How Much Does YouTube Advertising Cost?

YouTube has become an integral part of many shoppers’ buying process. From product reviews and tutorials to shopping haul and unboxing videos, 68 percent of YouTube users check the platform for valuable information before making a purchase decision. There’s no better time for brands and businesses than now to advertise their products and services and capture high-intent leads on the channel.

Integrating YouTube advertising into your digital strategy can maximize your investment returns due to these main reasons:

• With 2 billion monthly active users, YouTube is the second largest search engine, next only to Google, its parent company.
• YouTube Ads belongs to the Google Ads network, so you get access to the latter’s hyper-targeting features. Also, Google feeds information about user activity to YouTube to show more relevant ads to users. For instance, if a person typed “healthy quarantine meals” on Search and then went to YouTube to watch a video, they could be shown ads related to “healthy quarantine meals.”
• The cost of YouTube ads is generally cheaper than Google pay-per-click (PPC) ads.

All of this sounds great, but you may be wondering: How much does YouTube advertising cost? There’s no definitive YouTube pricing for ads, but here are some rough averages:

• YouTube cost per view (CPV) can range from $0.10 to $0.30. That’s $100 to $300 per 1,000 views, and it takes around $2,000 to reach 100,000 views.
• A good medium for cost-per-thousand-impressions (CPM) is $2.

Actual YouTube pricing would differ from business to business, even campaign to campaign, depending on several factors. In this article, we’ll delve into the factors that affect YouTube ad pricing. Don’t miss a beat because everything we put here will help you decide how to make the most out of your advertising budget. Our focus:

1. How Much Do YouTube Ads Cost: 5 Factors To Consider
2. 5 Ad Types You Should Know and the YouTube Video Ads Cost for Each
3. How To Make the Most of Your YouTube Advertising Budget
4. Getting Ready To Roll Your Video Ads

How Much Do YouTube Ads Cost: Five Factors To Consider

You can get five different answers if you ask five YouTube advertising specialists, “How much does it cost to advertise on YouTube?” That’s because certain elements dictate final YouTube advertising pricing. Let’s take a look at the five factors that define YouTube ad expenses:

1. Your Goal

To resolve the question “How much do YouTube ads cost?” you must first ask, “What is the specific business goal you want to achieve with this campaign?” To answer, pick one among these predefined options from Google Ads:

• Drive sales
• Generate leads and conversions
• Send traffic to your site
• Boost product or service discovery – great with video!
• Broaden reach and build awareness

You also have the choice to “Create a campaign without a goal’s guidance,” but this is an advanced setting and is best handled by campaign customization experts, such as a YouTube video marketing company.

Why take the time to nail this? Your goal determines what options will be available for you regarding the two top YouTube ads cost variables: ad type and bidding strategy.

2. Your Budget

A daily budget of $10 is a good place to start for local campaigns. Multiply this amount by the number of days you wish to run your campaign. Experts recommend giving it at least two weeks to gain traction before making any changes.

So, let’s say you are a beginner and want to start with the most basic YouTube ads pricing. How much does YouTube advertising price at this stage?

$10 x 14 days (2 weeks) = $140

For this example, your campaign’s total budget is $140. Note that this amount will be spread evenly throughout the duration of your campaign, accounting for fluctuations in traffic (e.g., how many views your ad is getting). So, the price of YouTube ads can be higher or lower than your budget on certain days but it will eventually average out. Also, even if your total views or impressions exceed what your budget allows, you’ll only be billed $140 at the end of your campaign.

3. Which Targeting Methods To Use

Now we get to the exciting part. Strategic targeting helps you reach the right audience, so you don’t want to go too wide or too narrow. Consider the demographic targeting options in the image below.

Sample available impressions with the demographic set as above: 300 million

While checking all items results in a higher impression volume (e.g., 1.5 billion impressions), it doesn’t necessarily guarantee you’ll hit your business goal, whether it’s product or service consideration or conversion. Impressions refer to the number of times your ad is displayed. And say, for a local campaign, aiming for 1.5 billion impressions is casting your net too wide, don’t you think?

Meanwhile, selecting only the demographics that apply to your prospective customers, just like in the image, helps maximize the price of YouTube ads. Your ads will be shown to people who fit your buyer persona, aka those most likely to buy your product or service. Keep this in mind when customizing your targeting options, which fall in any of three categories.

• Location – Grouped by geographic location
All countries and territories, United States and a custom location
• Audience – Identifies who you want to reach
Demographics, detailed demographics (including more specific information like educational attainment and homeownership), interests and video remarketing
• Content – Determines where your ad will appear
Placement (e.g., you can choose to show your ad on specific YouTube channels}, topics, keywords and devices

You can make the most out of your YouTube ads cost per view if you focus on including a few crucial items in your targeting mix. And, by the way, views are a much better metric than impressions since they tell you how many times your ad has been viewed.

4. Which Ad Type Is Appropriate

This is one of the most critical factors to consider when you’re asked, “How much does it cost to advertise on YouTube?” Find out which type and pricing combination of YouTube ads works best for your brand in the section “5 Ad Types You Should Know and the YouTube Video Ads Cost for Each” below.

5. Which Bidding Type To Use

When it comes to your YouTube ads cost, every dollar counts. That’s why you need to understand how bidding on the platform works. Typically, you, as the advertiser, set bids for specific keywords. Factoring in other targeting features like location, Google Ads will display your ad to a searcher for a particular keyword. But if other brands are bidding for the same keyword, Google will display the ad of the highest bidder.

There are several ways to bid on YouTube. The challenge is to choose one that maximizes the cost of YouTube ads. Here are the basics:

• YouTube Advertising Cost per View (CPV): With YouTube cost per view, you pay when someone views or interacts with your ads. A view is counted when a user watches 30 seconds or the whole duration of your video ad (if it’s shorter than 30 seconds) or clicks on a call-to-action (CTA) overlay, card and companion banner (Source: Google, 2021).
• Cost per Thousand Impressions (CPM): You can set the highest amount you’re willing to pay for your ad to appear 1,000 times on the platform.
• Cost per Action (CPA): This refers to the payment you make when a user clicks on your ad and fulfills a desired action, such as purchasing a product or filling out a form. Like CPV, the average price of YouTube ads in CPA is $0.10 to $0.30.

Five Ad Types You Should Know and the YouTube Video Ads Cost for Each

1. Skippable In-Stream Ads

These are the ads that roll before, during or after other videos. After five seconds, viewers have the option to skip the ad.
YouTube ad pricing: CPV, CPM, CPA

2. Non-Skippable In-Stream Video Ads

These ads also play before, during or after other videos but they run for 15 seconds and do not provide viewers with the option to skip it.
YouTube ads pricing: CPM

3. Video Discovery Ads

Your video’s thumbnail image with text appears next to a related video, the YouTube search results page or the YouTube mobile homepage.
YouTube advertising pricing: CPV

4. Bumper Ads
This type of ad lasts six seconds. It is non-skippable and shown before, during or after another video.
YouTube ads pricing: CPM

5. Outstream Ads

Outstream ads are less intrusive in the sense that they start playing without sound and users can choose to unmute them.
Cost of YouTube ads metric: CPM

For more advanced bidding strategies, check out Google’s guide on video ad formats.

How To Make the Most of Your YouTube Advertising Budget

If you’re a business owner or marketer, you know by now how to respond when asked: How much does it cost to advertise on YouTube? You’re also aware that the YouTube pricing for ads can vary. But how do you know when to increase or decrease YouTube ads cost per view? How do you leverage the YouTube advertising pricing so you don’t end up wasting ad dollars? We answer these questions below:

Master the Basics

Setting up a campaign entails some knowledge of how the elements are linked, from the goal to bidding strategy and budget to targeting options. It may take more practice to nail the perfect strategy for each business objective. It’s sometimes smarter for those who have limited time and budget to hire a video marketing agency instead of losing money to experimental campaigns.

Optimize Your Campaign

While it sounds like it has to do with your overall search engine optimization (SEO) efforts, optimizing YouTube ads comes with challenges specific to social media video ads. If your ad is performing poorly, you have the option to optimize for YouTube cost per view or view rate. For instance, to improve the view rate, you can tweak your creative (your ad), like changing your title or end cards and adding or removing a CTA.

Use Quality Videos

If you want optimal YouTube ads cost per view results, you should deliver video content that compels viewers to watch the whole thing. This is where a YouTube advertising agency with video production services enters the picture. With the help of the video marketing agency, you can roll out engaging, professional-looking video ads while launching strategically.

Work With a YouTube Advertising Agency

Choosing to partner with a YouTube video marketing company is about considering the opportunity cost. If you’re a small or mid-sized business with a lean advertising budget and even leaner marketing staff, having a more experienced team tackle YouTube ad pricing and video creation can be more profitable in the long run.

Ready To Roll Your Video Ads?

Learning the factors to consider regarding the question “How much does YouTube advertising cost?” is just the first step. While YouTube advertising can be less expensive and more engaging than PPC marketing, its cost can snowball without strategic campaign planning management.

A YouTube video marketing company may require upfront or monthly fees on top of the costs mentioned above, but it can establish a foundation for your YouTube advertising efforts. Over time, your campaigns can pay for themselves while you’re earning profits exponentially. The key is to find a partner with a proven track record in terms of campaign results and client relationships.

Thrive is a YouTube advertising agency that offers custom, data-driven video advertising strategies to companies from various industries and niches. We take on a unified approach to your digital marketing strategy to ensure all components are working together. By integrating complementary solutions, like social media management, social media advertising (which includes YouTube advertising), brand management and video production, we spread the cost while expanding your investment returns.

Reach out to one of our video marketing agency specialists to learn more about and start leveraging YouTube advertising benefits now.