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How Much Does YouTube Advertising Cost?

Posted by Gary Henderson on Aug 16, 2020 4:53:43 PM

With over 2 billion logged-in monthly users, YouTube is one of the most popular search engines, processing more than 3 billion searches a month. While Google is the queen of the internet, YoutTube is bigger than Bing, Yahoo, Ask, and AOL combined. 

An increasing number of people turn to YouTube when they have to find practical information about products and services. As the world’s largest video hosting platform, and the second most visited website in the world, YouTube largely influences consumer behavior and shape the way people buy things. 

People watch over a billion hours of videos on YouTube every single day. Isn’t it fascinating? 

YouTube is a truly powerful platform where people can share their content with the entire online world. From a business perspective, YouTube must be an important part of your paid advertising strategy. 

Wondering how much YouTube advertising cost? Stay tuned if you want to learn more YouTube as a powerful advertising channel and how much it cost you to advertise on the platform. 

Check out these Youtube secrets: The Ultimate Guide To Growing Your Following & Making Money As A Video Influencer

Why Choose YouTube To Advertise Your Business?

Before we discuss how much does Youtube advertising cost, let’s take a quick look at the reasons you should choose YouTube. 

Millions of users watch over one billion hours of content every day.

With such a large number of users spending a massive amount of time on a single platform, YouTube is one of the ideal channels for businesses to advertise their products/services.

From proven influence on purchasing behavior, the following 3 features make YouTube a great video advertising platform: 

1. Enormous Reach: YouTube Has 2 Billion Monthly Users

YouTube is a social media network as well as a search engine that reaches an incredibly broad range of internet users. You can advertise your business to people seeking information and to those seeking social interaction. Most other advertising platforms don’t offer such diversity and reach.

Therefore, YouTube is the right place to communicate your business message to the widest possible range of prospects. 

2. Influence On Purchasing Behavior 

Studies have shown that YouTube has a major impact on purchasing behavior. According to the YouTube insight report, 72% of auto-vehicle purchasers, 62% of smartphone purchasers, and 66% of beauty product purchasers revealed that Youtube influenced their purchases. 

The best thing about the platform is that it helps consumers visualize how a product could fit into their lifestyle. Your content can directly influence the purchasing decisions of your customers.  

3. Opportunity To Share Your Story To The Right Audience At The Right Time

#R3MAT Method - the right message to the right person at the right time

To produce the maximum results for your brand, all you have to do is show the right message to the right person and at the right time.

While you have to create super appealing content for your target audience, the targeting features and analytics help you share your story with your audience and at the right time. 

How Much Does It Cost To Advertise On YouTube?

Since Google owns YouTube, businesses advertise on the largest video sharing channel using the Google Adwords networks. Like other Google AdWords campaigns, the cost of your YouTube ad involves bidding for ad placement.

So, it’s hard to come up with an exact number when it comes to YouTube advertising costs.

On average, YouTube ads cost anywhere between $0.03-$0.30 USD per view.

Here is a list of factors that can affect the costs of Youtube advertising: 

  • The quality of your content
  • The timing of your ads
  • Ad formatting options
  • Ad messaging options
  • Biding 
  • Targeting

The Quality Of Your Content 

The quality of your video ads plays a key role in determining the overall cost. If your content isn’t appealing, viewers will rush to press the ‘skip’ button and your money will go down the drain.

The key is to create memorable ads to stand out amongst your competitors. If your content is strong enough to drive your audience to re-watch and share, your Youtube advertising cost will be nothing as compared to what you get in return. 

Google rates video ads based on how relevant it is to the audience an advertiser is targeting.  It determines this by evaluating how many users actually engage with an ad. 

The Timing Of Your Ads 

No matter your industry or business goals, make sure to show content to people in each stage of their buyer’s journey. Tracking can help you figure out when is the right time to get your message across. 

Ad Format Options 

There are four main YouTube ad formats. Each format has different mechanics, lengths, and times during which it appears in users’ video watching experience.

Before you start creating ads, make sure to consider format options. Some are more expensive than others. Besides your audience will respond differently to different format options, so make sure you choose the one that your audience likes the most. 

The Messaging Of Your Ad 

Your Youtube advertising cost will be higher if your messaging is off. It’s no surprise that the success of your digital marketing campaigns, especially YouTube advertising, largely depends on messaging.

It’s probably a good idea to test various types of messaging to see what works for you. 


YouTube’s ad placements work through a bidding system, like most of Google’s adoptions. How much your competitors are bidding for the same ad placement will impact the cost.

For video ads, you’ll be bidding on a cost-per-thousand (CPM) or a cost-per-view basis. You’re charged every time someone interacts with or watch the ad for longer than 30 seconds. 


YouTube ad campaign should be built in a way that engages those who care about your brand or products. Since some audiences are more expensive to advertise to, targeting can impact your cost. 

Google enables advertisers to use plenty of targeting options to help them reach the right audience. For example, you can determine which YouTube channel your videos should appear on. You can even hand-pick specific videos to get maximum return. 

When you create a campaign, you can search for and add channels in the “Placements”. It’s recommended to select high-performance channels for your campaign. Let’s talk more about targeting options in the next section. 

How Does YouTube Advertising Work?

how much does it cost to advertise on youtube

Google keeps improving the way businesses connect with their customers, especially across mobile devices where more than 50% of YouTube views take place.

One of the biggest developments was enabling advertisers to target viewers based on their Google search history. 

It’s possible to target people based on what they have recently searched for. If your video content is close to what viewers have been searching for, viewers are likely to watch the entire ad or click on it to visit your website. 

You pay only when a user chooses to watch your ad.

Most companies start with at least $10 per day to run local campaigns.

You can adjust your daily budget based on the range of potential customers you want to reach. 

Here Are The Targeting Options For YouTube Ads 

Some of the important ad targeting methods you can choose on YouTube include:


Billions of people consume content on YouTube. Do you want to target every single user? Of course not.

You need to show ads to people who’re likely to do business with you. This is where you need to shortlist users based on demographics: age, gender, income, etc. 


Do you know about your audience’s habits and interests?

If yes, you may choose which audience you want to show your content to based on their interests or preferences. 

Life Events 

People sometimes go through major changes in life and they start looking for things they weren’t interested in before.

For example, marriage can totally change the priorities and needs of a person. You can show ads for your trip advisory service only to freshly married people. 

In-Market Audiences 

Google can tell when a user is looking for products similar to yours and ready to buy them. Target in-market audiences to find people most likely to buy from you. 

Video Remarketing 

Video remarketing is a method of reaching customers who’ve already in contact with your business. You can choose to show ads to those who've already watched your ads or videos. 


As mentioned earlier, it’s possible to handpick Youtube channels or videos that you want to advertise on. For instance, if you sell gaming computer accessories, you can advertise on e-sports channels. 


Choose related search terms to a YouTube channel or video that your audience might be interested in. The use of negative keywords will help you show ads only on related videos.

Keywords are less expensive to target on YouTube as compared to Google ads.  

Here Is A List Of The Different Types Of YouTube ads 

You can use a variety of video types to create an engaging advertising campaign for your business. The following are 6 types of YouTube ads: 

1. Bumper Ads

How to use YouTube Bumper ads

Bumpers are the shortest type of YouTube video ad. No longer than six seconds, bumper ads play before the user's chosen video. While it’s hard to tell a story in six seconds, Bumper YouTube ads are used to reinforce brand awareness. 

The majority of advertisers don’t use bumper ads, mainly due to the way YouTube advertising works. They want to run longer videos as they have to pay for every view - long ads are more likely to generate leads and sales. 

However, when it comes to building business awareness and reach or reinforcing a video marketing campaign, bumper ads can be a great choice.  So far as billing is concerned, bumper ads use Target CPM bidding, which means you pay based on impression

2. Non-skippable In-Stream Ads

As the name suggests, non-skippable in-stream ads can’t be skipped and they run in the beginning or during the stream. In other words, viewers have to watch the entire ad.

The duration of the ad can be 15 seconds long or shorter. Therefore, it’s critical to send a clear and concise message. 

how to make money on youtube

Most of your YouTube audience don't like the idea of ads interrupting their video watching experience. Nonetheless, you can grab the attention and make those 15 seconds entertaining for viewers with your content. 

While users can’t turn the ad off, enforcing people to watch your entire video will put your business on the radar. Again, non-skippable in-stream ads are an incredible way of driving brand awareness

3. Skippable In-Stream Ads (previously known as TrueView ads)

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These ads play before, during, or after other videos. Most importantly, a viewer has the freedom to skip the ad after 5 seconds. We see these ads popping up at the beginning of almost every video. 

Advertisers have the option to control the billing time. You can choose to play these ads at the beginning, middle, or end of a video. The length of the ad could be between 12 seconds and 3 minutes. 

You’ll be billed only when someone watches the ad for at least 30 seconds or interacts with it. No matter the length, your ad needs to make the viewer take action in a few seconds. Skippable ads are idea when the campaign goals include: 

  • Leads
  • Sales
  • Brand awareness
  • Website traffic

4. Video discovery Ads

Video discovery ads don’t appear before or during a video. Instead, they appear as a suggestion in the search results in the right-hand sidebar. YouTube mobile homepage also shows this type of ad.

You’ll be billed every time some play the video. 

how much does an influencer charge?

Video discovery ads are a good fit if you want to show how your products work.

For example, if you sell ovens for bread and pastry production, your ad will appear when users search to find a video explaining how to make the bread. 

Check out these Youtube secrets: The Ultimate Guide To Growing Your Following & Making Money As A Video Influencer

5. Outstream Ads

Outstream ads don’t appear on YouTube pages, rather they show up on apps and websites that have a partnership with Google.

One distinguishing feature is that these ads play automatically with the sound off - a user can choose to unmute it. You’re billed when the user watched the ad for 2 seconds or more.

Besides, only interested users will watch your ad. 

How to make money on YouTube

6. Masthead Ads

If you want to boost your brand’s awareness and reach a massive audience in a short period of time, you should consider using masthead ads.

These ads are expensive and you have to make a reservation with a Google sales representative in order to use them. 

how much is YouTube advertising?

Masthead ads show up at the top of the YouTube feed. Like Outstream ads, masthead ads autoplay with the sound off.

This type of ads increases your YouTube advertising cost since they work on a cost-per-day or cost-per-thousand-impressions basis. Google representatives give you a cost estimate. 

What Should You Do Before Getting Started?

Before you build a video ad campaign or select the ad type, make sure to clearly identify your goals and strategy. Having a well-thought-out video ad strategy will help you make the right choices throughout the process. 

Develop your message in a way that instantly grabs attention and delivers an informative experience. Messaging must be spot on, especially when you only have a few seconds to make an impact. Here are some quick tips: 

  • Define your objectives 
  • Make sure to understand and use targeting options 
  • Create compelling content
  • Add interactive elements to your ads 
  • Don’t forget to use YouTube Insight

Bottom Line 

YouTube advertising is a highly effective way to get your message out in front of the right people.

Since the YouTube advertising cost depends on the way you build your campaign, make sure to build well-targeted and relevant ads to make your campaign more cost-efficient and ROI-focused.