YouTube Ads: Everything You Need To Know 

YouTube Ads

Why advertise on YouTube?

At this year’s Google Marketing Live, Google put a strong emphasis on visual content and also announced a new feature, advertising on YouTube Shorts. Let’s take a look at some of the benefits of YouTube advertising.


  • Sales: 70% of people have bought a product after seeing it in a YouTube ad.
  • Brand Identity: YouTube videos allow you to create unique brand experiences and express your company’s personality.
  • Data: For example, take a look at those YouTube studio reports you won’t find in Google’s ad analytics.
  • Remarketing: You can run retargeting campaigns to users who have already watched your previous videos on YouTube or the Google Display Network.

How much do YouTube ads cost?

As with Google ad costs, it depends on your business and your goals, but here are some general guidelines on YouTube ad costs from LOCALiQ:

Most businesses pay a CPM (cost per thousand views) cost of between $4 and $10.

Most businesses allocate between $10 and $50 per day for a YouTube ad campaign.

On average, it costs around $2,000 to reach 100,000 views for your YouTube ad.

If you want more help with YouTube ad costs, here are six tips on how to make your YouTube ad more profitable.

Types of YouTube ads

When you think of a YouTube ad, you probably think of a 30-second ad that can be skipped during a streaming video. But you probably didn’t know that’s what it’s called! There are lots of different YouTube ad formats for different purposes, which of course are constantly changing. There are currently six ad formats on YouTube:

  • Interstitial ads, which can be skipped: they play before, during, or after other videos and can be skipped after five seconds.
  • Non-skippable in-stream ads: played before, during, or after other videos, but cannot be skipped and are 15 seconds or shorter.
  • Bumper ads: play before, during, or after other videos, cannot be skipped, and are six seconds or shorter.
  • Outstream ads: mobile-friendly ads that appear on Google’s video partner sites, but not on YouTube.
  • Masthead ads: appear on the YouTube homepage.
  • Overlay ads: these are not video ads, but text/image ads that appear over YouTube videos on the desktop.
  • In-feed ads: used to be called Video Discovery ads (not to be confused with Discovery campaigns), but technically not video ads at all. This is how you can get YouTube to recommend your video in YouTube search results and the “Watch More” section. This is what an infomercial looks like on mobile:

Here are some key considerations you should take into account when choosing the format of your YouTube ad:

  • Length: Generally, 30 seconds or the end of the video, whichever comes first, is considered a “watch.” Bumper ads are six seconds, skip-able ads are 15 seconds, and skip-able ads are 30 seconds.
  • Skip option: does the user have the option to skip the ad after 6 seconds or does he/she have to watch the whole movie? Bumper ads and outdoor spots cannot be skipped.
  • Network: when a video ad is shown in a YouTube video player, it is called an instream ad. When it appears on other websites (e.g. in a partner website’s ad bar), it is called out-stream advertising.
  • Sound: 95% of YouTube videos are watched with sound. This is in sharp contrast to Facebook, where the figure is 15%. 95% of videos are watched on YouTube. 95% of videos are watched on YouTube. The majority of YouTube ads are shown with sound. Outstream ads and Mastheads, however, run with the sound turned off by default.
YouTube Ads

YouTube advertising techniques

It is very important to understand the difference between a “view” and an “impression” for YouTube ads.

  • Views. When the ad is skippable, a “view” is counted at 30 seconds or at the end of the ad, whichever comes first. Think of a “view” the same way you would think of a “click” on a search ad: it’s a signal of engagement.
  • Impressions. If the ad cannot be skipped, there are no views, only impressions, as the user does not have the option to choose whether or not to engage. Regardless of the format, everyone who sees the ad counts as an impression, but only those who see the ad are engaged with your ad, and therefore only those who see it can be added to your YouTube remarketing lists.

Keep this in mind when building your YouTube ad strategy. You cannot remarket to people who have seen a bumper ad, as bumper ads are not skippable and therefore only good for views and not impressions. However, you can show bumper ads to people on your remarketing list.

And don’t forget to monitor these four underrated YouTube metrics:

  • Video played to
  • Earned shares
  • Views and conversions across devices
  • Audience engagement

How to create great YouTube ads with ABCDs

The most important component of the ad is not the targeting, format, or bidding, but the creative part of the ad.

YouTube has developed a framework called ABCD, which is a data-driven guide to creating effective video ads. Good YouTube ads have a few things in common:

  • Engage: They capture your attention in the first five seconds through tight framing, fast pacing, surprising elements, and real people on screen.
  • Branding: they showcase your product or brand in the first five seconds through text, images, and sound. For example, actors mentioning your brand are associated with positive recognition and consideration of the ad.
  • Connect: they make consumers feel something for your brand by integrating function and emotion, capturing the user’s emotions (especially through humor) and allowing the viewer to connect with the characters on screen.
  • Direct: Get customers to act by encouraging them with special offers, giving them a sense of urgency, and compelling them to watch with specific prompts like “Buy Now” or “Register.”

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