Did you know that more than 2 billion logged-in users visit YouTube every month?
That massive audience is making advertising on YouTube a go-to strategy for companies today. If you’re thinking about advertising on YouTube, though, you probably have one big question: How much does YouTube advertising cost?
On average, businesses' YouTube ad costs are $0.10 to $0.30 per view or action, with an average $10 daily budget. Per view or per action means when someone views your ad or engages with your ad — like by clicking on it — you pay $0.10 to $0.30.
This YouTube advertising rate is only an average, though, so your company may pay more or less.
For a more general look at social media costs, watch our video
Are you ready to learn more about the cost of advertising on YouTube?
Keep reading! This guide on YouTube ad pricing covers the value of YouTube advertising, the factors that determine your YouTube ad costs, and how to create YouTube ads that make the most of your budget.
If you need help getting started with your ad campaign, contact us online today!
How does YouTube ad pricing work?
YouTube follows a cost-per-click and cost-per-view pricing model, which is similar to its parent company, Google. This pricing model means your YouTube advertising rates depend on user actions.
If someone watches the entirety of your ad or clicks on your ad, for example, you will be charged for that action. Whether you pay for views or clicks is dependent upon the type of ad you create.
So, how much do YouTube ads cost when someone clicks on your ad or watches your ad? Find out in the next section!
How much does it cost to advertise on YouTube?
When you advertise on YouTube, there is no minimum amount you must spend. This results in two questions: How much you should spend on a YouTube ad and how much does it cost to advertise on YouTube?
The amount you spend on a campaign will depend upon the daily budget you set for your campaign. Most businesses invest $10 or more a day to run an advertising campaign on YouTube. This amount increases as companies know more about their campaign’s performance.
YouTube video ads can cost anywhere from $0.10 to $0.30 per click or view.
In most cases, you’re going to pay on a cost per view scale. Every time someone views your ad, you will pay for that view. It’s important to set a maximum amount you want to spend on views to ensure that you don’t overspend your campaign’s budget.
This isn’t a standard cost every time, but it is the typical rate that businesses experience when they invest in YouTube advertisements. Your YouTube ad prices will vary depending upon the video quality, your target audience, and your campaign goals.
What determines my YouTube ad costs?
A few factors determine how much YouTube ads cost, including:
- Your ad type
- Your bid
- Your bidding selection
- Your targeting options
These factors will generally influence your YouTube advertising rate in different ways. For example, your bid will likely have more of a direct impact on your YouTube ad costs than your bid selection because you’re setting a definitive number for what you’re willing to pay for a click or view.
Learn more about these YouTube pricing factors, like ad type, below!
How different YouTube ads influence your YouTube ad costs
The format of a video will influence the cost of your YouTube ad campaigns. In general, you’ll pay more for bigger ad space and increased ad exposure. Here are the different types of YouTube ad formats you can use:
Display ads: These are ads that appear to the right of the feature video. Display ads appear above the video suggestions list.
Overlay ads: These are semi-transparent ads that overlay a video. They appear on the lower 20 percent portion of your video. Overlay ads give you the option to “X” them out when they pop up.
Skippable or TrueView in-stream ads: Skippable ads appear before, during, and after video content. These ads take up the entirety of the video box but have a countdown timer that generates a button you can click to skip the ad. The button typically appears after the ad plays for 5 seconds.
Non-skippable ads: Viewers must watch these video ads before the content can be viewed. These videos are short and typically only last a few seconds.
Long, non-skippable ads: These ads cannot be skipped and must be fully played. They can last 30 seconds or longer.
Bumper ads: These ads last up to six seconds in duration. They must be watched before someone can view the video content. These video ads get straight to the point and get the message across quickly.
Sponsored cards: These cards display information that may be relevant to your videos. You can run ads to feature products that are about to appear in your video content. It gives your audience a teaser card of the product for a few seconds, which can get them to engage longer.
These different ad formats influence the cost of YouTube ads.
Some of these ads have different payment options based on the actions your audience takes. In some cases, you may pay for them viewing your video, and in other cases, you’ll pay after they watch 30 seconds of your ad.
The audience you target also influences your YouTube ads pricing. If you’re targeting an audience that many of your competitors are targeting, you’ll end up paying more because there is more competition for the ad spot.
You will never pay over your maximum bid, however. Depending upon who wins the best spot, you may pay one cent more than your competitor, but it will never go above your maximum bid.
For instance, let’s say you have a maximum bid of $1 and your competitor bids $0.65 for each click. You can expect to pay no more than $0.66 per click and it’s still within your $1 maximum bid.
How to set up a YouTube ad that makes the most of your budget
YouTube advertising can have a powerful impact on helping your audience learn more about your business. Here are the steps you can take to create a more powerful YouTube ad and optimize the cost of your YouTube ads.
1. Choose who is running your campaign
A video advertising campaign takes time and effort. If you want to drive the best results with your YouTube campaign, you must ensure that you have the right people working on it.
You can opt to create ads in-house and run them. If you have a marketing team, you can create and run ads for your business.
If you choose to run your campaign in-house, you’ll want to budget based on how you decide to run your ads. For instance, if you’re running ads that are a minute long and you pay for someone watching 30 seconds of your ad, you must determine how much that is worth to your company. It may be worth $1 a click or $0.50 a click to your business, but you must decide.
Some companies will opt to let a video marketing company handle their campaign. This is an excellent option if you don’t have experience running a video marketing campaign or if you’re too busy running your business.
When you hire a video marketing company, you can expect to pay several hundred to several thousand dollars.
The cost for your video varies, depending upon its length, words in the script, number of camera angles, and more.
2. Set your target audience
Your target audience is who you are trying to reach with your ad campaign. If you want to have an effective advertising campaign, you must know who you are targeting.
There are different ways you can target your ideal audience. Here are a few:
Demographic groups: This includes attributes such as age, gender, income, or parental status.
Interests: Topics and information your audience is interested in watching through videos on YouTube.
Remarketing: Marketing to people based on their past interactions with your video content.
Topics: You target people based on specific topics they look for while searching on YouTube.
Keywords:Showing YouTube ads based on keywords and phrases your audience searches on YouTube.
These are all the options available to your business. You can choose which format is best for your business based on your budget and your goals.
3. Make quality video ads
If you want to see the best results with your YouTube ad, you must create high-quality content. You want people to watch your ad and engage with your content. For that to happen, you must invest in your video’s quality.
First, you must produce a high-quality video. You don’t want your audience to view a video that is poorly filmed and has low resolution. With the advancement in film technology, it is expected that you produce high-quality video advertisements.
You also want your YouTube ad to provide value for your audience. If you aren’t showing them the value in choosing your business, you won’t have an impact on your audience.
If you’re going to run a YouTube ad campaign, you must plan your ad’s content to ensure that it provides your audience with valuable information. Set a goal you want to achieve with your YouTube ad and convey an advertisement that helps you effectively pass on your message.
4. Keep your ads short
If your ad is too long, you will deter people away or discourage them from watching. This often happens with non-skippable videos. If you have a long, non-skippable video, people will lose focus and may not watch it.
Creating short and effective videos will drive better results for your campaign. As a rule of thumb, your video should be 45 seconds or less. This will give you time to create a quality video without it running too long.
You should get your point across quickly. If someone can skip your video in five seconds, you must ensure you get your message across in those few moments. It’s important to be succinct and get to the point.
5. Create relevant landing pages
Whenever you run an advertising campaign, it’s crucial that you direct your audience to relevant information. You want to connect them with a landing page that expands upon the information in your ad.
Using effective advertising campaigns will allow you to direct leads to a specific page.
That helps them learn more about your product, services, and business. You’ll want to create a specific landing page for your campaign so you can customize it with relevant information to your YouTube ad.
If someone likes the information they see in your ad, they can visit the landing page to learn more about your product or service. It’s a great way to direct relevant leads to your page.
6. Monitor your campaigns
If you want to understand your campaign’s effectiveness, you must monitor its performance. Pushing out quality ad content will help your business continue to grow.
When you run a YouTube ad, you have access to metrics that allow you to see how your campaign is performing. You can monitor metrics like views, likes, shares, and subscriptions. You can also see real-time insights about your campaign to understand it better.
By monitoring your campaign, you’ll produce better results for your business. You will have a more effective YouTube ad that drives results and helps your business grow.
Why advertise on YouTube?
Even though you know the answer to the question, “How much does it cost to advertise on YouTube?”, as well as how to set up a cost-efficient YouTube ad campaign, you may have doubts about advertising on YouTube.
Is it worth your company’s time, effort, and money? Yes.
Advertising on YouTube offers several advantages, which these statistics demonstrate:
- YouTube reaches almost one-third of the Internet
- Mobile ads on YouTube are 84% more likely than TV ads to hold a user’s attention
- 90% of American Internet users (between the ages of 18-44) use YouTube
- 68% of YouTube users watch videos to help them make purchase decisions
When you advertise on YouTube, you gain instant access to a massive audience. This audience size makes it easier for you to reach your target audience via YouTube’s targeting options. In comparison, advertising on a smaller platform limits your access to valuable audience members.
The targeting options available via YouTube advertising allow you to create relevant ads for users too. That’s why YouTube ads perform better than traditional advertising mediums, like TV. Even better, you can use targeting to reach users at the perfect moment, like when they’re researching a purchase.
It’s also fast and easy to create a YouTube ad.
While you can partner with a professional agency, you can also film an ad in-house using a smartphone. For the best results, though, plan your ad in advance. That way, you can create a professional video ad that captures your audience’s attention.
Earn a better ROI from your YouTube advertising
YouTube is an excellent platform for your business to expand its reach. With YouTube's advertising options, you will garner more leads for your business. At WebFX, we know how to create YouTube advertising campaigns that help your business grow.
In the past five years, we’ve driven over $2.4 billion in sales for our clients through our various digital marketing services. We know how to create custom online marketing campaigns that drive meaningful results for your business.
If you’re ready to start advertising on YouTube and making the most of your YouTube advertising costs, contact us online or call us today at 888-601-5359 to speak with a strategist.
Last Updated October 1, 2021