You have probably watched a video on YouTube and envied some brands whose ads inevitably interrupt your session. These brands appear because they have the financial muscle to place ads in front of the 1.3 billion people who watch videos on YouTube every day. What if I told you that your few dollars are worth as much as their billions? Yes, you only need to understand the principle behind YouTube ads cost and billing.

YouTube is an equal opportunity advertising platform. Consequently, everyone gets a chance to advertise, regardless of brand popularity or budget. In fact, in many ways, you get to choose how much your dollar will be worth in a YouTube ad and how much it will bring to your business.

Wanna harness the power of YouTube ads? Let’s dive into the details while exploring the potential and opportunities in the most significant video streaming platform: Shall we?

But if you prefer to watch a video instead, click here:

How do YouTube Ads Cost Work?

YouTube is different from a Facebook or Google Ad because you only pay for a specific action on the ad; for example, when the viewer goes past the 30 seconds mark, you’ll be charged. However, if a viewer skips your ad or does not click on to the link provided, you won’t be charged. It means that their involvement determines whether you’ll pay for the ad(s)  or not.

Moreover, three principles guide YouTube advertising to guarantee the best returns for your audience.

  • The advertiser sets the budget– YouTube allows you to start with a budget as low as 10$. Once you test the market and can see progress or returns, you scale up your ad to your preferred ceiling. You will pay as low as 10-30 cents per view or action. The ultimate bill will depend on your target audience, quality of your video, and whether the advertising goals set were achieved.
  • Response from viewers- YouTube will not charge if viewers skip the ad or fail to click on the link provided in a banner ad. For example, you will only be billed if a viewer watches beyond 30 seconds, clicks on a banner, or engages based on the call-to-action you have provided.
  • Freedom to adjust your campaign- YouTube believes that you hold power to control your budget. You do not sign contracts with the platform such that adjustments will attract penalties. You are at liberty to adjust your budget and even pause a campaign midway without attracting penalties.

Now that you are in control of your advertising budget on YouTube, it is time to create ads.

You must have seen brands placed on different positions on YouTube. Some interrupt your watching session, others are banners, while others appear as ads on search results, among other options.

Hence, YouTube treats each appearance differently. A look at the types of ads will clear the picture even more.

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Types Of Youtube Ads plus Their Cost

YouTube offers numerous creative options for displaying ads to suit the needs of advertisers without interfering with the viewer experience. Diversity also helps you to choose the most appropriate option for your customers. It is also a way of enabling brands to remain visible regardless of their budgets.

Now, here are the types of ads on YouTube and how you can use them to your advantage.

1. Non-Skippable YouTube Video Ads

The ad appears before, during, or at the end of a video. The viewer has to watch the video to the end. Most unskippable video ads are 30 seconds long. The rule when using these ads is that you pay whenever the ad appears. The content creator or channel owner will also be paid once the ad runs to completion.

YouTube ads rates for unskippable videos will depend on the popularity of a channel. Furthermore, they are assigned by bidding. This type of ad requires a bigger budget because every appearance is billed. Remember, the videos must be so captivating that they can initiate a sale; otherwise, your brand will be a bother to viewers, causing the campaign to flop. The ad must also be placed in front of the target market to reduce the chance of failure.

2. TrueView Instream Skippable Video Ads

These ads allow the viewer to skip after 5 seconds. The ad will appear before, during, or after the main video. They can even appear as several ads can within one video. Furthermore, the advertisement may run more than 30 seconds. However, the average length is 3-4 minutes. You will only pay the content creator if a viewer does not skip before 30 seconds.

Unfortunately, five seconds are not even enough to introduce yourself. The trick here is to capture the attention of your viewers, enticing them not to skip. Further, set your campaign so well that the ad will only appear in front of the right clients to avoid being deemed both intrusive and irrelevant.

3. Display Ads

The ads appear on the right of featured videos in search results or when you are viewing a particular channel. The ads can also appear anywhere, except the homepage.

Interested buyers will thus click on the link provided. Therefore, the advertiser will only pay when the viewer clicks. The size of the display and its positioning will also determine the rates paid for such ads.

4. Overlay Ads

Overlay YouTube video ads usually appear on the bottom 20% of your video. This type of advertisement is exclusive to laptop and desktop computers. The ads also provide a skip option. However, because of the interruption they cause, a lot of viewers usually close the ads within seconds.

Furthermore, it sometimes results in false clicks, leaving the advertiser to pay, yet there are no comparable returns. Hence, the ad will only be helpful if it is placed in front of the right potential buyer(s).

5. Midroll Ads

A midroll ad is similar to what you see as TV commercials. YouTube has restricted these ads to videos beyond 15 minutes. A viewer must watch the ad before continuing with the content. Content creators insert natural ad breaks to provide a seamless viewing experience. These ads are also restricted to desktops, phones, and laptops.

Billing depends mostly on the number of views and clicks to the CTA provided. The ad must, therefore, beset with the highest level of precision so that it delivers the best ROI.

6. Sponsored Cards Ads

The video creator invites sponsors to advertise directly on the content. The card appears as a teaser and only for a few seconds. The card is, of course, specific to the content on display on the video. As the audience usually trust the narrator by becoming subscribers, they are likely to buy into the recommendation. This move increases the chances of getting a click or a sale from the ad.

Consequently, you must pay for such an ad whether the viewer clicks on it or not. Furthermore, an action like a click will also attract a charge.

Content creators also have a chance to run ads embedded onto their content without passing through YouTube. If you know an influencer with a large subscriber base and churns content that goes viral, approach them for your products to feature on their channel. Do not rush to popular YouTube channels unless their audience is part of your target market.

How To Measure Your ROI with YouTube Ads Cost

You have created an ad and uploaded the video on YouTube. So how do you ascertain whether your investment is paying? Luckily, the platform is open about its YouTube advertising cost and billing parameters. The following points discussion aims at helping you to adjust your strategy and budget so that you only spend where there are returns.

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The Best Metrics to Measure your YouTube video Advertising Cost Success

  • Views– it indicates the number of times people engaged or watched your video ad. TrueView video ads only count if the video is more than 11 seconds. If viewers skip after the 5th second, it indicates that the ad is irrelevant or was not captivating enough to hold the attention of a viewer or elicit action.
  • View Rate– it indicates the number of engagements or views (without skipping) as a fraction of the number of times the video ad was shown. For instance, if a video receives one click after ten appearances, it has a view rate of 10%. The click-rate will affect your conversion and also indicates relevance.
  • Average Cost Per View– how much are you paying for each appearance? YouTube bills only past 30 seconds for skippable video ads but will still bill if the video is less than 30 seconds.
  • Clicks– how many people clicked on the ad? The information will indicate the relevance of an advertisement. Consequently, It should be as high as possible.
  • Click through rate– it is the percentage of viewers who clicked compared to the number of times the video ad was shown. This percentage indicates that your ad is relevant and engaging enough to elicit the click action.
  • Engagement performance– how many people clicked on a sponsor card, ad, or allowed it to play to the end. A higher percentage of the number of times it was shown usually indicates positive reception.
  • Reach and frequency- how many unique viewers or devices clicked onto your ad? Cookies will give you these numbers. How many times did the cookies click on your ad, and how long did they stay on the video? Embrace the power of technology.
  • Viewership- what percentage of your video did the viewers engage? 25%, 50%, 75%, 100%? The percentages indicate the relevance of the content, and the level of engagement—moreover, viewership aids in improving on the next campaign video.

YouTube video ads metrics give you an idea of the value you are getting from the platform.

Endeavor to improve your score on each metric to continue reaping value.

Remember that, like all other advertisement platforms, the aim is to get the most returns from the least expenditure possible. The new decade is no joke when it comes to financing.

2020 Tips On YouTube Advertising

YouTube advertising is evolving each day. Furthermore, the effectiveness of an ad goes beyond what YouTube provides.

Here is a little icing on the cake to polish your YouTube video ad campaign.

  • Create an engaging video that holds the attention of your viewer and elicits a buying action to avoid skipping.
  • Research your audience so that your video ad appears in front of only the right viewers.
  • Work with seasoned advertising agents to finetune your campaign and get the best returns.
  • Remain updated on emerging advertising trends on YouTube and the digital platform so that your strategies are relevant.

It would be misleading to say that the cost of YouTube ads is 10 to 30 cents without itemizing the bill.

Moreover, a marketer should be worried about the billing principle for budgeting purposes and ROI.

It is now up to you to decide how much you want to get from the much you spend on YouTube advertising.