YouTube advertising is promoting goods and services on this video-sharing platform. It allows brands to reach a large and diverse audience on the second most popular social media platform in the world.

In the article, we explain how YouTube advertising works and provide its benefits. We describe the formats of ads on YouTube and the ways to measure their effectiveness. Also, we give tips to build a successful YouTube advertising strategy.

Is YouTube advertising effective?

YouTube states that viewers are two times more likely to buy products they see on this platform, which proves the effectiveness of YouTube advertising. In this section, we explain why ads on this platform are so successful.

YouTube is the second most popular social media worldwide, with over 2.6 billion people using it at least once a month. Such a huge number of consumers allows business owners to be confident that they will reach their buyer personas. Even if your target audience is quite limited, you can be sure that some of these people watch YouTube.

Also, CNBC states that this platform is the second-largest search engine in the world. It means that millions of people use YouTube to discover new information. Consumers do not use the platform to choose something, but they will most likely purchase it if they see what they need.

Moreover, YouTube is a very convenient social media for advertising. You can set channel keywords, add a website, or allow your channel to appear in other channels’ recommendations using advanced settings. YouTube advertisements tend to be relatively cost-effective, which is why so many companies choose this platform. For example, its global advertising revenues in 2021 were around $28.84 billion.

The incredible success of some YouTube promotions motivates companies to work with this social media. Continue reading to discover the peculiarities of advertising on YouTube.

How does YouTube advertising work?

In this section, we’ll figure out the peculiarities of this type of promotion and explain how YouTube advertising works.

There are two types of YouTube ads: videos and static content (image plus text). The choice of the type depends on the aims of your advertising campaign, budget, and the way you want to pay for YouTube promotions.

Also, there are two pricing models: cost-per-view (CPV) and cost-per-engagement (CPE). CPV means that you pay after people watch an ad that they can’t skip, and CPE is paid when consumers interact with an ad. The fee is based on the advertising format you choose.

Users can watch an ad before or during the video, in the search results, in the bottom line of the video, and appear as a pop-up. The place of an advertisement also depends on the chosen format.

YouTube advertising can be tough to work with at once, but it is highly rewarding. Discover the benefits of this promotion type in the next section.

Benefits of YouTube Advertising

YouTube is the most used social media for research among B2B users, which provides many advantages to the companies that advertise on this platform. We describe these benefits below.

  1. Amazing digital reach. Statista states that 81% of people on the internet have used YouTube. It means that this platform allows you to reach 80% of consumers you can find on the Web. Even very specific companies and products can find their target audience on YouTube. So, if you are interested in increasing brand awareness — there is no better way than YouTube advertising.
  2. Incredible economic efficiency. This social platform allows advertisers to run cost-effective campaigns because brands pay after consumers interact with their ads. Also, its average cost-per-view is $0.010 – $0.030, which is relatively low compared to $0.79 in Google Display Ads in the B2B sphere.
  3. Cutting-edge targeting. YouTube provides not only basic settings like demographics and preferences but more specific like the topic of the ad, related keywords, or certain pages to place your ads on. It allows advertisers to show the ads to their buyer personas at the right place and time.
  4. In-depth reports. This social platform provides lots of analytics to measure the success of your ads. You can learn about the behavior of consumers who engage with your ads and make content more personalized. Also, you can use this data to conduct A/B testing, identify the most effective advertisements and use them to increase the success of your campaigns.
  5. High flexibility. YouTube offers many formats and types of advertising. You can share testimonials, post expert content, or engage consumers with funny videos. Also, you can change the setting of your targeting anytime you need, which makes this platform very flexible.

Most business owners will appreciate these primary benefits of YouTube advertising. However, it sometimes may be challenging to deal with various YouTube formats. We explain the peculiarities of each one in the next section.

YouTube Advertising Formats

There are six main formats of YouTube advertisements. Some of them are almost similar but appeal better to different goals. Discover how to differentiate these types and how to deal with them to make your promotional campaigns successful.

Skippable in-stream ads

They play before or during the YouTube videos, and users can skip them in 5 seconds. The main advantage of this format is that you pay after a viewer watches more than 30 seconds of the ad or interacts with it. Use this format of advertising to increase brand awareness. Note that you should hook the viewers during the first 5 seconds to attract their attention to your company.

Skippable in-stream ad

Source: Media update

Non-skippable in-stream ads

Such advertisements also appear before or during the videos, but users cannot skip them. They can last up to 15 seconds. Companies that use this format pay per 1000 views. Non-skippable ads help increase brand awareness and have one strong advantage. CNBC states that 76% of consumers automatically skip ads, but they have to watch this format until the end, which means that you have more opportunities to stand out.

Non-skippable in-stream ads

Source: Media update

Bumper ads

These ads also play before or during the video, and users can not skip them. Their difference is that they are 6 seconds long or even shorter. Usually, advertisers pay based on the number of views. Companies use this format to transmit short advertising messages and grab people’s attention to make them interested in the brand. Marketers often combine banner ads with other types of YouTube advertising.

Bumper ad

Source: Media update

Discovery ads

Users can see them in YouTube search results and on the right sidebar of watch pages. They are always in the form of a text with a picture that leads to the promoted video after clicking. Advertisers pay after people click the ad and start watching. This format appeals to promote the brand’s videos on the platform because users are already interested in your topic. Google states that such ads increase views by up to 500%.

Discovery ad

Sponsored card ads

These ads look like small call-to-action pop-ups that appear on screen for a few seconds with an ‘i’ symbol in the corner. Viewers can click on them to discover more information. Sponsored cards are rather unobtrusive, and most people find them less annoying than in-stream ads. Usually, such advertisements are relevant to the content that consumers watch. You can use this format of advertising to promote specific products that viewers are potentially interested in.

Sponsored card ad

Overlay ads

They look like banner ads placed on YouTube. Overlay ads are pop-ups containing text and images in the bottom 20% of the video window. People can close these ads anytime they want if they are not interested in your products. However, if they are, the advertisement can lead them out of YouTube on your website or other platforms. You can use overlay advertising to promote products or attract people to your earned media.

Overlay ad

Source: Instapage

Now you know how to deal with different formats of YouTube advertising. Let’s go further and discover how to create and launch your promotional campaigns on this platform.

How to advertise on YouTube

Realizing all the YouTube advertising advantages motivates many business owners to launch their campaigns on this platform. To make them effective and avoid overspending, you should know how to launch them correctly. Discover them in this section.

Step 1. Upload the advertised video

This step is necessary only for video ads, so you can miss it if you want to use sponsored cards or overlay ads. However, if you deal with other advertising formats, it will be better to post videos on your YouTube channel before promoting them. It will help you get organic traffic and discover the audience‘s reactions before the campaign starts.

Step 2. Create a campaign

Sign in to your Google Ads account and choose the option to add a new campaign. Then identify your promotional goal or create an advertisement without recommended aim. Finally, choose a campaign type and the subtype from the suggested ones.

Creating an advertising campaign

Step 3. Define all the peculiarities

Then you will have to choose the campaign’s name, budget, and the average amount of money you are ready to spend every day. Identify the dates the ad will run, choose the language and location of viewers you want to target. Decide where to show your advertisements and how you want to pay for them. Exclude ‘sensitive’ content if you do not want your ads to be shown with it.

Creating an advertising campaign

Step 4. Select the audience

YouTube provides a wide range of characteristics to choose from while describing your buyer personas. Identify one or a few segments of your potential clients. Then give the name to the chosen audience so that you will be able to use it for your future campaigns.

Creating an advertising campaign

Step 5. Finish setting up a campaign

Define the keywords and topics connected with your ad. Remember to add all links, headlines, and other vital details. Then click ‘Create Campaign’ and launch your promotion.

Creating an advertising campaign

Now you know how to set your advertising campaigns running. Continue reading to discover the ways to make them more powerful.

6 Tips to Develop a Successful YouTube Advertising Strategy

Knowledge of the basic principles of YouTube advertising is crucial for launching powerful campaigns. In this section, we provide some tips on making your advertisements more effective and boosting your company in the market.

  1. Develop the strategy for your YouTube channel and post actively. If you are going to lead users to your social media page, advertising messages should be consistent with your other content. Understanding how you are going to represent your brand makes it easier to transmit the holistic image of your company. Think about the videos you will post. These may be product demonstrations, testimonials, or answering FAQs. This content will help build trust with the audience and make them more loyal to your brand. Also, active posting on YouTube can attract potential clients from organic search and, in such a way, make your promotion even more effective.
  2. Grab people’s attention. Remember that your ads should be remarkable and hook viewers even if they are not interested in your products yet. Motivate them to watch till the end and there will be more chances that they will purchase your products. Evoke their emotions by using catchy slogans, unusual formats, or famous actors starring in the video. Tell stories that have the beginning, climaxes, and ends. Make people notice your products and branding as early as possible. It will increase their chances of remembering the advertised company and make them interested in a particular ad and the whole brand.
  3. Continue optimizing your advertising settings. Constant testing and ad settings improvement are vital to successful promotional campaigns. Sometimes even one button can influence your sales significantly. Conduct A/B testings, enlarge and segment your audiences, try to identify the most effective formats, and find out how to optimize your advertising. YouTube provides many settings to drive more engagement to its advertisers‘ promotions.
  4. Use remarketing. It allows you to attract consumers who are already familiar with your company. Maybe, they watched your videos, searched on your website, or already engaged with ads but did not make a purchase. Remarketing reminds such users about the company and may push them to buy your products. To save money spent on remarketing, it is better to use advertising formats pa id per the number of engagements: skippable in-stream ads, discovery ads, sponsored cards, and overlay ads.
  5. Consider reviews’ promotion. According to Learn Hub, 92% of people are more likely to buy a product after reading a positive review. Advertise with the videos where your existing clients talk about their experiences. It will make users trust your company and increase their desire to purchase your products. Moreover, it will also increase your customer satisfaction because people value brands that care about their clients’ feedback.
  6. Try Brand Lift Study. It is a free way to estimate the effectiveness of your advertising campaigns and discover the ways to increase them. The platform usually creates two groups from your target audience and shows your video ads only to one of them. Then YouTube polls users, compares the answers of the groups, and identifies how your advertisements influence their opinions about your brand and products. You can use this data to discover how effective your ads are. The study is free, but you should pay to promote your advertisements.

Congrats, now you know what YouTube advertising is, why it is effective and how it works. You know the formats of YouTube ads and can launch your effective promotions.

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