YouTube has one of the largest audiences for video advertisements. In fact, YouTube is the third most popular website in the world and has an average of 1 billion users visiting every single day. If you’re looking to advertise your business on YouTube, you have a lot of different options. From pre-roll ads that play before another video begins to overlay ads that appear while a user is watching another video, there are several ways to advertise on YouTube. How much does a YouTube ad cost? There are many variables when it comes to determining how much a YouTube ad costs. Let’s take a look at everything you need to know about advertising on YouTube as an advertiser.
What Is a YouTube Ad?
An ad, or advertisement, is any marketing communication that offers goods or services, or promotes a cause. This can come in the form of a text-based ad in a newspaper or magazine, a commercial on TV or even as a sponsored post on social media. For YouTube ads, there are several options including pre-roll ads and video ads. Pre-roll ads are the advertisements that play before a video. They can be anything from a commercial for a new car to a video about a new game app, and are typically around 15 seconds in length. You also have the option to have the advertisement end after 5 seconds or 20 seconds. Pre-roll ads are highly effective. According to Google, they have a click-through rate (CTR) of 5%. That means that on average, 5% of people who see the ad will click on it. Video ads are the full-screen advertisements that run in between videos and cost-per-view (CPV) campaigns.
How Much Does a YouTube Pre-Roll Ad Cost?
The cost for a YouTube pre-roll ad will depend on a lot of variables. The first thing to consider when determining how much a YouTube pre-roll ad costs is the targeting. YouTube’s targeting options are very robust and you can choose to show your ad to any type of user. For example, you can choose to show your ads to people between the ages of 22 and 34 who live in the United Kingdom and have watched gaming videos on YouTube in the last month. Pre-roll ads are 15 seconds long and the price will depend on the amount of views your ad will have. You can choose to have your ad run on a cost-per-view (CPV) or cost-per-thousand-views (CPT). To calculate the cost of a YouTube pre-roll ad, you’ll need to know the following:
- View Rate: The amount of views your ad has over a set period of time.
- Ad Rates: The amount that YouTube charges to show your ad.
- Conversion Rate: How many people who saw your ad clicked on it.
- CPM Rate: The amount YouTube charges for every 1,000 views.
- CPM Rate x Conversion Rate: The amount you would be charged for every 1,000 views if the same number of people who saw your ad clicked on it.
- View Rate x CPM Rate x CPM Rate x Conversion Rate: The amount you would be charged for every 1,000 views if the same number of people who saw your ad clicked on it.
How Much Does a YouTube Video Ad Cost?
YouTube video ads are full-screen advertisements that run in between videos. They are also known as cost-per-view (CPV) campaigns, meaning that advertisers pay per viewer. The only difference between CPV and CPV campaigns is that CPV campaigns are only available to select advertisers. Video ads are the most expensive type of ad to run on YouTube because they get the most views. You can expect to pay between $1 and $5 per viewer. If you are advertising on a platform like Facebook or Instagram, you will pay anywhere between $0.30 and $1 per viewer.
How Much Does an Overlay Ad on YouTube Cost?
An overlay ad is an ad that appears on the bottom of the video that you are currently watching. Because they are so simple and quick to make, these ads are typically used to promote a product or service. The cost of an overlay ad on YouTube will depend on the platform you choose to host your video. If you choose to host your video on YouTube, the cost of your overlay ad will vary depending on the platform you choose. If you choose to host your video on other sites, such as Facebook or Instagram, you will pay less for your ad because these platforms have a larger user base. You can expect to pay anywhere between $0.50 and $1 per thousand views on YouTube.
When Is the Best Time to Advertise on YouTube?
The best time to advertise on YouTube will depend on the type of ad you choose to run. If you choose to run a pre-roll ad, you’re in luck because these ads have a very high engagement rate. According to Social Media Today, pre-roll ads have an average engagement rate of 38%. This means that 38% of users will click on the ad before they watch the video they clicked on. Video ads are best run when the demand for your product is high. For example, if you are selling a winter jacket and it is winter, you will want to run your ad during the winter months. This will ensure that your ad reaches the largest amount of people possible. If you run your ad during the summer, fewer people will be searching for a winter jacket.
Are There Any Exceptions to These Estimates for Youtube Ads?
Yes, there are a few exceptions to these estimates for YouTube ads. If you are running a brand-new ad, you can expect to pay less per click because your ad will be new and not many people will have seen it. Similarly, if you are targeting your ad to a niche audience, the price will be lower because the competition is smaller. You can also expect to pay less if you are running a cost-per-view (CPV) rather than a cost-per-click (CPC) campaign. This is because with a CPV campaign, your ad is only shown to people who are already interested in your product and are just waiting for the ad to end before clicking on it.
Bottom Line
When it comes to YouTube ads, the more you’re willing to spend, the more you’ll get out of it. While the prices listed above are general estimates, they will vary depending on your campaign. If you want your ad to perform well, you need to make sure it stands out from the crowd and is relevant to the audience it’s being shown to.