Author’s Note: This post was updated on March 8, 2023, with new information, links, YouTube ad examples, and data.
Admit it: we kind of take YouTube for granted. The website that began as a simple nexus for amateur video has become a media titan, to the extent that many people don’t appreciate its enormous influence. Believe it or not, YouTube is the third-most visited site in the world, behind only Facebook and Google. Each and every month, people consume 6 billion hours of video on YouTube. To have such an enormous audience on a single platform is rare, and it makes sense that YouTube ads have become a preferred marketing technique for many businesses.
When it comes to advertising, YouTube provides clear benefits that have made it immensely popular. Consider the following YouTube Ad stats in 2022:
- 2.6 Billion monthly users
- Net Global video ad revenues in excess of $29 Billion a year
- Used by 91 percent of people between the ages of 30 to 49
- Used by 95 percent of adults 18-29, more than even Facebook
Clearly, YouTube has a massive reach. It is a unique hybrid of social media site and search engine, and draws in viewers for a host of reasons. As a search engine, YouTube ranks behind only Google, as users use it to find info on everything from World War II, to how to unclog a toilet.
In terms of interaction, YouTube is the third-largest social media network. If you accept Forbes’ claim that all internet users want either information or social interaction, YouTube manages to provide both. Its reach is so encompassing, it actually engages more people between the ages of 18 and 49 than either broadcast or cable TV. Think about that for a moment, and consider the benefits of advertising on a platform that reaches the widest possible audience.
How to Advertise on YouTube
Like any advertising tool, the way to garner the most benefits from YouTube ads hinges on your strategy. Aalap Shah is the founder of 1o8, a Chicago-based digital marketing agency.
“What I find most useful is to treat YouTube ads as you would normal out-of-home ads on TV,” says Shah. “You have a shorter format, a compelling hook at the start, and you use all the targeting features (including banners and remarketing) to make the ad pop and become memorable.”
Not all YouTube ad campaigns are created equal, and each should grow from a clearly established marketing strategy. For example, before you can create effective YouTube ads, you must identify your target audience. If you want to reach different demographics, you will need to design specialized content for each. Among the top 100 advertisers who utilize YouTube, 56 of them have more than 10 channels, with each targeted on a specific sector.
To identify a target audience, create distinctions between factors like age, gender, location, level of education, and occupation. For example, let’s say you want to promote weight loss tips. If you search YouTube simply for weight loss, you’ll receive over 175 million results. That’s an ocean of competition, and your carefully crafted advertising will sink without a trace. If you search for “weight loss tips for women”, you suddenly narrow down the results to 23.8 million. If you further refine your search, you might end up with something like “weight loss tips for women over 60”. This brings the number of results down to a relatively lean 871,000.
This search process is one among many ways you can identify an audience through YouTube. You can also:
- Survey your present customers
- Divide the market according to income or education to identify profitable groups
- Imagine the customer most likely to purchase your product or services
- Research the volume of specialized keywords (low volume is best, as there is less competition)
One thing to keep in mind here, is the stage of the funnel you want your YouTube Ads to target. Many times YouTube acts as a Brand Awareness or Top of Funnel channel that needs to be measured using Brand KPIs. Impressions, CPM, CPC are all metrics to track when dealing with brand YouTube ad campaigns.
When your video ads are created as performance marketing, for a target audience that is more likely to convert, the focus is on the middle to bottom of the funnel. This is where a retargeting audience may be right for you. Site visitors, customer lists, or any variation of remarketing lists available to you can be highly effective with video marketing.
Pick the Right YouTube Ads
Once you’ve identified your target audience, you need to settle on which types of YouTube ad campaigns to run. You’ll also want to keep in mind the key difference between advertising on YouTube versus Facebook or Google. With YouTube, you only pay for an ad view if one of two things happens: a viewer passes the 30-second mark, or they watch the whole thing. YouTube Advertising costs can vary, depending on ad type, audience, and creative available.
There are multiple types of YouTube video ads for you to choose from. The most popular YouTube ad types are discussed below:
- Non-Skippable Video Ads: A viewer must watch these before they can access a YouTube video. Non-skippable YouTube ads can appear during, before, or after the primary video. Since the viewer has no choice but to watch the ad, you wind up paying every time it appears. Generally speaking, these types of ads are for companies with larger budgets.
- Skippable Video Ads: These ads allow the viewer to skip them after 5 seconds. Like non-skippable ads, they can appear before, after, or during the primary video. With these, you will only get charged if a viewer chooses to watch for at least 30 seconds.
- In-Feed Ads: These YouTube ads are placed to the right of the feature video, as part of a YouTube search results, or on the YouTube mobile homepage. Ideally, your ad will entice a click from the viewer, at which point you get charged for the advertising.
- Bumper Video Ads: Bumper ads are 6 seconds (or shorter) and play before, during, or after another video. Viewers don’t have the option to skip these ads to get to their youtube videos. Paying is based on Impressions using a Target CPM bid strategy.
Know Your Competition
Advertising on YouTube has a major element of competition. In order to make your efforts successful, you must familiarize yourself with your competitors. Locate a competing company’s channel or channels, and watch their YouTube ads yourself. Ask yourself how effective they are, and make note of successful tactics.
To understand a competitor’s broader YouTube strategy, you can create a spreadsheet that tracks their ads. The spreadsheet can have columns for the company’s name, a screenshot of the video, the product or service offered, the number of views, and the ad’s headline. With this information, you can identify not only the most successful ads, but also the elements that drive them.
YouTube Ads in Practice: Five Successful Campaigns
Creative is obviously a massive component of video advertising and truly a large component of any digital marketing for that matter. Over the years Tuff has developed, tested, and reiterated on countless video assets in order to connect the dots between creative and performance. The top YouTube marketing agencies keep this connection at the forefront of strategy, so we put together a Creative Guide that details all aspects of our philosophy around creative.
Below we will focus on some of our favorite video ads we worked on over the last few years.
YouTube Video Ads: Creative Backed by Performance Data
Video marketing is obviously a massive component of video advertising and truly a large component of any digital marketing for that matter. Over the years Tuff has developed, tested, and reiterated on countless video assets in order to connect the dots between creative and performance. The top YouTube marketing agencies keep this connection at the forefront of strategy, so we put together a Creative Guide that details all aspects of our philosophy around creative.
Below we will focus on some of our favorite video ads we worked on over the last few years.
Sometimes a simple voice over video is all you need to make an impact. When comparing the video ads that Tuff made for Teachable vs. the previous ads running, we were able to lower CPA by over 20% while targeting the same audience.
YouTube video ads cost can vary from video to video. Any positive movement for CPC or CPA goes a long way. Teachable is a platform where creatives can teach others their skills through coaching, courses, or video content. Their target audience is certainly active on YouTube, so perfecting creative is as important as ever.
For Memento, we set out to utilize the power of UGC, User Generated Content. Memento offers highly personal products, group videos and shared photo albums, so UGC made a lot of sense for us to highlight the emotional side of the product. Incorporating detailed animation alongside short clips from users was a truly effective way to improve engagement.
Click Thru Rate was 40% higher for this creative when put up against other assets targeting the same audience. Continuing to expand on what works is key to successful YouTube ads.
TAC allocates a large percentage of its Google Ads budget to YouTube advertising. If you want to learn to play the guitar, Tony’s Acoustic Challenge is the place for you. The YouTube videos we created for their digital marketing strategy are a mix of animation and filmed video content. Add a lovely voiceover from our Creative Strategist, Adam, and you have something special on your hands.
Compared to old creative, we saw as high as a 36% increase in Click Thru Rate. All other factors being equal, a shift of that magnitude really speaks for the impact creative can have on KPIs.
YouTube Ad Examples: Eight Successful Campaigns from Brands You Love
Need more examples of YouTube video ads? We have just that for you here.
If you want to be the best, you have to study the best. A consideration of other campaigns is indispensable for someone who wants their own YouTube ads to succeed. Each of the five companies considered below achieved a great deal of success through their efforts on YouTube. Click through to the YouTube videos, then read our analysis of how they work.
It seems to be almost impossible to go a day watching YouTube videos without seeing at least one ad for Grammarly (at least if you have most likely been added to the Sales & Marketing affinity audience by Google).
Grammarly knows its audience well, and knows how to create effective, engaging video ads that will stay top of mind, as well as how to ensure they are hitting users with enough frequency to be memorable.
The screenshot above is from a recent Grammarly ad in 2023 that features the new citation product feature. In addition to showing how the feature works and discussing its benefits, Grammarly has cleverly weaved in social proof by highlighting quotes from real users who have benefited from the tool already.
Most well known for its incredible brand awareness reach from advertising consistently and relentlessly on the world’s most popular podcasts, Athletic Greens has also been putting its focus on YouTube, leveraging in-stream ads to continue to drive awareness of its products to its target audience.
The ad above is a short, 00:12 in-stream ad showcasing the benefits of its AG1 product with a simple Shop Now call to action button. The ad is short, but contains a very simple, clear, and effective marketing message.
Athletic Greens has put its marketing focus strongly on brand awareness channels, so utilizing YouTube Ads is a no-brainer for this company.
Wix is operating in the highly competitive website builder and web hosting space, and therefore needs to ensure that it is constantly focusing on product benefits that surpass those of its competitors.
In this ad, Wix focuses on product features that help its users rank their websites via SEO strategies with the tools that are provided with the web builder.
What stands out about this ad is how focused the entire message was on the product feature benefits. Not only are the features and benefits discussed, but they are shown with clever animations that let the viewer see exactly what they can expect from the product. This type of demonstration is crucial for explaining complex topics, and leveraging animations is a helpful way to show the feature while keeping the viewer entertained.
GoPro became a household name thanks to videos of the camera’s use in extreme sports. The above ad is completely different, however. Instead of the first-person view of a mountain biker flying down a trail, or a skydiver hurling themselves from a plane, it features a firefighter saving a kitten. The overall feel is sweet and cuddly, rather than action-packed and dangerous. You might wonder why GoPro would create marketing materials at odds with their image. Simply put: it makes them appealing to a wider audience.
When you make your own YouTube ads, don’t shy away from pushing the boundaries of your image. If you vary your format and topics, you can find different ways to showcase your brand’s theme to appeal to a larger audience.
Skullcandy is not messing around when it comes to YouTube ads. You’ll notice that they maintain a consistent voice, and do a good job of targeting sports demographics like skateboarders, surfers, and snowboarders. They accomplish this through high-energy videos that appeal to young people. Skullcandy also has a variety of content, from customer reviews and product demonstrations, to a concert series and podcast.
Skullcandy’s YouTube ads foster a sense of community among its customers. If you can do the same, you will develop long-term customers that have a sense of loyalty to your brand.
Artifact Uprising helps customers put together custom photo books, cards, and albums, and also prints photos. The nature of their product encourages sentimentality and emotional connection, characteristics which the company highlights in its YouTube ads.
Regardless of your type of industry, you can use this approach to forge an emotional connection with customers. Learn how people use your services or products to enhance their lives, and share these stories in your ads.
This non-profit promotes greater access to computer science instruction in schools. The ad serves as an example of influencer marketing, in which recognizable people create a bond with the viewer through the product. As Bill Gates describes his humble beginnings, the message is clear: if you help Code.org with its mission, more people can succeed like he did.
If you work in an intimidating field like computer science, influencer marketing can humanize your message. Put a face to your company that viewers can either recognize or sympathize with, and you can lower the barrier of entry to your services.
Sun Bum has clearly fostered a laid-back, chilled out aesthetic. Its YouTube ads not only highlight the company’s hair care products, sunscreen, and lip balm, but also contain engaging content that has fostered a fanbase. Through multiple videos a week, the company covers a broad range of topics that includes everything from office life vignettes to dyeing tutorials. They also have a channel devoted to musical performances. This allows them to link their brand to appealing musicians as a way to connect with customers.
YouTube offers a platform to place your ads before millions of people. If you can target your audience, settle on an ad type, and create compelling content, you can count on enhanced business. Of course, ads on YouTube require work, as you must keep your content fresh. If done correctly, however, the money and time you put into YouTube ads can represent the best investment you’ll ever make.