While TikTok is experiencing a meteoric rise, for now, YouTube remains the 'King of Video'. As the platform falls under Google's brand, all advertising is handled via Google Ads – which manages advertising across all Google's products. Under this system, advertisers bid for ad placement, meaning your YouTube advertising cost can range dramatically depending on several factors.

Here are a few key stats about YouTube Ads cost:

-Average YouTube ads cost $0.10 to $0.30 per view or action.

-The average daily budget was $10.

-To reach 100,000 viewers costs, on average, around $2,000.

With more than 2 billion monthly users, YouTube's colossal audience is a fierce bidding war between brands. Nevertheless, depending on a myriad of factors, you could spend more or less than the average.

In this article, we will explore how YouTube ads costs are determined, what you'll need to spend to have an impact, and how to make the most of your budget.

What determines YouTube's ad cost?

YouTube ads work on a cost-per-click and cost-per-view pricing model. Which model you use is wholly up to you, with your ad only being charged based upon user action.

Four factors determine your overall ad cost:

1.Your ad type

2.Your bid

3.Your bidding selection

4.Your targeting options

For example, non-skippable ads typically cost more per click or view than skippable ads. In addition, you can set your bid amounts: though the lower you set the amount, the more likely another ad will outbid you.

Depending on your funds available, you'll need to set a daily budget and determine your Max Cost Per View. Using Google's smart bidding platform is a sensible option for newcomers to YouTube ads. It uses machine learning to calculate the best bidding strategies based on these parameters.

Types of YouTube Ads

YouTube's ads come in all shapes and sizes. The various ad formats all carry different price points, depending on their reach and effectiveness.

-Display ads. Appear to the right of the feature video or above the video suggestions list.

-Overlay ads. Semi-transparent ads that appear in the lower 20% of a video.

-Skippable video ads. Play before, during, or after the main video with the option to skip after 5 seconds.

-Non-skippable video ads. Play before, during, or after the main video and must be watched to completion.

-Bumper ads. Non-skippable ads of up to 6 seconds.

-Sponsored cards. Cards display content relevant to the video, e.g., products featured in the video.

As a rule of thumb: the bigger the ad and the longer it plays, the more you'll spend.

What level of spending sees results?

Most businesses set their max spend per day at around $10. However, depending on the type of ad you select, that can mean your ad is seen a few hundred times or ten times. You'll want to play around with the options to begin with, then work out how viewers interact with your ad.

Moreover, most advertisers also opt for the cost per view model (meaning a viewer will need to watch 30 seconds or more of your ad before you pay).

As you manage your YouTube advertising costs, always remember a simple formula:

Return on ad spend (ROAS) = Revenue / Cost

For example: if you spent $70 per week on YouTube ads and you generated $120 in sales, your ROAS would be: $120/$70 = $1.7, i.e., you earned $1.7 for every $1 spent.

The higher your ROAS, the greater your overall profit. Just be careful; if your ROAS slips below $1, you'll be making a loss. Most companies aim for a 4:1 ratio, i.e., a $4 revenue for $1 costs, according to WebFX. But, depending on your product, you can see your ROAS increase or decrease.

How to maximize your YouTube ads budget

1. Select your target audience

The secret to all phenomenal marketing is knowing your target audience. Ask yourself:

-What's their demographic? Age, gender, income, and country.

-What do they like? What kind of videos will your target audience watch on YouTube?

-What keywords and phrases will show up in your audience's searches?

If you're selling sportswear, ensuring your ad is shown for fitness YouTubers is paramount, as you'll see significantly more traction than if you were marketing to history buffs.

2.Create high-quality video ads

You never want your ad to look more amateurish than the following video. Your video should be high-quality, high-res, with content that'll grab your audience's attention.

Some companies spend as little as $5,000 using home equipment; others invest $100,000 employing a professional crew with the best production values.

It's up to you. Often, however, some of the most engaging ads had a simple idea and a small budget. You don't need to spend tens of thousands – get creative!

3.Keep it short

Your video is not the main event – so get to the point. Even if you're paying more for non-skippable ads, boring, long videos cause people to lose focus.

Get your message across in the shortest time possible. If all you've got is five seconds, what can you say that'll capture your attention and keep them from clicking "skip".

Try to keep your ad to 45 seconds or less. It's long enough to get your message across and short enough to stay fresh.

4.Monitor your metrics

You'll want to monitor your views, likes, shares, and subscriptions. Keeping track of your metrics is key to pushing up your performance. If something isn't working, there's no point wasting money as you wait. You need to refine and adapt to improve your user engagement.

With Google Ads, you can harness real-time insights to create a superior ad campaign.

Minimize your YouTube advertising costs; maximize your reach

Through the ad process, think about your ROAS. Every decision should be about maximizing your user engagement per view. You don't want to waste money on users who won't buy your product or service – tailor your ad to your niche.

References:

https://influencermarketinghub.com/how-much-do-youtube-ads-cost/#toc-8

https://www.webfx.com/social-media/pricing/how-much-does-youtube-advertising-cost/

https://foundr.com/articles/marketing/youtube-ads-cost-breakdown