How Much Do YouTube Ads Cost? Price overview for beginners (2023)

Why should you advertise your business on YouTube?

Well, are you ready for some mind-blowing numbers?

youtube reportswith over 2 billion monthly registered users in 80 languages ​​in over 100 countries. youtube is thesecond most popular social networkworldwide, ranking second behind Facebook.

There are a staggering number of people around the world who access YouTube every day, so it's no surprise that a 2022 study byFound social media browserthat nearly 67% of surveyed marketers said they plan to increase their usage on YouTube.

Advertising your brand on YouTube can help you increase brand awareness, influence buyer decisions, drive sales and increase brand loyalty. But the one thing that might make you doubt YouTube advertising is the cost.

How do you pay to advertise on YouTube? What is "offer"? How much does it cost to advertise on YouTube? It's enough to overwhelm anyone.

As always, Foundr provides all the essential information you need to start advertising on YouTube.

Let's start with the basics.

table of contents

How does YouTube advertising work?

How much do YouTube ads cost?

The main factors that affect the cost of YouTube ads

Frequently asked questions about the cost of YouTube ads

How does YouTube advertising work?

The biggest advantage of YouTube is this: people use YouTube for information and entertainment. In other words, he has intent.

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When deciding which ads to show, YouTube considers information such as:

  • Google search history
  • Related videos the viewer watched
  • Google Ad Settings
  • Web history, age, location and more if someone is logged into your account

Using this information, YouTube identifies the user's intent and serves ads that align with the user's interests. To advertise your brand, you pay YouTube to show your ad to the right people at the right time.

How much do YouTube ads cost?

We get this question a lot. As with all advertising, it's very difficult to give an exact figure for how much it will cost.

Influencer Marketing Hub EstimatesYouTube ads can cost between $0.10 and $0.30 per view, with an average cost of $2,000 to reach 100,000 viewers. A view counts when a viewer watches 30 seconds of your video or interacts with it by clicking on it. If your video is less than 30 seconds, a view will be counted if a viewer watches the entire video.

The exact cost of running an ad campaign on YouTube is influenced by these factors:

  1. Guidance
  2. Offers
  3. ad formats

When advertising on YouTube, your main focus should not only be on how much YouTube ads cost, but also what you get for your spending. This means you'll need to constantly evaluate and re-evaluate your campaigns to ensure you're hitting your YouTube Ads and ROAS goals.

What is ROAS?

Return on Ad Spend (ROAS) is a metric that tells you the effectiveness and performance of your ad campaign. By calculating your ROAS, you can see which ad strategies are working well and apply those techniques to your other campaigns.

A simple formula to calculate your ROAS is:ROAS = Revenue / Cost

For example, if you spend $1,000 a week on YouTube ads and generate $1,500 a week in sales from your ads:US$ 1.500/US$ 1.000 = US$ 1,5 ROAS

A good ROAS depends on a few factors, butaccording to WebFXMost companies aim for a 4:1 ratio: $4 in revenue to $1 in advertising costs. However, the average ROAS is 2:1: $2 in revenue to $1 in advertising costs.

Keep learning: 3 ways to create YouTube ads without emptying your wallet

The main factors that affect the cost of YouTube ads

1. Orientation

YouTube's power lies in its ability to reach your ideal audience at exactly the right time and in the right place.

Video ads displayed on YouTube are also filtered across the web through Google Ads. By setting up your ads and campaigns with the right destinations, your ad is shown to someone who has been considered a potential customer based on their interests or activities.

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It has a wide range of targeting methods that you can use to reach specific audiences or niches based on where they are in the world, what they are interested in and their choice of content. You can also run multiple campaigns with different audiences to test engagement.

The cost of advertising on YouTube largely depends on the target audience. Some audiences are more expensive to market than others, so you need to choose wisely to avoid breaking your budget.

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2. Tender

The amount you'll spend on YouTube ads comes down to how much you're willing to bid for the ad placement. YouTube channels work through a bidding system. The cost of advertising depends on how many other people are bidding for the same ad placement. Before setting up your bidding options, make sure your targeting is in place as it will determine your costs.

Typically, you'll bid on cost-per-view (CPV) or cost-per-1,000 impressions (CPM). You'll only be charged if someone views your ad for more than 30 seconds or interacts with it, whichever comes first. If your ad is less than 30 seconds long and the viewer sees it in full, that also counts as a view.

With certain ad formats, you can choose to pay per click (PPC). With PPC, it doesn't matter how many people see your ad, you only pay for the people who actually click on it.

set a budget

Set a daily budget of how much you want to spend on advertising and wait to see if you need to increase or decrease the amount. Some small businesses budget between $5 and $10 a day, while others use a weekly budget of 50 times the average order value (AOV).

The best part about the deals is that you have the option to set a maximum amount you are willing to spend per day. This ensures that you don't suddenly wake up with an empty bank account because more people have interacted with your ad than you thought possible.

Configuration of your offers

When you're ready to set up your campaign, you'll be asked to bid a maximum cost-per-view. YouTube will show you a variety of offers that vary in cost depending on how much you've customized your targeting.

If you want to target a specific ad format, filter using the "Custom bids by format" option. YouTube will provide you with an estimated number of views per day based on your preferences. Make sure your forecasts align with your campaign goals and adjust them accordingly.

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Optimization of your campaigns

The key to optimizing your campaigns and getting the most out of YouTube ads is to focus on tuning and understanding your metrics.

The two metrics you should focus on are your click-through rates (CTR) and your view rate. These two metrics will tell you if your campaign is compelling and if your budget is justified.

If your ad campaigns aren't working, it could be because a competitor has outbid you for the best ad positions. Saving a penny in your budget can negatively affect your ROI.

The only solutions are to bid more than your competitor (if your budget allows) or to reassess the quality of your campaign.

3. Ad Formats

YouTube offers a variety of ad formats with different prices and reach:

  • Skippable in-stream ads:the most common ad format, skippable ads are shown before, during or after a video, and the viewer can choose to skip them after 5 seconds
  • Non-skippable in-stream ads:these ads usually last for 15-20 seconds and do not allow the viewer to ignore them
  • Video Discovery Ads:these ads appear as a suggestion in the search results in the right sidebar or on the YouTube homepage
  • Show Ads:these ads are embedded on the YouTube page, usually above the suggested videos column
  • Overlay Ads:a text or image ad that covers the bottom 20% of the video.
  • Bumper Ads:non-skippable videos of up to 6 seconds
  • Consecutive ads:also known as ad sets is when there are two consecutive ads before the start of the content
  • Outstream Ads:Out-stream ads are mobile only, so they will only appear on Google's video partners and not on YouTube.
  • Header Ads:a digital billboard placed on the YouTube homepage for 24 hours, available only by reservation through a Google sales representative

Each of these ad formats offers a different audience reach and a different user experience. It's your job to decide which ad format will best meet your campaign goals. For example, if you want to promote a big 24-hour flash sale, can you budget for a banner ad? Or, if you're just looking to increase brand awareness, would a skippable ad be more effective than forcing viewers to watch a 20-second video?

Ad formats are a delicate balancing act between budget and marketing. Test the waters until you find the sweet spot.

Keep learning:Secrets to Running YouTube Ads Like a Pro Over $30 Million

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Frequently asked questions about the cost of YouTube ads

Who should I target with YouTube ads?

There is no plan to get rich from YouTube ads. That's why we suggest targeting your current and potential customers who spend more and who will continue to buy more from you over time.

Will YouTube Ads work for my small business or niche market?

There are over 2 billion users on YouTube every month. That's pretty much everyone who has access to the Internet. Which means this could work for anything. YouTube is also the second most used search engine after Google itself.

Will my YouTube ads work on a small budget?

We all have to start somewhere. Obviously, you need to be able to invest in your business, but you can and should start small before going crazy, regardless of your financial situation.

What should my YouTube advertising budget be?

We suggest beginners start with $5-$20 a day to test the waters. Higher levels will want 30 times its cost per acquisition per day. Eventually, you'll want to scale to a healthy $1,000 a day spending on YouTube ads.

Do I need professional equipment to run a YouTube ad?

All you need is your mobile phone to get started. YouTube is an intent-based platform. like youtube. When you create an ad that directly addresses the problem your prospect is facing or a pressing question that keeps them up at night, and then offer a solution to that problem, there's a greater chance of conversion. No fancy cameras are needed.

Ready to start implementing YouTube Ads?

Budgeting and paying for a new form of advertising can seem daunting at first, but the beauty of YouTube is that you have the power to choose how much you want to spend on it.

Evaluating which ad format works best for you, customizing your targeting, and optimizing your campaign with bidding will give you an idea of ​​how much advertising on YouTube will cost. And with over 2 billion users logging in monthly, it seems like YouTube is the perfect playground for testing ads and getting your brand out there.

If you really want to rock YouTube, check out ourfree youtube ads course. It's free and full of expert information.

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