With every passing year, brands are changing and adapting to the new growth climate. Automation is changing the game for most PPC channels, especially Google Ads. Data-driven creative is increasingly influencing all ends of the marketing mix. Video ads have been a staple for many years at this point, but continue to dominate our screens more and more each day. 

YouTube has gone from an advertising channel that is a “nice to have” a few years ago and has morphed into a channel that is a must. With this opportunity though, comes lots of questions about strategy. What’s the right approach for this behemoth of an ad channel? What stage of the funnel does this play a role in? How is success measured?

We all use YouTube, at least 2.6 Billion of us that is, but here’s how Tuff thinks about YouTube fitting perfectly into every growth marketing strategy we develop. 

YouTube Ads as a 2-Pronged Marketing Strategy

Typically, we utilize YouTube Ad campaigns by having one of two core goals – awareness or performance. Awareness campaigns are optimized to drive as many views and impressions as possible to a targeted audience in order to generate interest in the brand, while performance campaigns are optimized to drive action on the site with users taking a specific conversion action. 

Both of these have their place in an overall Marketing Mix, but depending on the stage of your business, one may be more favorable than the other. Let’s dive in!

YouTube Advertising for Performance Marketing 

Performance is the key word here. When utilizing YouTube Ads for performance marketing, the goal is to drive conversions. These may be leads, sales, or any other specific conversion event configured on your website that you’re looking to drive. 

Choosing a Campaign Type

When launching YouTube campaigns for performance, we recommend using the Video Action campaign type. This campaign type is optimized to drive conversions on site. We would consider this to be the most similar to many Google Search bidding strategies that you may be familiar with: Target CPA, Max Conversions, Target ROAS. 

While this campaign type will typically have higher CPVs than a Brand Awareness campaign, it will provide more conversions and should be measured by CPA and conversion volume. Optimizations should be based on the top performing creative and audience segments which are driving the lowest CPA possible.

Audience testing

So much of a Growth Marketing Strategy hinges on proper Audience testing. During a campaign launch, these should be continuously tested with the core KPI, CPA, being used as the north star when making optimization decisions. A very simple way to go about this is: audiences with the lowest CPA receive larger budgets over time and audiences with the highest CPAs should be removed from campaign targeting.

For performance based campaigns, we recommend choosing audiences that are higher intent and more likely to convert. For example, an Affinity audience for “Avid Investors” may be higher intent for offering financial services than a “Business Interest” audience may be. 

Audiences can include Custom Segments, Affinity, In-Market, Interests, or retargeting lists. Retargeting will usually prove to be the highest intent group since they are familiar with your brand, but this is why testing is so useful. You may be surprised at how powerful some of YouTube’s audiences are. 

Video Marketing

While selecting the correct campaign type is necessary and audience testing is a must, you have to also leverage creative testing to ensure that you are testing various messages that align with each stage of the user journey. The impact of data driven creative cannot be overstated here. It can make or break a campaign of any type, but this is especially true for video ads. 

Conversion optimized campaigns targeting prospecting audiences are introducing the brand to new users. There is still plenty of room to test which message resonates best with this new audience, but the main focus is on introducing your brand or product. We like to test variations that include user generated content, bold animations, or strong explainer videos. These users are unfamiliar with you, so focus on engagement as well as conversion metrics once they are on the site. High engaging ads should get a larger percentage of your budget. 

For retargeting, we can leverage more specific features or even put forth promotional messages that will appeal to users who are already familiar with the brand or product, but are still in the decision making stage.

Creatives should be optimized for specific devices as well. With the introduction of YouTube Shorts, there is another focus besides a standard 9×16 YouTube video ratio. Desktop and Mobile placements will behave differently, so this is important to keep top of mind when optimizing video ads. 

We put together a list of YouTube Ad Examples you can check out here. 

Evaluating Success

There are a few key metrics and KPIs that will be the main focus for a YouTube performance campaign. These are:

• Conversion volume
• CPA
• Conversion Rate

Performance based campaigns are just that, based on performance. This makes measuring success pretty straightforward and tied directly to leads, sales, or revenue. Since these conversion metrics are relevant for any ad channel, these YouTube Ads can be put up side by side to other channels for direct comparison. 

One benefit of running a performance YouTube Ad campaign is that you can lean on CRO to help improve results. Small changes in conversion rate on your landing page can pay huge dividends in a short period of time. We always recommend integrating CRO wherever possible when testing and evaluating KPIs. 

Utilizing YouTube As for Brand Awareness

YouTube truly excels at getting a brand in front of new faces. Remember, 2.6 BILLION active users. Basically endless opportunities to grow your audience. Here is how we tackle a brand play with YouTube Advertising. 

Campaign type

In addition to optimizing YouTube campaigns for direct conversions, you want to leverage YouTube strategically to generate brand awareness. This is done by creating prospecting campaigns optimized for reach. The goal is to drive low CPMs and low CPVs. Traffic, traffic, traffic. 

The two main bidding strategies for a Brand Awareness campaign on YouTube, are Manual CPV or Target CPM. One focusing on Views and the other on Impressions. Even though the main target is different, they are both focused on  driving as many eyeballs to your ads as possible. We tend to start with a Target CPM and test throughout the campaign, but both are incredibly effective at driving views, impressions, and traffic to your site. 

While these campaigns typically do not result in direct click-thru conversions, these campaigns can play a vital role in introducing the brand to as many people as possible. 

What kind of Audiences are available?

In the Google Ads platform we have access to a plethora of prospecting audiences to work with. As mentioned above, these include the likes of Custom Segments, Affinity, In-Market, Interest, and Retargeting lists. The difference between Brand and Performance audiences is that with a Brand campaign, the goal is to go broad. You will want to focus on audiences that drive low CPMs and CPVs. 

As we have continued to hammer home, testing audiences is a major key. Focus on audiences driving the cheapest traffic. Remove the ones that are expensive outliers. Besides the standard volume metrics, we recommend monitoring Time on Site metrics as well once users land on your site. Quality always matters, so remember to optimize towards the users who are the highest engagers. 

For a full list of available audiences, check out this list from Vid Hoarder. 

How is success measured?

Measuring success for a Brand campaign is not as straightforward as Performance campaigns. Brand KPIs are harder to both measure and communicate results. These campaigns are more of a long term play. Data does not necessarily roll in over night, but instead has lasting effects that can potentially affect all marketing channels months down the line. 

When looking at daily and weekly data we monitor some pretty standard volume metrics. Optimizing copy, creative, and audiences lean on the data that comes in using these KPIs. If one creative has a much cheaper CPM then maybe shifting budget to favor that video ad is the right play. Sometimes certain audiences are more likely to click a YouTube Ad. In that case, we may tend to add more focus to those users over others. Here are the metrics in question:

• Impressions
• Clicks
• CPC
• CTR
• CPM
• CPV
• View Rate

Now when we are aiming to measure the long term, true impact of a YouTube Brand campaign, we dive a little deeper. Let’s use a financial planning client as an example. 

Search campaigns are driving leads at a $20 CPL. Really efficient and abundant. Now, a YouTube Brand campaign may be only bringing in leads at a $200 CPL. At first look, it would be easy to decide that this campaign is just not working for you. When measuring with ROAS or CPL, the numbers do not lie. 

The problem here is that these campaigns are not meant to be compared to one another. These numbers do not account for the thousands, or potentially millions of eyeballs that are exposed to your brand through a YouTube Brand campaign. Average Cost per View can easily be as low as $0.05. A single $1 can go a long way to reach new users. 

This kind of exposure trickles down to Organic, Direct, and all other sources of traffic when measured over an extended period of time. Measuring lift in these other channels is imperative to evaluating success of a brand campaign. 

During the campaign flight, is there a lift in Branded Search? Are more users coming in through Direct while this campaign is running? Has the percentage of New Users entering your site higher than before the YouTube campaign launched? All of these are questions that can be answered when evaluating your success. One of the best ways to do this is through isolated testing. Queue the next section please! 

Isolated testing

For the cleanest possible measurement, these campaigns can be launched in isolation, meaning there are no additional top of funnel/brand awareness marketing efforts being added shortly before, during, or after the campaign run. Testing in isolation like this will help tremendously when communicating the data that rolls in. 

One of the easiest ways to test in isolation is through specific Geographic targeting. This can be any GEO relevant to your business, but our recommendation is to focus on what we call 2nd tier geos. These are usually cities or states that rank in the top 10 of total users for your business, but are not the absolute highest traffic sources. 

For example, New York might drive the most users on a monthly basis for your website. Instead of testing in your most important market, move down the list to another city, let’s say Chicago. Chicago has more than enough volume to bring in significant results, but is not the highest value market available. Once you find success in a market like Chicago, that gives you the go ahead to test in larger markets such as New York in this example. 

The key here is to focus on a DMA that has significant volume. A smaller city such as Knoxville, won’t be able to provide abundant data nearly as quick as a city such as Chicago. 

Campaigns are isolated, and have been running for 3 months. Now what? This is when you can utilize tools such as Google Analytics to accurately measure the impact of your flights. Focus on three areas of performance:

• KPIs before a campaign launch 
• KPIs during the campaign
• KPIs after the campaign is over

Using data from all three of these timetables will help paint the picture of the effect of your brand YouTube campaign. 

Back to our example of Chicago, if you saw 10,000 new users a month coming through Organic traffic before a campaign flight, and then saw an increase to 15,000 average monthly users coming in from Organic, this is a great sign that your brand efforts have had a positive impact. If now measurable lift is evident, this indicates potential creative or audience issues. Creative may not be resonating with the audiences you are targeting. 

YouTube Advertising is not going anywhere anytime soon. No matter the business objective, hop on the train to get instant access to over 2 billion users. We have found Brand Awareness and Performance campaigns work well across all kinds of industries. It’s all a matter of testing and patience. Find the right mix between the two and great things are bound to happen. 

Chris Alarcon

Chris is a PPC Strategist based in Nashville, Tennessee. When he’s not scaling Google Ads & YouTube campaigns, he enjoys longboarding, tinkering with automation tools, and a little bit of gaming.

The post Developing A Youtube Ads Strategy for Brand Awareness & Performance appeared first on Tuff.

Author Note: This post was updated in October 2022 with new stats, information, and resources. 

Utilizing video in your marketing efforts is by no means a new concept. Advertisers have been able to take advantage of the benefits of video advertising for years. It is, however, becoming more and more important, by the day, to engage with the ever-expanding marketplace that is available through video content. For brands that need self-serve video advertising opportunities, the main player in this space is, of course, YouTube Ads. YouTube just so happens to also be the 3rd most visited site on the web behind only Google and Facebook, making it an easy and efficient way to get your message out to the world with video ads!

If you’re onboard for using video in your advertising strategy, but not quite sure where to start, that’s okay! Whether you’re a large eCommerce platform, small business, or growth marketing agency, you can capitalize on the unique audience (two billion monthly users by the way), YouTube has to offer. Taking advantage of YouTube’s incredible video ads inventory really only involves two things. First, you need a strong YouTube strategy (we have you covered). Second, you’re going to need to determine your video ads budget. This begs the question though; how much do YouTube Ads Cost?

Your YouTube Ads cost will depend on a few main factors. In short, these factors are: bidding, targeting, ad placement, and ad formats. With these key factors in mind, there are countless different ways to structure YouTube advertising campaigns to reach your marketing goals. This makes it really difficult to pin down an exact cost and makes budgeting for success difficult. You may even read online that an average CPV can be between $0.02 and $0.20. You might also read that you can expect an average CPM to be between $2 and $10. These may seem like relatively small numbers, but the difference between a $2 and $10 CPM is actually massive, especially for larger budgets, and will certainly add up over time, so this makes it hard to know which sources to believe. To get the full picture of what YouTube Ads cost may look like for you, we have to dive a little deeper. 

YouTube Ads Bidding Strategies

Deciding on your YouTube Ads bidding strategy is the first step in creating a successful YouTube Ads campaign and the first step to determining your potential YouTube advertising cost. Unlike Google Ads, where you can leverage a more traditional and familiar Cost per Click model to predict your budgets, the three types of bidding strategies on YouTube Ads are Cost per Thousand Impressions (CPM), Cost per View (CPV), and Maximize Conversions. As you can expect, actual costs for your YouTube ads campaign will vary based on which of these three options you choose.

CPV (Cost Per View)

Cost per View bidding allows you to optimize for how much you want to pay for each singular view. A view counts when a user watches 30 seconds of your video, the full video if it’s less than 30 seconds, or interacts with the ad itself. With this bidding strategy, you’ll set a daily budget or campaign budget, then a maximum amount you’re willing to pay per view, and YouTube Ads will work to keep your costs under or even to this bid cap. 

You want to make sure this amount is competitive in your industry so your ads will serve successfully, but ultimately, this will be discovered within the first few days of launching your campaign. If your ad isn’t serving but is marked as eligible to serve, chances are you need to raise your CPV bid to become competitive in the auction. 

CPM (Cost Per Mille/Thousand Impressions)

In contrast to CPV, the CPM bidding strategy allows you to bid based on the cost per thousand impressions. YouTube Ads will optimize your bids to maximize your unique reach. This strategy makes more sense when you want to increase your brand awareness and visibility and aren’t so concerned about direct click-thru conversions (more on those later). 

For this bidding strategy, your total YouTube Ads cost will still be capped to your set daily budget or campaign budget, as well as your target CPM.

Maximize Conversions & Target CPA

If you are not as concerned with brand awareness and are instead looking to leverage YouTube Ads to drive efficient conversions, then the Maximize Conversions bidding strategy is the best strategy for you. First, we should note that this bidding strategy requires setting up conversion tracking first and ensuring that it is firing correctly. Without having relevant and correctly tracked conversion data funneling into your Google Ads account, the campaign utilizing a Maximize Conversions bidding strategy will not know how to optimize correctly. 

When going through the campaign setup, you will set a daily budget to allow YouTube Ads to spend in order to maximize the number of conversions you will receive within your set daily budget. CPA can vary with this bidding strategy but you do have the option to set a Target CPA if you have a specific number you’d like to achieve as part of your YouTube Ads strategy. For brand new campaigns, a best practice is to begin without a target CPA, gather the relevant conversion data, and then set a target CPA based on the conversions you’ve been able to receive so far.

Audience Targeting on YouTube Ads

Once you’ve decided on the correct YouTube Ads bidding strategy to achieve your marketing goals, selecting the right audiences will help your video ads campaign move closer to life. Of course, without exposure to the right people, your advertising efforts will almost certainly go to waste.

In addition to the aforementioned bidding strategies, audience targeting is one of the biggest factors determining how much your YouTube advertising costs. YouTube allows you to choose a target audience in 3 main ways; affinity, in-market or life events, and custom audiences, which includes retargeting. Your total YouTube advertising costs will vary depending on which route you choose for your target audience, but it’s beneficial to test multiple audiences at the same time to see what works best for you! Chances are, the first audience you run with may not give you the best results. Continuous testing and optimizations will increase your chances of YouTube Ads success. Now, let’s dive a little deeper into each of the audience segment types available for YouTube ad campaigns.

Target Interests With Affinity Audiences

Affinity audiences are a popular audience segment devoted to users’ interests and habits. You can define exactly who you want to reach. By including relevant customer interests, you can feel certain that your message will reach the people who are interested in what you are offering. 

High Intent Targeting With In-Market & Life Events

Another effective way to find the perfect audience for your YouTube video ads is by targeting in-market and life event segments. With this kind of targeting, you can not only find the right people to serve your YouTube video ads to, but you can make sure to find them at the right time. In-market and life events targeting is a powerful tool to be able to target customers while they are actively searching for products or actively experiencing life events that may coincide with your business. 

Get Specific With Custom Segments & Retargeting Audiences

Our final, but incredibly effective YouTube Ads audience targeting method, is Custom Segment targeting. Custom Segments allow you to build custom audiences based on a variety of factors, including retargeting to your past website visitors or YouTube video ads watchers, as well as creating an audience based on relevant search terms that users have recently searched into Google Ads.

Whether you’re a startup looking to advertise on YouTube for the first time, or a company that has been in business for 15 years, you can utilize the full potential of retargeting. This method relies on reaching users you have data on already. You can target customers who have been to your site but exclude anybody who has converted. Retargeting tends to bring in lower CPC’s and higher conversion rates since your user base is more familiar with your brand. No successful PPC strategy is complete without retargeting efforts. 

In our experience of testing each of these YouTube Ads audience types, Custom Segments and retargeting audiences are generally more expensive than their Affinity & In-Market counterparts, but typically provide awesome results that make the extra YouTube Ads cost worth it, especially when looking to drive conversions and maintain a target CPA.

Choose The Right Ad Placement With Content Targeting

This aspect of your YouTube Ads strategy acts as an extension of your audience targeting. You can layer on multiple dimensions to your audiences to specify the specific content your ad is going to show up on. This can be done using relevant keywords to your business, topics that your product may be a part of, or even placements on specific videos or channels within YouTube. Adding additional placement layers like those we’re about to discuss will help hone in your audience to efficiently spend your budget by reaching those most likely to resonate with your YouTube Ads and keep your goals top of mind. 

Keywords

If you are running Google Search ads, this is a perfect time to incorporate some of your most successful keywords into your campaign. 

Topics

Utilizing topics as a placement is similar to Affinity audiences, but instead of targeting users no matter what content they’re watching, Topics will add the extra layer of targeting your audience only when they are watching content related to the topic you’ve chosen. Topics allow your YouTube ads to serve the right people at the right time with interest based topics. 

Placements

The last form of content targeting for a YouTube Ads campaign is Placements. Although similar to Topics in the sense that you can layer in Placements to only show your ads on related content, if you want to go one step further and have your YouTube ads appear only on selected specific channels or even videos, you can add those dimensions here. Be careful to keep the volume in mind so your campaign has enough users to attract. Oftentimes a YouTube Ads campaign heavy in Placements targeting won’t reach it’s full daily budget due to the volume throttling that naturally comes with selecting specific Placements.

Ad Formats

Last but certainly not least is your YouTube ad formats. Different ad formats will require different creatives along with different budgets. The more engaging your creative is, the more of a positive effect it will have on your overall YouTube Ads cost. 

The most popular ad formats offered by YouTube include:

Skippable In-Stream Ads

Skippable video ads are one of the most popular and familiar YouTube Ad formats. Skippable video ads can be shown at the beginning, middle, or end of a video. A viewer can skip these YouTube Ads after 5 seconds, so be sure to incorporate an engaging intro to hook the viewer early and tap into your ad’s full potential. 

Non-Skippable In-Stream Ads

Similar to skippable video ads, the non-skippable ads format can show YouTube video ads in the beginning, middle, or end of a video, but the key difference is that the non-skippable ads cannot be skipped. This ad format can be cost-effective since you will only be charged if a user watches the YouTube video ad for at least 30 seconds. 

Bumper Ads

One of the most efficient ways to advertise on YouTube is by using Bumper Ads. This ad format is 6 seconds or shorter and will be placed before, in the middle, or at the end of a video. You can keep your creative costs low by utilizing this short format. 

Video Discovery Ads

With Video Discovery Ads, your video ad will show up next to related videos, as a result from a YouTube search, or on YouTube’s mobile homepage. Your cost will look different with this format since you will be charged when a user clicks on your thumbnail as opposed to a cost per view or cost per impression metric. 

It’s important to remember that there is no magic number for how much YouTube Ads cost. It’s an ongoing process that benefits from constantly testing to find what works best for your business. There are many core aspects that make up a successful YouTube Ads campaign, but continuous testing of the various bidding, audience, placement, and ad format types will get you closer to your goal. 

There is no one size fits all approach, but if you utilize all of the optimizations at your disposal, you can find sustainable long-term success with YouTube advertising.

Chris Alarcon

Chris is a PPC Strategist based in Nashville, Tennessee. When he’s not scaling Google Ads & YouTube campaigns, he enjoys longboarding, tinkering with automation tools, and a little bit of gaming.

The post How Much Do YouTube Ads Cost? We Spent $500,000 In 2022 To Find Out appeared first on Tuff.