You’ve spent months perfecting the script, storyboarding, finding the right talent, shooting, and editing. The end result? A blockbuster video that’s sure to rake in hundreds—maybe thousands—of views.
With all that time invested, you can’t stop at just embedding the video on the homepage of your website or sharing it on social media and hoping someone watches. Running YouTube ads on your videos is one way to make sure more of your target audience finds the content you’ve produced. And with new formats and tracking capabilities, you can also use this information to report on its ROI.
In this post, we’ll guide you through YouTube ads—how they work, how you get paid, and best practices for growing revenue from your YouTube channel through advertising. By the end of this guide, you’ll be ready to launch advertisements across your YouTube channel as part of your overall YouTube marketing strategy. Let’s get started.
What’s New With YouTube Advertising
Advertising on YouTube is very different from running a PPC or paid social media campaign. There are specific creative constraints and a ton of options for this platform, and you need basic knowledge before you even scope out your next video project to make the most of the paid possibilities.
In recent years, Google has rolled out a series of changes that makes YouTube advertising an extremely worthwhile investment. Let’s take a look.
More Rigorous Brand Safety Efforts
In the past, the platform has made major efforts to protect viewers and advertisers from harmful content, and those efforts have persisted as of November 2022. The latest updates include “clearer language” and “specific guidelines” around ads not being placed on adult content, violence, harmful or dangerous acts, sensitive events, videos with inappropriate language, and drug-related content.
Targeting Based on Users’ Search History
A few years ago, Google announced it would allow advertisers to reach more viewers on YouTube — especially across mobile devices, where 50% of YouTube views take place. Among the changes it rolled out, possibly the biggest announcement was that advertisers would be able to target viewers based on their Google search history, in addition to their viewing behaviors YouTube was already targeting.
Marketers can now target ads at people who recently searched for a certain product or service. If the content of a video ad is closely related to a search the viewer has been researching, they might be more likely to watch the entire ad or click through the ad to the website.
Audio has grown lately — you needn’t look further than podcasts and the new social media app Clubhouse. To keep up with the changes, Google is now allowing YouTube advertisers to create audio-only ads. While we’d recommend starting with a video ad first, you can later consider using audio once you’ve perfected your brand voice and learned what your audience likes to engage with the most.
Upgraded Data Attribution Models
Google has also upgraded YouTube’s data attribution model so you can better measure how users engage with your ads. You can also determine cost-per-conversion and see your YouTube ads’ performance alongside your Search and Shopping ads’ attribution reports.
YouTube Advertising Cost
The cost of YouTube ads is based on views. Each view can cost between $0.10 and $0.30, depending on your industry and target keywords. You can spend as little or as much as you want. If you set a daily budget, Google will only charge you up until that amount, making YouTube ads a safe investment.
Keywords are relatively less expensive to target on YouTube than in traditional Google Search, where the average cost per click is estimated to be between $1-2.
While great content is bound to be found, it’s important to be proactive about gaining the attention of prospects and educating those who are unfamiliar with your brand. YouTube ads allow you to do just that. It’s a cost-effective way to target your audience with a more engaging form of content — video or audio.
The Types of YouTube Video Ads
There are several key types of video ads in which you can invest on YouTube. Google outlines the basic formats here. Below, we go into more detail.
1. In-Feed Video Ads
In-feed video ads show up on the YouTube homepage, search results pages, and as related videos on YouTube video watch pages.
This ad appeared after performing a YouTube search:
Once a user clicks on the ad, the destination video page features a spot on the right-hand column where a companion banner display ad will appear.
2. Skippable In-Stream Ads
Skippable in-stream ads are the standard video ad type on YouTube. Advertisers only pay for these ads when a user watches the ad for at least 30 seconds, until the end of the video, or if the viewer takes an action, such as clicking on a call-to-action. YouTube requires that skippable ads be between 12 seconds and 6 minutes in length.
You’ll see these ads play before someone watches the video they’ve selected on YouTube. Viewers sometimes have the option to skip the ad after watching it for five seconds. You can also have them play anywhere in the Google Display Network (GDN) — or sites that purchased Google video ad space.
In-stream ads also let marketers customize video ads with different CTAs and overlay text, as highlighted in the skippable in-stream ad example below from Grammarly.
Notice that there’s another CTA from Grammarly on top of the right-hand suggested video columns.
What Skippable In-Stream Ad Videos Can Include
Skippable ad campaigns can include videos with people, dialogue, and music that was retrieved with permission — or is considered royalty-free. However, it’s best not to run a standard promotional commercial. Because these videos can be skipped, you need to give your audience a reason to keep watching, and product plugs historically don’t get the views you might expect.
Instead, tell a story with the time you have in this video. People love seeing case studies of those who faced a struggle that they can empathize with. It’s a source of entertainment that makes your brand memorable and less tempting to skip.
With skippable in-stream ads, advertisers can gain a ton of information about the performance of their ads for optimization and testing purposes.
Using their Google Ads account, YouTube account managers can collect data on an ad’s completed views, partial views, channel subscriptions, clickthrough rates on CTAs, views sourced from a user sharing the content, and views on the brand’s other content that can be attributed to a person initially viewing a video ad.
These actions help advertisers better understand the full value of their video ad spend and where to allocate budget to increase results.
3. Non-Skippable In-Stream Ads
Non-skippable ads can play before, mid-roll, or after the main video. They can be 15 to 20 seconds in duration. Here’s an example:
Non-skippable mid-roll video ads appear midway through a YouTube video that’s 10 minutes or longer. On the desktop, viewers will see a five-second countdown, and on the app, they’ll see yellow markers where the ads are placed.
What Non-Skippable Videos Can Include
Non-skippable ads give you just as much freedom as skippable ads in their allotted content. You can include people, dialogue, audio, and more elements that you find best represent your brand in 15 to 20 seconds.
Because non-skippable ads can’t be skipped, these videos are best created with a call-to-action (CTA) so you can optimize the attention you do have from the viewer. In other words, encourage viewers to click on your ad and receive something in return. Perhaps you’ve released a new product or are promoting a major event this season — use non-skippable ads to get those clicks.
4. Bumper Ads
Bumper ads are the shortest type of YouTube video ad available to you. At just six seconds per bumper, these ad spots play before a viewer’s chosen video. It’s also non-skippable.
Bumper video ads obviously can’t tell a good-enough story in just six seconds, but they make terrific complements to larger video campaigns on a new product launch or event. Just be sure to use the six seconds wisely, and include only the components of your brand you want your audience to remember.
5. Overlay Ads
Overlay ads are a type of banner ad that hovers at the bottom of the video, as shown below. This type of ad is ideal to supplement your other in-stream video campaigns. A banner ad helps to avoid advertising your product in an intrusive way while still reaching your target audience.
Now that you’re familiar with the types of ads you can run within the YouTube platform, let’s cover the nuts and bolts of launching a YouTube ad campaign.
How to Advertise on YouTube: Launch an Ad Campaign
Once you’ve created a marketing video you want to advertise on YouTube, it’s time to create your video ad campaign.
If you haven’t made a video yet, here’s how to get started with Animoto or Wistia, along with a few great examples of YouTube ads.
Step 1: Upload your video to YouTube.
Step 2: Login to or Setup your Google Ads account.
Now, you’re ready to set up your advertising campaign. First, go to your Google Ads account. If you haven’t made one already, you can sign up with a Google Workspace email (either personal or business).
When you first sign up, the screen might prompt you to start creating a campaign right away. Look for an option that says “Are you a professional marketer?” or “Set up without creating a campaign” and click. That way, you can get to your brand new Google Ads dashboard.
Step 3: Create a new campaign.
When you access the dashboard, click the button that says “+ New Campaign”.
Step 4: Choose the goal and campaign type.
You’ll be prompted to select a goal, then a campaign type. Choose whatever goal you’d prefer. Under campaign type, select “Video.”
Step 5: Choose the campaign subtype and strategy.
You’ll be prompted to select a campaign subtype: Video reach campaign, outstream, or ad sequence. Choose “Video reach campaign.”
In the same screen, select your method for reaching your goal: Either “Efficient reach (Bumper, Skippable in-stream, or a mix)” or “Non-skippable in-stream.”
Step 6: Enter a campaign name.
Next, enter a name for your campaign. Leave the bid strategy as is.
Step 7: Enter a budget.
Set your budget per day or for the entire campaign. Setting a daily budget can help you keep daily costs low while ensuring you don’t run out of money too quickly. Setting a campaign total budget can help you establish a fixed investment amount that Google won’t go over.
After that, choose a start and end date.
Step 8: Choose networks, locations, and languages.
Decide where you want your ad to appear.
- YouTube search results: Your video ad will appear in results for searches and will appear on the YouTube homepage, channel pages, and video pages.
- YouTube videos: This runs skippable in-stream ads that appear pre- or mid-roll during a YouTube video.
- Video partners on the Display Network: With this option, you can choose for your video ad to appear before or around videos across the Google Display Network.
You should create separate campaigns for YouTube search results and YouTube videos, as this will help you to better track performance metrics. These ads are served to people performing very different activities and require a different amount of commitment from the viewer, so it’s best to monitor performance separately.
Next, define the location of users whom you want the ad to be shown to. You can also exclude certain locations.
Last, choose the languages that your target audience speaks.
Step 9: Set up content exclusions and excluded types and labels.
These options are for those who wouldn’t like to advertise their brands on videos that have profanity or sexual content.
Choose between “Expanded inventory” (excludes videos that have excessive profanity and graphic content), “Standard inventory” (excludes videos with strong profanity and graphic content), and “Limited inventory” (excludes videos with moderate profanity and graphic content).
Under “Excluded types and labels,” you can also prevent your ads from showing up in embedded YouTube videos and live-streaming videos. In addition, you can exclude content based on their content labels (G, PG, MA, and so on).
Step 10: Choose related videos.
You have the option of adding related videos to appear below your ad. You can add up to five.
Step 11: Configure advanced settings.
In the advanced options, you can specify the operating system, device, and carrier for more granular targeting. This is especially useful for mobile app ads, and there’s an option to increase or decrease your bid based on if the video ad is shown to someone on a mobile device.
You can set beginning and ending dates for your campaign, create a custom schedule for when your video ad should be shown, and limit the daily impressions and views for users. This all helps you to get the most return for your ad spend.
Step 12: Set up demographics and audience segments.
Next, define the audience you would like the video to be shown to — options include gender, age, parental status, and household income. You can also target individuals by their interests, such as beauty mavens, cooking enthusiasts, horror movie fans, etc.
Try running multiple campaigns to target different groups of users to discover who is most engaged, rather than including everyone you want to target in one campaign.
Step 13: Select target keywords, topics, and placements.
You can also target individuals by keywords, topics, or placements where you would like your video ad to appear. Keyword targeting with in-display ads can be a powerful tool for finding individuals who are looking for a visual answer to a question. Be sure to do your research, and try testing out different groups of keywords to see which leads to more views, clicks, or conversions.
Additionally, you can use video ads to remarket to people who have been in contact with your brand already. This can help you to re-engage those who are already familiar with your brand.
Step 14: Start bidding.
Next, determine the max price you will pay for each view, which you can adjust to increase the number of projected views your video may receive.
Step 15: Create the video ad assets.
Last, insert the YouTube link for the video you would like to run the ad for. You will then choose whether you want this to run as an in-stream ad or an in-display ad.
For in-display, you’ll need to include a title and short description, which is entered on two separate lines. Note: Titles are limited to 25 characters, and the description lines are limited to 35 characters each.
In-stream ads provide you with the option to overlap a display URL on top of the video. You should use a vanity URL that directs to another final URL to make it more memorable. You can include advanced URL tracking options. In addition, a companion banner made from images from your video will appear on the right side of the video ad.
Click Done, then click Create Campaign.
Finished! Google will then prompt you to put in your credit card information (if they don’t have it already) so they can begin running your ad.
Step 16: Link your Google Ads account.
You should link your Google Ads account to the YouTube channel where the video is hosted if you haven’t already. On the top navigation bar, click “Tools & Settings.” Under “Set Up,” go to “Linked accounts.”
Choose YouTube from the screen, and you’ll be prompted to add a channel.
10 Tips for Optimizing Your Video Ads
Launching a video ad campaign is a great step, but there are some things you should set up prior to starting to pay for views. That way, you make the most of your budget and see the highest return on investment.
1. Define your metrics and goals.
When analyzing the results, there are four main categories of metrics you can track for each video.
Views and Impressions
Under the “views” category, you can better understand what percentage of the ad people viewed and understand how the ad drove earned views. You can also see how it increased views on your brand’s other videos.
This category can be used to track engagement metrics split up based on age, gender, household income, and parental status.
The view rate could signal if the creative and message are interesting or entertaining enough for people to watch the ad. By increasing your view-through rate (VTR), you will lower your cost per view.
Conversions will help you better understand if your ad is driving leads and returning a high ROI for your brand.
Depending on the goals for the brand, you should determine a few goals based on these metrics and formalize a plan for optimizing creative and trying different targeting criteria to improve results. Your goals should also determine the type of content you will feature in the ad — some metrics are better for branding goals and others will drive leads and conversions.
2. Track low performing placements.
If you’re running in-display ads that will appear across the Google Display Network, you can review where the ad has appeared in by navigating to Video Targeting > Placements > Where ads were shown > Display network from your Google Ads Campaigns dashboard. Review this list to see if any particular sites are contributing to poor performance for your desired metrics. Exclude these sites from your ad campaign moving forward to increase your average CPV.
3. Use a custom thumbnail image.
Design or use a high-quality still image from the video to entice a viewer to click on your video. Remember, this image needs to be legible by users on different devices, including mobile. If your image contains a person, make sure they’re looking into the camera. If you are featuring a product, make sure the background isn’t distracting.
4. Drive people to buy with cards.
A YouTube card is teased with a small “i” symbol, which the viewer can click to expand. You can time this appearance so only users who engaged with the video and content will see the notification.
With cards, you can feature a product related to or featured in the video to drive product purchases. You can also use cards to drive fundraising donations, traffic to a URL, or traffic to other videos as shown in the example below from our YouTube channel. Each format will allow you to customize the card with text, images, and other options.
5. Create calls-to-action.
When promoting a video on YouTube, you can include call-to-action overlays that link to a URL. You could link to a landing page, product page, information page, career page … whatever you’d like. You could also send people to a favorable report or interview featuring the brand.
6. Create a YouTube end slate.
Create an end screen to drive subscribers to your channel, promote your social networks, or increase interest in your brand. If someone has watched a video until the end, it’s a good sign they enjoy your content and might be interested in subscribing to your channel for future updates.
This end slate by HubSpot increases subscribers and social media fans while also highlighting other interesting topics its host has featured. Once you build the image, you will be able to annotate the end screen in YouTube’s video editor.
7. Use negative remarketing.
If you are running a campaign for a longer period of time and want to only attract new users to a brand, consider creating a list of people who your ad will not be shown to.
You can stretch your campaign budget and target only unique users by excluding those who have previously viewed the specific video, who have visited your YouTube channel, or who have shared, liked, or commented on any of your videos.
8. Use close captioning to cater to viewers’ needs and wants.
This tip applies to all YouTube videos — but it’s a general best practice that’s not followed by many brands. Include a quality video transcription you’ve generated and approved. Only user-uploaded transcriptions are indexed by Google because YouTube’s automatic captioning can be less than reliable. Depending on your target audience, you may also want to include transcriptions in various other languages. You can also offer users the option to download or visit a site page with the full transcription in your video description.
9. Qualify viewers.
Sometimes, your ad will be seen by people who have no interest in your product. Encourage them to skip the ad if the content isn’t relevant so you don’t have to pay for the view and they don’t waste their time watching irrelevant advertising.
10. Consider making your ad longer.
When it comes to skippable in-stream ads, if the ad is under 30 seconds, you’ll pay only if a viewer watches until the end. If the ad is longer than 30 seconds, you pay if the viewer watches it for at least 30 seconds. In both cases, you pay if the viewer interacts with your ad before it’s over. Consider this when you are coming up with ideas for content for the ad. You may want to put messaging at a certain point so uninterested viewers can skip the ad, or you might provide special offers towards the end of the video.
The Future of Video is Bright
Video content is a must-have part of your content strategy. This is even more relevant now that YouTube lets marketers target users based on their search histories. YouTube advertising is more targeted than ever, and it’s less competitive real estate than the world of Google Search. Try your hand at creating a YouTube ad campaign of your own and see the results for yourself.
Editor’s note: This post was originally published in February 2017 and has been updated for comprehensiveness.