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How Much Does YouTube Advertising Cost In 2020?

Sam Carr

Sam Carr

October 1st, 2020

Sam obsesses over three things in life: Animals, Films and Marketing. We may have over exaggerated his love for marketing.

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You might not know it, but advertising on YouTube today costs an average of $200 every 1,000 views.

Although that’s just a rough average based on various niches and industries, it should still give you a good idea of how much people are willing to pay.

With over 72 hours of video being uploaded to YouTube every 60 seconds, YouTube is incredibly vast and bring in hundreds of millions of users every single day. No matter what niche you’re in, there’s a good chance people are posting videos about it on YouTube.

If you want to engage with your audience and showcase your products and services, then YouTube is often an untapped source. While your competitors focus on Google search and display ads, YouTube is usually open for the taking.

But how much do you need to advertise on YouTube? And what affects the price you pay?

In this article, we’ll be covering all the essential aspects of how much YouTube advertising costs and what you should budget.

To get things started, why should you be advertising on YouTube in the first place?

Why Advertise On YouTube

The first YouTube video was uploaded on April 23rd 2005, and since then, YouTube has exploded as the number one place to host video content. Nowadays more than one billions hours of YouTube videos are watched every day and for some demographics, it’s become more popular than watching TV.

With YouTube influencers gathering tens of millions of views every month, YouTube is now a valid marketing channel for many big brands.

By running ads on YouTube videos that your target audience watch, it can be an excellent way to get your brand in front of the right viewers. And with excellent data analysis tools available for YouTube videos, advertisers can be even more confident they are spending their money on the right videos.

But how can you be sure people will watch your YouTube ads? Well, unlike TV, users can’t skip them. (Unless they are using AdBlock but then you won’t be charged). In recent years YouTube has actually toned up the aggression on their ads, making it so users must watch around 5 seconds before they can skip them.

Of course, if you create the right ad and pick the right YouTube channel, most users won’t want to skip your ad as it will be so relevant to them! This ability to target viewers with such precision is just another reason why YouTube advertising is growing in popularity.

How Much Does YouTube Advertising Cost?

how much does youtube advertising cost

If you want a simple answer to how much YouTube ads costs, then you’re going to be disappointed.

With so many different factors to consider, it can vary greatly depending on the ad type, location, niche, and length of the ad. Not to mention that with seasonal changes, economic changes and increasing competition, the costs can change quite quickly.

Current statistics show that the average YouTube advertising cost can be anything from $0.05 to $0.30 per view. That’s anywhere from $50 to $300 per every one thousand views.

The type of ad that you run also plays an important part in the overall cost, which we’ll be covering later. But with several different ad types out there, each one has a unique pricing structure compared to the rest.

If you’re just starting a YouTube video ad campaign for the first time, then you should be looking to spend several dollars a day at least. As your campaign grows, you’ll be able to increase your expenditure, but when you first start, you’ll want to make sure you can get sales.

There’s no point investing thousands of dollars in YouTube advertising only to find out your targeting or ads are wrong.

YouTube Ads Cost Factors

youtube ad costs factors

Just like display and search ads, YouTube ads have various different cost factors. This means that businesses advertising in the tech industry will most likely have a completely different cost than someone advertising in real estate.

But what’s the difference between paying 5 cents for a view and 30 cents for a view? Here’s what you need to know about YouTube ad costs.

Location Targeting

As with any advertising network, the location of the target audience plays a huge role in how much you pay. Countries are often split up into different tiers depending on how valuable and profitable their traffic is for advertisers.

It’s no secret that users in America have more money to spend than people in less developed countries. Hence why ad networks often charge more for American traffic over other countries.

The simple reason is that with a limited amount of supply, advertisers are continually bidding against each other for those available views. And often, over the year this demand can peak and trough with the biggest spending happening at Christmas.

How much does YouTube advertising cost? Well for starters it depends on the location you are targeting. Views from more developed countries always cost more than views from lesser developed countries.

Audience Targeting

In order for an ad campaign to be worth the money and successful, advertisers need to be able to target specific audiences. Just like with location targeting, the audience you are trying to reach can also be a big YouTube ad cost factor.

Targeting an audience in the entertainment industry is most likely going to be cheaper than targeting users in the finance industry. The reason goes back to supply and demand.

Businesses in the finance industry are likely to be advertising mortgages and loans that have huge payouts for them. If they make several hundred dollars per sale, then they can afford to spend more on advertising to get that sale. Combine this with several companies all bidding for the same audience, and it’s easy to see why targeting viewers in the finance industry costs more.

Ad Type

If you thought YouTube only had one ad type, then you’re wrong. It might be hard to distinguish the difference between them, but YouTube actually has several.

The main differences between them are if they are skippable or not.

Skippable video ads are shown for five seconds before the viewer can choose to skip it. Advertisers are charged on a cost per view bidding system when a viewer watches 30 seconds or the full duration of your ad. This means that if they skip it and don’t watch 30 seconds, you won’t be charged. Typically these types of ads cost less as fewer people sit through and watch them all.

Non-skippable ads are video ads that are up to 15 seconds long and are not skippable. As you can imagine, with no ability to skip the ad, this means they cost more per view.

If your entire YouTube advertising campaign is made from non-skippable ads, then you can expect to pay more than someone who’s running only skippable ads.

Get The Most Out Of Your YouTube Ad Campaigns

As you can see by now, the cost of advertising on YouTube can vary greatly depending on a number of factors. If you want to get the most of your YouTube ads, then planning ahead and scaling your campaign is vital.

Every YouTube campaign should start out with a small daily budget to ensure that your targeting options are working correctly. The last thing you want is to spend thousands of dollars only to find out you have a problem.

You may also find that your targeting options aren’t as well defined as you thought they would be, and your ads are showing up on the wrong videos.

If you are new to YouTube advertising and have never run a campaign before, then starting small and slow is your best chance of success.

Since advertising on YouTube can get expensive very fast, you want the foundations to be working before you even consider scaling your campaign. This might mean adjusting your targeting, ad types, or even ads themselves before you start to see traction.

A final note about advertising on YouTube is to give it enough time. If you really think it could be a good advertising channel for you, then you need to commit to it. Running a campaign for a few days and stopping it is not enough time. If you want to get the most out of your campaign, you need to run and tweak it consistently for several weeks at a minimum.

Hopefully, this article has given you an idea of how much YouTube advertising costs. It might not be the exact answer you were hoping for, but you should be able to appreciate how estimating YouTube ads costs is no easy task.

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