Paid Media 8 min read
Marketing Intern @ Galactic Fed
Published 11 Aug 2020
The wave of the future is here: video marketing. By 2022, 82% of the global internet traffic will come from video streaming and downloads. Video, utilized as a marketing medium to reach audiences online, has skyrocketed in popularity - and for good reason - compounding consumer proclivity for video is a result of its ability to capture, engage, entertain and absorb audiences. In the era of “Digital Darwinism”, failing to incorporate video into your marketing strategy, will put your business at a substantial competitive disadvantage - but unless you’re living under a rock, you probably already recognize the importance of leveraging video marketing channels, especially YouTube.
The principal reason people visit YouTube is to watch videos. YouTube is far more than just the largest video platform in the world: it is a uniquely designed hybrid channel that serves as both a search engine and a social media network. With 2 billion active monthly users, YouTube ranks second as the largest search engine and social media networking site, globally. With extensive global reach and accessibility, YouTube is unsurprisingly a leading paid media advertising channel businesses utilize world-wide. The platform’s evident impact on purchasing behavior also illustrates its power. 90% of consumers have discovered a product or service on YouTube and when YouTube users watch an ad to completion, they are 23x more likely to visit or subscribe to a brand channel, share a brand video, or watch more of that brand. If you’re searching for a new approach to build brand awareness, drive traffic and engagement, and improve ROI, YouTube advertising may be your solution.
From an advertising perspective, price is an essential component to acknowledge. Despite YouTube’s apparent statistical advantages, evaluating potential costs remains a fundamental initial step in launching a profitable campaign.
So, how much do YouTube Ads cost? The answer nobody wants to hear: Well, it depends. But don’t be discouraged - we’ve assembled this guide to help you decide whether YouTube ads align with your marketing objectives, and eventually, harness the power of YouTube advertising.
Factors That Affect YouTube Ad Cost
How Much Do YouTube Ads Cost?
There is no fixed price you’re required to spend on advertising. YouTube’s flexible platform enables ad placement for as little as $1 per day. Depending on your advertising goals, the cost of YouTube ads is calculated based on multifarious components: your budget, the bid placed, the competitiveness of the designated target audience, and the type of ad you run. Across YouTube’s ad platform, ad campaign performance is analyzed using variable metrics (impressions, views, engagement, and clicks). The dominant payment models or metrics are CPM (“cost per thousand”), CPV (“cost per view”), CPC (“cost per click”), and CPA (“cost per action”). CPM is the cost for every 1,000 impressions. CPV is the cost for every view. Advertising rates vary regularly, but on average businesses pay $0.10 to $0.30 per view or action, which amounts to $10 per day. To reach 10,000 viewers on YouTube, the average price is $2,000. Broadly speaking, YouTube is relatively cost-efficient compared to other highly populated advertising platforms. YouTube is one of the best channels for building a cost-effective advertising campaign, but be wary of getting sucked into a financial black hole.
Fed Fact: CPM calculators are useful tools that can project the total cost of advertising campaigns by taking into account your ideal CPM rate and total ad impressions.
\ YouTube ad formats
YouTube’s advertising costs vary and are contingent upon the ad format you select. Since each ad format has unique marketing objectives, each is individually priced and measured. YouTube offers a range of advertisement formats, and not all will be well-suited to your campaign’s goals and interests. Your campaign’s initial marketing objectives should provide clear guidance as you select which ad formats will be most appropriate, efficient, and cost-effective. YouTube ad campaigns list goals including sales, leads, website traffic, product and brand consideration, and brand awareness and reach. YouTube’s average bid type prices include $3.20 per click, $0.10-$0.30 per view, and $10 per 1,000 impressions, but do not directly calculate the cost of your ad campaign. Rigorous evaluation and comparison of these diverse ad formats are crucial to determine which, if any, are appropriate for your campaign.
With diverse ad format offerings and advanced targeting capabilities, YouTube ads are a flexible, effective, and cost-efficient advertising strategy. In relation to other online advertising platforms, YouTube is a neoteric advertising platform susceptible to constant modifications. Inevitably, promoting your business on YouTube isn’t the most instinctive strategy. With proper guidance, YouTube Ads are a valuable addition to your marketing mix.
Marketing Intern @ Galactic Fed