YouTube Ads Cost in 2024: How to Launch & Optimize a YouTube Advertising Campaign

How Much Does YouTube Advertising Cost and How to Optimize a YouTube Ad Campaign

YouTube stands out as a platform with immense potential for brands and businesses.

Especially when most advertisers are flocking to platforms like Meta and TikTok...

eCommerce brands have a huge opportunity to differentiate themselves on YouTube.

Let's delve into the intricacies of using YouTube video advertising and the associated costs.

How Much Does YouTube Advertising Cost?

Regarding advertising on YouTube, one of the most pressing questions for marketers is the cost.

There's no one-size-fits-all answer, as the cost of YouTube ads varies widely based on several factors.

But, to give you a ballpark figure, a YouTube ad's average cost-per-view (CPV) ranges from $0.010 to $0.030.

And the cost-per-click (CPC) averages around $0.49.

On average, the cost to reach 100,000 viewers is approximately $2,000.

How YouTube Advertising Works

The cost of running ads on YouTube doesn't come with a fixed price tag. Instead, it's influenced by several dynamic factors:

• Targeting: The more specific your targeting, the more you might pay. But precise targeting also means reaching a more relevant audience, potentially increasing your return on investment (ROI).
• Bidding: YouTube employs a bidding system for ad placements. Your ad cost is influenced by the amount you're willing to bid and the competition for the ad space.
• Ad Formats: Different ad formats come with different pricing structures. For instance, skippable ads, non-skippable ads, and bumper ads each have their own cost implications based on their nature and viewer engagement.
• Viewer Interaction: How viewers interact with your ad also plays a role. For example, you may pay when a viewer watches your ad for a certain duration or clicks on it.

The key thing to note:

The Best Thing About YouTube ad Pricing

There is No Minimum or Maximum Investment

One of the attractive reasons to run YouTube ads is the absence of a minimum or maximum investment requirement.

This flexibility allows companies to start with modest budgets...

Even around $10 per day, and scale up as they gain insights into their ad's performance.

Table: Average YouTube Ads Cost Overview

Cost Factor Average Cost

Cost-per-View (CPV) $0.010 - $0.030

Cost-per-Click (CPC) $0.49

Cost to Reach 100,000 Viewers ~$2,000

In summary, while the cost of YouTube ads can vary, understanding these foundational pricing elements is crucial in setting a realistic budget and expectations for your campaign.

Factors Affect the Cost of YouTube Ads

The cost of advertising on YouTube is not a fixed number but rather a variable dependent on several critical factors.

Here are some things to think about that affects the price of Youtube ads:

• Who you want to reach: Targeting options like age, location, and interests can change costs.
• Competition: If many businesses want the same viewers, prices can go up.
• Ad quality: Better ads can lead to higher Quality Scores, which might lower costs.
• How you bid: Your bidding strategy affects spending. Choose wisely based on goals.

Remember, starting with a set monthly budget helps you control costs.

Google Ads will spread your spending over each day of the month. Some days might cost a bit more, others a bit less, but it balances out.

Don't change your limits too much at first.

Give it time to see how your ads do.

Now, let's talk about each factor.

Targeting Your Video Ads

YouTube's ad platform offers a bunch of targeting options.

Each plays a crucial role in how your ads appear to the ideal audience.

This includes precision targeting based on:

1. User interests
2. Demographics
3. Topics
4. Even leveraging remarketing tactics (for custom segments)

For example, if you're selling a cooking product, you can specifically target users interested in cooking, baking, or food-related topics.

Tailoring your audience with such precision makes your ads more relevant and optimizes your ad spend.

A lot of brands come to us running ads without specific targeting settings.

They end up burning through their budget.

And end up turning a low or no profit.

You need a targeted approach to avoid wasting your budget on impressions that are not aligned with your target market.

Setting geographical limitations is also key, especially if your product or service caters to a specific region.

Here are some of our own settings to minimize your cost to advertise on YouTube:

1. Custom Search Campaigns

Under Custom Segments, you can choose "Custom Search Campaigns" as an option.

Input 10-15 search terms your target customers use.

You'll target people who are actively looking for what you offer.

2. Custom Website Segments

Similarly, add 5-10 websites under the "Similar Websites" option.

This is more interest-based and helps YouTUbe target those with similar interests.

3. Custom Affinity Audiences

Choose the "Interests" option in "Custom Segments.

Insert 5-10 keywords that represent your ideal customer’s interests.

This broader approach helps you reach more people who might be interested but haven’t searched yet.

Bidding Strategy

YouTube uses a bidding system for ad placements, just like Google Search.

So, advertisers have control over how much they spend.

When setting up ads, you can bid a maximum cost per view or impression, depending on your campaign goals.

This approach means you choose how much you're willing to spend for each impression your ad gets.

For instance...

The more narrowly you target your audience, the higher the CPM can be.

Here's what we've tested:

You can use remarketing or custom audience segments as your 'seed audience.

Then, apply the optimized targeting option, which costs between $1-2 per impression.

We've found this strategy to be highly effective.

And it's similar to Meta Ads' broad targeting and allows for reaching users most likely to engage with your content.

Another aspect to consider is the type of audience you target.

Remarketing, targeting users who have already interacted with your brand, can be more expensive (over $10 per impression) but highly effective.

Similarly, custom audiences, which can be built from email lists or social media engagement, start at around $5 per impression.

We recommend you start with Maximize Conversions and then switch to Target Cost Per Acquisition (tCPA) before scaling aggressively.

You can optimize the cost of reaching your desired audience while maximizing the effectiveness of your campaign.

Remember, the key is to manage your max cost per view or impression effectively to ensure that you’re not overspending while still reaching your target audience efficiently.

YouTube Ad Formats - Choosing the Right Ad Placements

Different Type of YouTube Ads for Different Stages of the Funnel

Where eCom brands go wrong is executing Google ads with only 1 generic or 1 branded campaign.

This is one of the most common traps when a brand approaches us for management.

Statistically speaking, at almost any given time, only 3% of the market is ready to buy.

So, if you don’t have a strategic ad funnel in place, you are missing out on the rest of that 93%.

The eCommerce sales funnel is a map of a customer's journey…

From not knowing about a product to buying it.

Picture it as a real funnel: wide at the top and narrow at the bottom.

Don't only consider your YouTube ad pricing...

But the bigger picture too.

Each part of the funnel matches a step in the shopping process.

YouTube ads for the top-of-funnel stage:

Bumper Ads:

Pay for bumper ads. These are quick video ads on YouTube that can't be skipped. These short videos play before or during a video on YouTube. These are great for spreading the word about your brand and capturing potential customers' attention.

YouTube ads for the middle-of-funnel stage:

TrueView In-Stream Ads or Skippable In-stream Ads:

These ads play before or during a YouTube video and are skippable after five seconds. You only pay if viewers watch for at least 30 seconds or interact with the ad, making it effective for engaging users with initial interest.

Video Discovery Ads:

These ads appear on the YouTube homepage, in search results, or as related videos. Viewers can click on them if they're interested, catching the eye of someone already looking for content related to your product or service.

YouTube ads for the bottom-of-funnel stage:

TrueView for Shopping:

These ads link directly to your products and show viewers what they can buy while watching a video. They provide a seamless integration for viewers to click and shop, showcasing product features and boosting sales.

Non Skippable Video Ads - In-Stream Ads:

These ads are 15 seconds max, and viewers cannot skip them.

They guarantee full attention to your offer and deliver a clear and concise message, making purchasing easier for customers.

Crafting YouTube ads for the different funnel stages is crucial to effectively move potential customers through the customer journey.

Now let’s get into some details for each.

Why YouTube ads?

Advertising on YouTube offers a unique blend of benefits, making it an attractive platform for businesses looking to expand their reach and engagement.

Let's explore why YouTube stands out as a prime advertising destination.

Key Points to Consider:

• Broad Audience: With over 2.1 billion monthly users, you have unlimited reach for people to see your ad.
• Search Engine Power: As a top search engine, YouTube offers high visibility and engagement potential.
• Google owns YouTube: So you can enjoy the same benefits from advanced targeting and analytics.
• YouTube's video-based content is more engaging than text-based platforms.

Setting Up an Effective YouTube Video Campaign

Crafting a successful YouTube advertising campaign involves several key steps.

By carefully planning and executing each phase, you can significantly enhance the effectiveness of your ads and ensure a better return on investment.

Pay attention to these steps when creating YouTube ads:

1. Define Your Campaign Goals

The first step in setting up your campaign is to clarify your objectives.

Are you aiming to:

• Increase brand awareness
• Drive traffic to your website
• Boost sales
• Or achieve a different goal?

Clearly defined goals will guide your campaign strategy, from choosing ad formats to targeting and budgeting.

2. Assembling the Right Team

Having the right people working on your campaign is crucial.

Whether you're hiring a professional video marketing company or relying on an in-house team, ensure they have the creativity, analytical skills, and attention to detail needed for a successful campaign.

If you lack experience or time to manage the campaign, consider outsourcing to professionals.

Here at Echelonn.io, we've scaled brands like Foundr, Tabs, Lamborghini, and others through YouTube as part of their strategy.

3. Crafting High-Quality Content

The content of your ads is pivotal.

Make sure you keep your YouTube videos high quality.

Remember, a poor-quality video may do more harm than good, no matter how much you spend on advertising.

4. Keeping Videos Short and Engaging

Given the short attention spans of online audiences, it's crucial to make your videos concise and impactful.

Shorter, to-the-point videos tend to drive better engagement and results.

We've seen the best ad length ranges from 30-60 seconds.

5. Creating a Relevant Landing Page

Your ad should lead viewers to a landing page that is directly relevant to the ad's content.

This helps provide more information to potential customers and enhances the effectiveness of your click-through rate.

6. Monitoring and Adjusting the Campaign

Once your campaign is live, continuously monitor its performance using YouTube's analytics tools. Pay attention to metrics like view rate, watch time, and engagement. This data will help you understand how your audience responds and where adjustments may be needed to improve performance.

Case Study: Effective YouTube Campaign

A recent campaign by [Brand Name] showcased the power of a well-executed YouTube ad campaign. By focusing on high-quality, short videos and targeted advertising, they achieved a [specific result], demonstrating the potential of YouTube ads when strategically implemented.

Creative Strategy for YouTube Video Campaigns

Like TikTok and Meta, your creatives influence how much your YouTube ads perform.

We follow these rules for our creatives:

• Show your product or brand in the first 30 seconds of your video.
• Ideally, use UGC. Make it look organic. People run from ads.
• Use strategic voice or text overlays (but not too much) to guide people through the video.

These creatives are great at convincing potential customers to click on your ad.

Optimizing Your Cost to Advertise on YouTube

Optimization is a crucial aspect of any successful YouTube advertising campaign.

It's not just about how much you spend on your YouTube ads but rather how effectively you use that budget to achieve the best possible return on investment (ROI). Here are some key strategies to optimize your YouTube campaigns:

Monitoring Campaign Performance

Regularly reviewing your campaign statistics is vital.

The most important metrics to focus on are:

• View Rate: This shows how compelling your ad is to your audience. A low view rate might indicate that your content isn't engaging enough or that you're not reaching the right audience.
• Click-Through Rate (CTR): This metric will tell you how effectively your ad encourages viewers to take the desired action, such as visiting your website or making a purchase.

Making Data-Driven Adjustments

Based on the insights from your campaign performance, you should be ready to make necessary adjustments.

This could include tweaking your ad content, refining your targeting, or adjusting your bidding strategy.

According to digital marketing expert Neil Patel, Gatorade achieved an impressive ROI of $13.50 for every $1 spent on their YouTube ads. This success was attributed to constant monitoring and optimization of their campaigns.

Bidding Strategies

It's essential to fine-tune your bidding strategies over time.

Be prepared to increase your bids for better ad placements if needed, as can influence the ads that appear on your selected formats.

And potentially better overall campaign results.

Experimentation

Don't hesitate to experiment with different ad formats, targeting options, and content styles.

Sometimes, a small change can lead to a significant improvement in campaign performance.

Conclusion

Remember, the key to a successful YouTube campaign is how much you spend and how wisely you allocate your budget.

Through careful planning, continuous optimization, and keeping an eye on performance metrics, advertisers can harness the full potential of YouTube ads, achieving desired outcomes within their budget constraints.

As we conclude, it's clear that when done right, YouTube advertising can be a highly effective way to grow your brand and reach a wider audience. With its vast user base and sophisticated targeting options, YouTube is a powerful platform for businesses looking to impact your digital marketing significantly.