YouTube Ads Cost: ALL You Need to Know

  • Samuel Darwin
  • Jul 01, 2021

Congratulations on taking the first step into advertising on YouTube! The fact that you’re reading this article means that you’re curious as to how much will your YouTube ads cost. Being curious is always the first step.

There are lots of factors that will contribute to your overall YouTube ads cost. We will discuss them below to give you a more detailed understanding of how YouTube computes for the cost.

But if you want a quick estimate of the general cost, we can look at how much companies usually spend on it. YouTube ads cost ranges around $0.10 – $0.30 per view on average. Your overall YouTube viewer count will depend on how many views you get in total.

Let’s dive deeper into the details below.

How Much do YouTube Ads Cost?

To cut a long story short, your YouTube ads cost depends on a lot of factors. These factors include:

  • Target market
  • Type of Ad
  • Maximum bid
  • Length of the video

If you’re targeting to reach 100,000 viewers, that will cost you around $2,000.

This is a rough estimate based on the common practices of companies that advertise on YouTube. It’s also important to note that this cost covers just the actual advertising on the platform. It doesn’t include the cost of creating the ad itself.

But these are general estimates. To give you a better idea of YouTube ads cost, you have to first understand the factors that contribute to it. This will give you a more realistic estimated cost that targets your needs.

Types of Ads

Table summarizing the 7 different types of ads on YouTube.
Table of Different Types of Ads on YouTube

As mentioned earlier, this will influence the cost of your ads. A good rule of thumb is that the more space your ad takes up in a video, the more expensive it is.

It’s important to understand the different types of ads because each of them has its own benefits. You’ll need to know how each one works, so you’ll get a better idea of which one will fit your needs better.

1. Display Ads 

This is an example of how a display ad looks like.
Example of a Display Ad

This ad is located at the top right of your screen. These are the ads that appear on top of your suggested videos.

Display ads can be effective on other platforms. But it’s worth considering that this type of ad on YouTube is not placed on top of the video that the user is watching. This is why some advertisers are conservative in using this ad.

On the bright side, this type of ad can go as low as 3 cents per view.

2. Overlay Ads

This is an example of how an overlay ad looks like.
Example of an Overlay Ad

These are the ads that you see on the bottom of your screen when you’re watching a video. They’re semi-transparent, so they don’t distract the users too much.

These ads can appear on anyone’s video. But then again, tailoring it to target the right market is still the best way to go. After all, the ultimate goal is to encourage people to click on it and learn more about you.

3. Skippable Video Ads

This is an example of how a skippable ad looks like.
Example of a Skippable Ad

These ads used to be called TrueView ads. We’re all familiar with this type of ad because these are the ads that pop up at the beginning of a video. They can also be placed in the middle or at the end of a video.

The defining feature of this ad is, as the name suggests, users have the ability to skip through them. These videos can range from 12 seconds up to 3 minutes. The most popular length though is around 30 minutes.

Users can skip the video after 5 seconds. If you’re worrying that 5 seconds is too short, the ad also shows important information about it. In the event that the users would want to skip it but are mildly interested, they can look it up later.

4. Non-Skippable Video Ads 

This is an example of how a non-skippable ad looks like.
Example of Non-Skippable Ad

These are similar to skippable video ads in the sense that they also appear in the beginning, middle, or end of a video.

The main difference between the two is that this type of ad does not give users the option to skip it. The length of this video is also limited to only 15 seconds.

Because of this, your ad has to be sweet, short, concise, and memorable. You only have 15 seconds to pique the interest of your viewers.

5. Bumper Ads 

This is an example of how a bumper ad looks like.
Example of a Bumper Ad

This is also a kind of non-skippable ad. But unlike the previous one, this only plays for 6 seconds or even shorter. This is why users have to wait for the full 6 seconds to end then they can get back to watching.

Because of how short it is, this type of ad is best suited for building brand awareness. Your message has to be short and concise because you don’t have a lot of time to explain.

6. Sponsored Cards

This is an example of how sponsored cardd looks like.
Example of Sponsored Cards

These show users information that is relevant to your ads. It may contain the product or service you’re advertising. This gives your audience a sneak peek of what you have to offer them, so they’ll be encouraged to engage more with you.

7. Masthead Ads

This is an example of how a masthead ad looks like.
Example of a Masthead Ad

For this one, you’ll have to reach out to a Google sales representative to book a reservation. They can also help give you an estimation of your overall YouTube ads cost.

It’s a prime spot to place an ad because they show up on top of a YouTube feed. Because of the abundance of people who are likely to see the ad, this type of ad tends to be a bit pricey.

These ads are great for establishing brand awareness. They automatically play when users see their YouTube feed, but they’re on mute, so it’s not distracting.

Maximum Bid

YouTube’s ads use a Cost-per-view (CPV) type of bidding. This means that you’ll be paying for video views or the interactions users have with your ad. This is an important part of determining your YouTube ads cost so let’s discuss it in detail.

A view depends on the type of ad. Let’s take skippable ads for example. The user has to watch the first 30 seconds of your ad for it to count as 1 view.

To be able to set up your CPV, you have to determine the highest possible amount that you’re willing to pay per view. This is your maximum CPV or simply called max CPV.

Your max CPV is different from the actual CPV. This is the final amount you pay after the bidding process is done. This is Google’s way of ensuring that you only pay for what you need.

Let’s look at an example to better understand how bidding works and how it influences your YouTube ads cost.

For example, your max CPV is 20 cents. A competitor bids for 15 cents. Since your max CPV is higher than that, you’re the top bidder. Google only charges 16 cents because the next bid is only at 15 cents. The 16 cents you pay is the actual CPV.

Why Advertise on YouTube?

1. Reach Far and Wide

YouTube is considered the second largest search engine and also the second most visited website, ranking just next to Google. This is because of YouTube’s user-friendliness and how most people prefer to take in information via video clips.

YouTube processes more than 3 billion searches a month. The platform is so big, it’s bigger than Bing, Yahoo, Ask, and AOL combined. Aside from having nearly 1 in 2 internet users on YouTube, there are also 1 billion unique visitors every month.

The market present in this platform is ginormous. You can even reach the far corners of the world through it. It would be such a wasted opportunity if you don’t maximize advertising on YouTube.

2. Track Ad Metrics Easily

When you invest time, money, and effort into a project, you would want to know how well it did. With advertising on YouTube, you’ll be able to know exactly how well your ads performed.

Here are the key metrics that you can measure for your ad campaigns.

  • Views
  • View rate
  • Clicks
  • Click-through rate
  • Engagements
  • Engagement rate
  • Unique viewers
  • Video played to 25% / 50% / 75% / 100%

Your last ad didn’t do so well? Let’s see what we can improve on. This ad was a hit? What did we do well, so we can keep doing it? Knowing how well you did with these metrics will help you make informed decisions.

4. Advanced Targeting

YouTube allows you to specify the target market that you want your ads to be shown. This way, you can make sure that the right people see your advertisement.

Compared to traditional advertising where you just show your commercials to people, this is more cost-efficient. You can rest assure that your budget is spent only to advertise to your target market. No money is wasted on showing your ads to people who are unlikely to interact with them.

You can target the users who will see your ads based on the following:

  • Age
  • Location
  • Gender
  • Keywords used
  • Online behavior

You can even use Find My Audience to be able to understand your market better. Once you’re ready to expand your reach, you can also use this to find a relevant audience. Find My Audience helps you make informed decisions as to how to maximize your target market and the bids you set for your ads.

Key Takeaway

Advertising on YouTube can be a bold big step for your company.

You’re opening up new possibilities for a bigger market to see what you can offer them. You might also be looking to expand your target market through this since you can determine who sees your ads. You might as well be scaling up your advertising plans to a global scale.

The important thing is, you’re starting, and learning about it is a great place to start.

Granted, computing for your YouTube ads cost can be a long process, the benefits are worth the struggle. There’s so much to consider in finding the right way to advertise. Good thing YouTube makes it easier for you to determine which strategies work and which don’t.

Take a moment to understand how YouTube ads work and what contributes to your YouTube ads cost. It will benefit you in the long run if you have a good foundational knowledge of how it works. From here, you can start experimenting with your ads.

Good luck on your YouTube advertising journey!

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