How Much Do YouTube Ads Cost in 2020

You probably know by now that YouTube is the second largest search engine after Google.

In 2019, the video streaming platform had approximately 1.68 billion users and 2 billion monthly unique users.

These stats alone make YouTube a desirable advertising platform for any business that wants to boost its visibility.

Advertising on YouTube appeared more than a decade ago, and the video ad formats suffered plenty of transformations.

If you’re wondering about the YouTube ads cost and the advertising opportunities on this platform, you’re in the right place.

Going forward, we’ll discuss the YouTube advertising cost, what the video ads entail, and, most importantly, how you can use them successfully to promote your business.

Why You Should Consider YouTube Advertising

Before you go ahead and decide that you want to advertise on YouTube, ask yourself if you can invest in creating high-quality videos.

You can either shoot an actual video or use a platform such as Bannersnack to create your own YouTube ad.

You can also pair your YouTube advertising strategy with the creation of your company’s YouTube channel. The secret is to create a personalized and dynamic channel that’s appealing to the audience you want to attract and convert.

Here are three reasons why YouTube advertising deserves a chance:

1. Reach

One of the main reasons why you should consider advertising on YouTube is the enormous reach of this platform.

Chances are that your potential customers are watching YouTube videos every single day, so why not target them through a YouTube ad?

Maxim Roslyakov, Senior Vice President of Marketing at SEMrush, reinforces this idea by saying that:

“Any YouTube ad is in fact content in itself and as such, these ads can serve different purposes. YouTube ads are a perfect match when it comes to both raising brand awareness, due to its enormous audience, and reaching out to potential customers who might be willing to purchase products and services.”

2. Advanced targeting

Another good reason is the fact that you have access to advanced targeting. This means that you won’t waste money targeting people who aren’t interested in what you’re offering.

You can target users based on gender, age, location, and, of course, more advanced targeting based on topics, keywords, and online behavior.

What’s more, is that you can use Find My Audience to understand more about the audiences you can reach on YouTube.

Another benefit is that you can target both individual channels and creators, which isn’t an option on other mainstream platforms like Instagram or Facebook.

We recommend making a priority out of optimizing your targeting to increase the success of your campaign.

3. Tracking

Even if you’re new to video advertising, YouTube makes it easy for anyone to track and measure the effectiveness of their campaigns.

The real-time insights are going to help you figure out if your video ads are performing just like you hoped for.

Last but not least, don’t forget to check out these guidelines on how to create a YouTube ad.

Now, let’s see how much does it cost to advertise on YouTube.

How Much Do YouTube Ads Cost?

There isn’t a fixed amount when it comes to YouTube advertising cost.

The cost of YouTube ads will vary depending on the length, complexity, number of camera angles, and words in the video script.

Another variable for the cost is the video ad format you choose, so you need to analyze your budget and your needs before making this decision. 

On average, YouTube ads cost around $5,000, taking into consideration the process of shooting your video as well as the actual advertising on the platform.

YouTube Trueview ads or in-stream ads will cost somewhere between $0.10 and $0.30 per view, depending on the target audience and marketing goals.

YouTube Discovery ads or YouTube display ads will cost about $0.30 per click.

YouTube Bumper ads are charged by CPM, which means that you only pay each time the ad receives 1,000 impressions. Generally, this type of YouTube ads cost between $1 and $4 per thousand views.

Masthead ads have the highest reach in the shortest amount of time, so prepare for shelling out a hefty amount of money. Considering the filming of your video and the YouTube advertising cost, $5,000 should be the bare minimum budget if you need a more complex campaign such as this.

What most advertisers do is allow a minimum of $10 per day for a campaign and then raise this amount once they found what best works for them.

An average YouTube advertising cost per view is between $0.010 and $0.030. Therefore the total amount per 100,000 will be around $2,000. 

6 Video Ad Formats You Can Create For YouTube

There are several types of video ads you can use to promote your business on YouTube.

What’s great about most of them is that you won’t have to pay anything unless people show interest and interact with your ad.

We’ll go through all of them as each offers different benefits.

1. Skippable in-stream ads (previously named TrueView ads)

These are the classic ads that pop up at the beginning of every video ever since YouTube started offering video advertising.

They used to be known as TrueView ads, but that name was changed since now you get the option of controlling the billing time of the video. 

This particular ad format can be played either at the beginning, middle, or end of a video. The allowed length of the ad should be between 12 seconds and three minutes.

However, the most popular ones are around 30 seconds long. As previously mentioned, you’ll only be billed if someone interacts with the ad or watches 30 seconds of it.

If it’s a shorter one, they’ll have to watch the whole thing.

Since this video ad format allows the user to skip whenever they want after five seconds, your video needs to make the person take action in just a few seconds.   

As shown in the example above, even though the video is 1:28 min long, users can skip after only five seconds.

The ad also features what’s being advertised clearly.

There’s also the option to learn more about the offering on the official website. This means that the important information is all there, and even if the users don’t choose to interact with it, they still know what the ad is about and might decide to look it up later.

2. Non-skippable in-stream ads

These ads can also run at the beginning, middle, and end of a video, but unlike the previous format, they cannot be skipped, and the user has to watch the entire video.

They can only be 15 seconds long or shorter, so your message has to be clear and concise as well as appealing.

You wouldn’t want the viewer to be frustrated that they have to watch a bland and annoying 15-seconds long ad before getting to the video they want.

Maxim Roslyakov, Senior Vice President of Marketing at SEMrush adds that:

“These are a brilliant way of connecting with an audience for those 15 seconds where the YouTube user cannot turn the ad off. By enforcing users to watch the ad from beginning until end without any option to skip you are putting your brand on the radar. It’s a way to be remembered and at the same time it is a smart way to convey your brand’s key message.”

This example from Vimeo is very well done.

It’s already a well-known video platform, so there’s no need to get into too many details. The ad is mainly used to build brand awareness.

3. Video discovery ads (previously named In-Display ads)

This type of ad will not appear before, or during a YouTube video, but it will show as a suggestion in the search results or as related videos in the right-hand sidebar.

It can also appear on the YouTube mobile homepage. In this case, you will be billed every time someone plays the video, regardless of the length of the video that they’re watching.

These types of video ads are great for demonstrating how a particular product works or what it has to offer, as in the example below.

Following the user’s search “how to make bread,” the first suggestion is a video ad for bakery equipment, more precisely, a rack oven for bread and pastry production.

The ads will always be relevant to the user as they rely on the exact keywords that were used when phrasing their search. 

4. Bumper ads

Bumper ads are non-skippable video ads that, unlike the in-stream ones, are only six seconds long or even shorter. As expected, you will be billed every time they appear.

They’re also better suited to businesses that want to build brand awareness. Since they’re very short, the information has to be minimal and clear.

The benefit is, however, that you will have the attention of your target audience for six seconds. Therefore the users will probably gain some knowledge about your business, having watched the full ad. 

This type of format is also more bearable than others since users don’t have to wait for the “skip” button to get to their video. Instead, they just have to be patient for six seconds, and the YouTube video will then play automatically.

5. Outstream ads

Outstream ads are just perfect for when you want to expand your campaign to mobile devices as well. These are usually seen on websites and apps that have a partnership with Google and not on YouTube pages.

For mobile web placements, this type of ad usually appears in banners, either in portrait or full-screen mode.

What’s particular about them is that they start playing automatically with the sound off, and viewers can tap the video to unmute it.

For this type of ad, you’ll only be charged when the user watched two seconds or more of the video ad, so, again, only actual interested users will drive the cost up.

6. Masthead ads

This one is a more costly ad format and can only be used through a reservation with a Google sales representative.

It’s perfect for when you want to reach a massive audience, and your purpose is to boost your brand’s awareness in a short amount of time.

These ads are found at the top of the YouTube feed, and they autoplay with sound off for 30 seconds or more.

These ads can either be in a widescreen or 16:9 aspect ratio format and include information directly from your channel in the right-hand side panel.

However, these types of YouTube ads cost more than the others, since they’re based on a cost-per-day or cost-per-thousand-impressions.

You can get an estimate once you have a discussion with the Google advertising team.

Setting Your YouTube Ads Goals

Before you go ahead and start spending money on YouTube advertising, it’s essential to know what you want to get out of all this.

Do you want to be noticed, drive more interest in your brand, or boost conversions?

If your goal is to build awareness and ad recall, then you’ll have to work towards making a video ad that captures the attention of potential customers while retaining the interest of existing ones at the same time.

For this purpose, you can use in-stream ads that help you reach your audience within seconds and are also cost-effective. Another option would be bumper ads that help you share your message to potential clients in just six seconds. Outstream video ads and masthead ads are also suitable ad options for this goal.

The goal of boosting consideration and interest is a more complex one since your objective is to influence potential clients in the moments when they’re most receptive to suggestions.

The best ad formats to use for this particular goal would be the in-stream ads and discovery ads. They both help successfully deliver your message. The first type of ad can help you make an impact, and the second video ad format will be seen only by an interested audience.

If driving action is your primary goal, then skippable in-stream ads for action could be your best bet.

Even though it’s a skippable format, you get to decide how long your ad is, and you have the option of optimizing it so you can reach your target audience.

Conclusion

Even though YouTube is an excellent platform for promoting your business, you mustn’t just rely on this.

Define your strategy and your goals clearly before even deciding what type of video ad format to go for.

Most importantly, develop your message in such a way that it can be attention-grabbing, informative, and trustworthy, especially when you have only a few seconds to catch someone’s interest. 

Then, find out what works for you, optimize along the way, and measure your results. 

Have you considered YouTube advertising? I want to know what were your takeaways and whether you have any additional tips.