etc.). If you collaborate with a dedicated Google representative and your monthly YouTube Ads expenditure reaches five to six figures, consider inquiring about a Brand Lift study. This specialized survey, conducted by Google, gauges the effectiveness of your campaign in driving crucial outcomes such as brand awareness, ad recall, search lift, and purchase intent. However, it necessitates a minimum investment over a specific timeframe, which varies by geographic location. For the most up-to-date program requirements, consult your Google representative.

How to create great YouTube ads with the ABCDs

The most critical element of a successful ad isn’t the targeting, format, or bidding strategy—it’s the creative aspect! YouTube has established a framework known as ABCD—a data-driven guide for crafting impactful video ads. Effective YouTube ads often share these commonalities:

• Attract: They seize your attention within the initial five seconds by employing techniques like tight framing, brisk pacing, unexpected elements, and featuring real people on screen.
• Brand: Within the first five seconds, they introduce your product or brand using a combination of text, visuals, and sound. For example, having actors verbally mention your brand name is linked to favorable Ad Recall and Consideration.
• Connect: They evoke an emotional response from consumers toward your brand by seamlessly blending function and emotion, engaging viewers emotionally (particularly through humor), and enabling viewers to connect with the individuals on screen.
• Direct: They motivate customers to take action by presenting special offers, instilling a sense of urgency, and providing viewers with clear instructions, such as “Buy Now” or “Sign Up.”

To witness examples of highly successful YouTube ads, explore the YouTube ads leaderboard for inspiration. Additionally, consider browsing through our collection of tips designed to help you create more memorable YouTube ads.

Get started with YouTube advertising

1. Create a new campaign
2. Choose your campaign subtype
3. Choose your bid strategy
4. Choose your network(s)
5. Select your content exclusions
6. Add related videos
7. Targeting
8. Create your ad
9. Set your bid
10. Measure your success