7 types of YouTube ads and YouTube advertising costs.

It can always be a challenge trying to decide where to spend your marketing budget, whether it is for your own business or that of a client. You can pay for ads on a long list of digital platforms, such as the Google Display Network, YouTube, Facebook, Snapchat, or other social media platforms. There are also more traditional advertising options, such as radio, TV, and billboards. 

Even with all of these options, YouTube earned $19.77 billion in advertising revenue in 2020 alone. This was an increase from $15.15 billion the year before. With such large revenue, it is clear that businesses take YouTube advertising seriously.

As YouTube has more than 2 billion active users every month, it makes sense to advertise there. It is the second-most popular website globally, with people watching more than a billion hours of video content daily. Companies that do not advertise on YouTube are missing a large segment of their audience. But how much does YouTube advertising cost?   

What are YouTube advertisements, and why are they different from others?

YouTube advertisements are exactly what they sound like, the opportunity to advertise on the platform. YouTube ads come in the form of videos, like the content on the platform, and there are various formats available. 

As you choose which platforms to advertise on, you will want to consider the YouTube advertising cost and how that compares to ads on Facebook or Google.

The following image shows a comparison of Facebook ads and YouTube ads based on similar amounts spent:

Facebook vs YouTube ads graphic

Those results show that YouTube tends to result in a lower cost per free trial, cost per click, and cost per view compared to Facebook.

If you compare YouTube to Google Ads, you will also notice that the video platform typically has a lower cost per click or view. The difference can be just cents for a YouTube view versus $50 or more for a click on Google.

Benefits of advertising on YouTube.

Overall, the YouTube advertising cost comes with many benefits, some of which give it a significant advantage over other options, such as Google or Facebook. The following are just some of these benefits: 

  •   YouTube advertising is more cost-effective.
  •   You can target your audience to an extreme degree.
  •   Videos deliver a greater feeling of being connected, encouraging future brand engagement.
  •   People are more likely to comment on videos.
  •   Video has the best conversion rate.
  •   YouTube has built-in analytics (so do Facebook and Google).
  •   You can reach a wider audience.
  •   You can easily adjust your YouTube ads, including payment method and budget.

How much does YouTube advertising cost?

There is no exact figure for the YouTube advertising cost, as the pricing depends on numerous factors.

Your bid and bidding selection have a significant impact, as these directly affect your budget and how much you are willing to pay. When setting your budget, remember that the average daily budget a business sets will be at least $10. 

The type of YouTube ad you choose will also have an impact on its cost, as some types are more expensive than others.

Even your targeting options can affect the cost of the ad. This affects the YouTube advertising cost by increasing the price if you are targeting a more competitive audience. 

It is most common to pay for YouTube ads in the form of cost-per-view. This payment method means that you pay if someone interacts with your ad or views it. YouTube counts it as a view if someone watches at least 30 seconds of the ad, or in the case of ads that are shorter than this, the entire ad. 

Although the cost can vary, the average cost per action or view for a YouTube ad is $0.10 to $0.30.

7 different types and examples of YouTube advertisements.

YouTube outlines the various types of ads that you can buy in two different locations. To make life easier, we have combined all of the relevant information in one convenient spot for you so that you can evaluate your YouTube advertising costs and options with ease. 

As you look at them, keep in mind that the term TrueView overlaps with several of these types. TrueView refers to the ads where advertisers only pay if the viewer watches 30 seconds of a video that is longer than 30 seconds or watches the entire video if it is shorter.

  1. Discovery Ads

Chart explaining YouTube video assetsTrueView Discovery Ads graphic

Discovery ads appear as results when someone searches for a video on YouTube. They will appear as text in three lines plus a thumbnail.

This ad type requires viewers to watch the entire thing or at least 30 seconds of the video. Otherwise, you will not pay. As TrueView ads, they have the major advantage of costing less for advertisers. At the same time, viewers tend to prefer TrueView ads because they have an element of control over them.

  1. Display Ads

Display Ads graphic

screenshot of youtube in serps

Display ads only appear on computers, not on mobile. They feature text or images and appear to the right of the video, sitting above suggested videos.

  1. Overlay Ads

Overlay Ads Chart

YouTube Ad example

Overlay ads are the videos that appear on the bottom of the video, taking up about 20% of them. They can feature images or text.

  1. Non-Skippable Video Ads

non-skippable video ads

With a non-skippable ad, users have to watch the entire ad, which will be either 15 or 20 seconds.

The biggest advantage of a non-skippable ad is that when it appears, viewers have to watch the entire thing. You will pay for each impression and have a time limit of 15 seconds. The biggest disadvantage is the potential for viewers to get bored or annoyed with your ad. That could hurt your brand reputation. As such, you need to ensure the ad is engaging and interesting. Even then, you should think carefully before deciding to go ahead with this ad type because they are notoriously disliked.

Experts typically suggest this type of ad when you want to dramatically increase your brand awareness and are confident in the engagement level of your ad.

Keep in mind that because of viewer dislike for this ad type, YouTube no longer offers versions that are 30 seconds long.

  1. Bumper Ads

Bumper Ads Chart

Bumper ads are a specific type of non-skippable ad, but they only last six seconds. 

They share nearly all of their features with other non-skippable ads. The only major difference is that they are only six seconds long. This reduces the time for which you have to hold the viewer’s engagement.

  1. Skippable Video Ads

Skippable Video Ads Chart

With a skippable ad, you give users the option to skip the ad after five seconds instead of having to watch the entire thing. They play directly in the video player.

Skippable ads offer the benefit of showing your brand and affordability. You will only have to pay for this type of ad if viewers watch beyond the first five seconds. Specifically, they have to watch at least 30 seconds of the ad or the entire video if less than 30 seconds. The ad should be at least 12 seconds.

The biggest advantage of this ad type is its affordability. A major downside is that you should plan these ads carefully, so you can achieve some brand messaging in the first five seconds before viewers can skip it. Keep in mind that one report indicates 76% of people will automatically skip these ads.

  1. Interactive YouTube Video Ads

Chart explaining interactive features of ads on YouTube

 All of the types of YouTube ads we already discussed work whether or not you have a YouTube channel and share your own videos. There are also interactive YouTube ads designed for you to add to videos that you post on your brand’s channel.

These include: 

  •   Call-to-action Button: This is a traditional CTA button.
  •   Cards: A small “i” on the screen that viewers can click on to see more features of something mentioned in the video or other related videos or playlists.
  •   Auto End Screens: These are automatically generated and encourage action, such as installing your app.
  •   End Screens: This can be created manually to improve engagement.
  •   Shopping Cards: These connect with your Google Merchant Center account and show relevant products.

The biggest downside of these ad types is that you need to create a video to use them. If you already have videos, though, they can be a great way to improve engagement. After all, people who watch your videos are likely already interested in the information you share in these ads.

Conclusion: why YouTube advertising costs are relevant to your business.

Allocating part of your budget for YouTube advertising costs is an excellent way to further your brand promotion and make the most of your marketing budget. YouTube ads tend to deliver more cost-effective results than other methods. There are seven main types of YouTube ads, and they typically charge per view or action. 

If you want to partner with a company that will help you with promotion and sales, consider the Podium Partner Program.

Megan Schille
Megan Schille Partner Operations Manager

Megan Schille is a partner solutions professional at Podium, the leading messaging platform that connects marketing agencies with their clients.

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