How Does YouTube Advertising Work?

YouTube Advertising on a TV

YouTube is a large and fast-growing website. It is the second most visited website in the world, outscored only by its parent company, Google. YouTube’s large reach and popularity make it a prime venue for advertising. This guide will give you the basics on YouTube advertising and why it might be right for your business.

There are several YouTube ad formats:

  • Skippable video ads (TrueView Instream) – Skippable videos are a good option because they carry little risk. You only pay for the ad after it has run for 30 seconds, ended, or the viewer has clicked on it. So, if a viewer chooses to skip the add, you do not pay.
  • Non-skippable ads (including bumper ads) – If you are targeting a very specific audience with an important message, non-skippable ads can be a strong choice to get your full message to potential customers.
  • Video discovery ads – These ads are a good option to find new potential customers by targeting audiences that are similar to your current customers.

Is YouTube Advertising Effective?

So, how effective is YouTube advertising? First, let’s take a look at who uses YouTube; in other words, your potential audience. Over 90% of 18-44 year old American internet users watch YouTube videos. But, YouTube is not just for younger generations. In fact, over half of American internet users age 75 and older watch YouTube videos as well.² That gives advertisers millions of potential viewers to reach. If you think YouTube advertising is only for the big dogs, consider this; the number of small- and medium-sized businesses who advertise on YouTube has doubled since 2016.² That is because they know what a powerful tool it can be.

YouTube Advertising for Brand Awareness & Increasing Consideration

You know by now that YouTube has millions of daily viewers in the United States alone, but your message will not likely pertain to all of them. Like with any advertising method, defining and reaching a targeted audience is key. Luckily for advertisers, YouTube uses detailed targeting and powerful analytics to ensure that you reach the right audience. Remember, YouTube is owned by Google, so it has access to Google’s user information and advanced advertising technology.

Just having the right content in your video is not enough for making it effective either. It is also important to choose the proper ad format. Choosing the right advertising method is important and depends on your message and your audience. Otherwise, you may frustrate viewers by forcing them to watch content that they feel is not applicable to them. Targeting the right users with an optimal message and format is key to maximizing the effectiveness of any brand awareness campaign.

YouTube advertising also includes some very powerful options to increase consideration for your brand. By leveraging remarketing, advertisers can get in front of users that have previously engaged with their brand on YouTube. This empowers advertisers to do powerful things like create a sequential video ad series or provide information updates to users that are already interested. Actions like these can help to increase consideration for your brand and drive potential customers towards action.

When used in the right ways, YouTube advertising can be a very powerful tool in a digital advertising strategy and for moving users through the marketing funnel. For more information on how to integrate YouTube into a larger digital advertising campaign, read our agency article on the topic CREATING A DIGITAL ADVERTISING STRATEGY.

YouTube vs TV Advertising

You may still be wondering if YouTube advertising can be more effective than traditional outlets such as television. Although TV advertising can still be a very powerful tool, in many cases YouTube advertising can be a lower cost and higher efficiency alternative; especially for lower budget operations where every advertising dollar counts. But that doesn’t mean it still isn’t a powerful tool for large companies as well.

Let’s go more in-depth on YouTube’s affordability. As stated above, YouTube offers strong targeting technology to make sure you reach the right users. The cost per view can also be limited so that you aren’t spending more than you are comfortable with. Lastly, the frequency of impressions and views can be capped to prevent showing the same information to customers too many times. All these options translate to less wasted advertising spend and allow you to create a flexible campaign that will suit your business.

As discussed earlier, YouTube can effectively use remarketing to put your content in front of highly targeted viewers, which TV cannot do. In the same vein, YouTube can show you just how effective your ads are, with analytics such as how many people are viewing your content and engaging with your content.

In an average week, more adults aged 18 and older watch YouTube videos on mobile devices than cable network television during prime time.² Additionally, Google research found that YouTube mobile ads are 84% more likely to hold viewers’ attention than TV ads.² YouTube is undoubtedly a strong player in the entertainment game, as it continues to compete with TV for our attention.

Facebook vs YouTube Advertising

Many businesses advertise on Facebook, and it can be a very viable platform as well. When deciding whether to focus more on YouTube or Facebook, keep the following in mind. First, consider where your audience is more active. Then, think about where your ad would fit in better. Do you want to reach your target audience while they are scrolling through social media or while they are watching videos? Think about the engagement level and the content of your ads. Finally, consider each platform’s marketing features. YouTube remarketing is a powerful tool to increase consideration, while some Facebook formats are more conducive for driving action and conversions.

Advertising on YouTube is something that companies of all sizes should consider. It offers flexible and personalized options as well as detailed analytics to allow you to see just how effective your campaign is. As a powerhouse in the entertainment industry, YouTube captures the attention of millions of people every day. Advertising on YouTube can help you do the same.

YouTube: Guide to Trueview – think with Google
2 Learning the Youtube Stats – Hubspot