So, let’s start with why YouTube advertising is a topic worth some attention. Did you know that YouTube currently resides as the world’s second largest search engine, right behind (you guessed it) Google? It holds more than 1 billion active users (almost 1/3rd of all Internet users), over 30 million daily visitors, and a whopping 1 billion hours of video consumed per day. It also has 80% of all 18 to 49 year olds using it to learn or be entertained.
Unless you’re living under a rock, you probably know mobile has been on the rise. YouTube, on mobile devices alone, reaches more 18 to 49 year olds compared to cable networks in the U.S. In fact, more than half of YouTube views occur on mobile devices.
But did you know that 96% of consumers surveyed found videos helpful for making online purchase decisions? That’s really what you care about — can you make money with YouTube?
Sight, sound, and motion elicit an emotional and physical involvement with content among users that isn’t available on all platforms. And YouTube ads help you connect with potential customers in a unique and memorable way, because you’re engaging users already tapping into all these senses.
YouTube’s unique combination of video access, sharing, and community creates an ample opportunity for audience engagement — but more importantly, provide a gateway to conversions.
History of YouTube Ads
The YouTube ads development effort really started in August of 2006 when YouTube’s first ad concepts were launched: Participatory Video Ads and Brand Channels. One of the first major advertisers was Cingular with an underground music contest the next month.
In late 2007, YouTube launched InVideo Ads (overlays) and the YouTube Partner Program, followed by several developments in 2008 to include: YouTube Insight (analytics tool), Click-To-Buy e-commerce platform, Promoted Videos, and Pre-Roll Ads.
In 2009, the DoubleClick acquisition had closed, enabling Google to leverage DoubleClick. In the beginning of 2009, Homepage Ads expanded from 1 to 7 formats. Then, later in the year, YouTube launched Individual Video Partnerships and Video Targeting as well as enabled Skippable Pre-Roll Tests.
In March 2010, YouTube launched mobile ads.
Since then, YouTube has been really focused on integrating YouTube with Google’s display business, so advertisers have more control over where ads are shown and build scalable campaigns that span both Google Content Network and YouTube.
It’s been a pretty upward climb in monetization efforts.
YouTube Ad Platform Stats
On the YouTube ad platform, specifically, here are some stats that justify its worth:
- YouTube’s mobile revenue is up to 2x year over year.
- YouTube generates 6% of Google’s ad sales revenue.
- YouTube Partners revenue is up 50% year over year for the last 3 years, with the highest paid partner (PewDiePie) earning an annual income reaching $12 million for 2015.
- The number of channels earning 6 figures per year on YouTube is up 50% year over year.
- The number of advertisers running video ads on YouTube is up more than 40% year over year — and for YouTube’s top advertisers, the average spend per advertiser is up over 60% year over year.
- Viewers who complete TrueView ads—watched to completion or at least 30 seconds—were 23 times more likely to visit or subscribe to a brand channel, watch more by that brand, or share the brand video.
- Viewers who are exposed to TrueView ads, but who don’t watch to completion, are still 10 times more likely to take one of those actions.
- When brands use TrueView, they see views of previously existing content increase by up to 500% after posting new videos.
So, even though the ad space is getting more competitive, the growth speaks to the success some brands have found on the platform.
If you’re seeing potential value in utilizing YouTube ads for your brand or business, let’s get to a step-by-step walkthrough of ad creation, so you can be set up for success.
When you’re ready to get started with your first YouTube advertising campaign, click the add campaign drop down.
Campaign & Network Types
Now, let’s go over different campaign and network types.
There are three options for the different types of YouTube advertising campaigns:
- Standard: This is for non-ecommerce, non app-install advertisers (aka most YouTube advertisers, and most likely, you).
- Mobile App Installs: This is for promoting an app and generating installs for it.
- Shopping: This is for if you’re in ecommerce and want to promote your products (more on ecommerce YouTube advertising in the next section).
You also have a few network delivery options as well:
- YouTube Search: This is for when you want your ads to show up within YouTube’s search results.
- YouTube Videos: This is for if you only want your ads to be viewed while videos are playing.
- Video Partners on the Display Network: In order to use this, you have to select the “YouTube Videos” option, allowing you to show your video ads on YouTube videos, outside of YouTube.com on the regular AdWords Display Network (like display ads, with video).
To start, I recommend selecting both “YouTube Search” and “YouTube Videos”, as we’ve found that they carry the higher customer conversion intent compared to the Video Partners on Display. The reason for this is because you have less control over where your ad shows within the Video Partners and Display Network. Therefore, you have less control over the quality of traffic.
Video Ad Formats
There are six video ad formats to choose from on YouTube:
- True View: These are the ads that dominate YouTube advertising the most, and they come in two forms:
- In-Stream Ads: These ads are viewed before, during, or after a YouTube video has played. They play either on YouTube.com itself or on other sites / apps through Google Partners.
In-stream ads are the type which you can skip after the first 5 seconds of play time. If they get skipped within the first 30 seconds, with no interaction, you don’t pay a dime. So, hypothetically, you can keep on building brand awareness for free, but we’re after conversions $$$.
Note: The “ultimate goal” is to have users engaged by your ad enough to click through and become a customer, so watching the ad all the way through doesn’t even matter.
This is an excellent example from Burger King, of using video preroll time to grab users attention, despite having skippable ad content.
- Video Discovery Ads: These ads can appear in multiple places across the YouTube, and the web via partner sites and mobile apps. They can display as a clickable thumbnail of the actual video ad in the YouTube search results, next to related videos, on YouTube’s home page, and finally partner sites and apps.
The discovery video ads are paired with a small yellow “Ad” box as seen below:
- Bumper Ads: These ads are the short 6-second video clips that viewers cannot skip. You can find this ad format in the options when you create a new ad group. They are short, sweet, and to the point.
The above is a hilarious example from Old Spice.
- Non-Skippable Ads: This ad types consists of ads that are 15 or 20 seconds long and are not allowed to be skipped, so they’re always watched in their entirety.
Google rumored that they’re discontinuing non-skippable ads by the end of last year, but they could always resurface.
The snag with these is that they require a minimum dollar investment to run. They aren’t exactly self-serving like other YouTube ad formats, which is why you won’t see smaller brands/advertisers using these. Last time we checked, its a minumum of $30k to run em’.
Here’s an example:
This is a great YouTube ad that’s so funny you should forget you’re watching an ad.
- Display Ads: Now, remember, we don’t have to use video ads to advertise on YouTube. We can use text ads and regular display image ads as well (with pixel dimensions: 300×250 and 300×60).
If you want to target specific videos, or channels within YouTube, you can use their URL as placement targeting for this ad format where they would show to the right of a video our potential customer is watching.
It is important to note 2 things here:
- This is a cheaper format to advertise compared to a skippable in-stream ad.
- These ads only appear on desktop / laptops (that means no mobile).
- Overlay Ads: These are another variant of display ad, but their location appears directly “over” the video being viewed. Below, you’ll see examples of a horizontal ad above a video and the square display off to the right.
The pixel dimensions for this type of ad are 468×60 or 728×90, and can also be a regular text ad.
- Sponsored Cards: This ad variant kicks ass for ecommerce advertisers who want to showcase products that are seen in the video…Right alongside the actual video itself.
Take a look at the example below:
To create YouTube cards, enter your Creator Studio > Video Manager > Edit Dropdown of Video.
Below you’ll see your options for card creation:
I recommend using the link feature to send traffic to campaign landing pages, as our ultimate goal is to get conversions.
Add-Ons to Ad Formats
There are two add-ons: Companion Banners and Call-to-Action Overlays, which run alongside ads.
- Companion Banners: These ads are optional. They aren’t solo running ads, as they must follow alongside a video ad. Their benefit is that they increase the overall clickable real estate on screen.
If you select your own media, stay at 300×60 pixels and a maximum file size of 150 kb. If you choose to use these and do not have your own content, Google will automatically create some based around the visuals of your video ad.
- Call-to-Action Overlay: CTA overlays allow you to pair text and visuals (74×74) alongside your video ad. These are crucial for taking full advantage of your YouTube ad.
To add a CTA overlay to your video ad, follow the steps below:
Video Ad Targeting
YouTube ad targeting works much like the Display Network, with a few key differences.
Demographics. You can choose age, gender, household incomes or parental statuses of your audience. Be warned though, just like Search and Display, many of YouTube’s users are considered “unknown” for these segments.
Affinity Audiences. These are essentially the same for YouTube as they are for the Display Network. This is where you can target users based on the videos they watch and the websites they browse. Within this segment you have:
- In-Market Audiences: According to Google, these are the users who are in the “researching phase” of their purchase cycle.
- Custom Affinity Audiences: Where you can create your own audiences by layering different interests/domains.
Keywords. This targeting allows you to choose your targeting based on specific keyword phrases that you select. Your YouTube ad will then be placed with content on videos, channels and websites related to your selections.
My advice is to layer your targeting together to make the perfect audience. Think wisely; otherwise, you run the risk of throwing money down the drain with enormously large, untargeted/unrelated traffic that will not convert.
Placements. Rather than target specific websites, now target individual YouTube videos or channels of your choosing. Keep in mind, these users / channels must be opted in to having ads display with their content.
Perhaps, you want to target an audience that’s obsessed with Football, or more specifically, the Denver Broncos.
You could target that segment with:
An individual video (NFL: Top 10 Broncos Highlight)
The NFL Official Channel
Remarketing. This works exactly like on the Display Network, but with YouTube ads instead. I certainly recommend extending your bottom of funnel (BOFU) reach with a strategic video remarketing approach.
Topics. This is for targeting your audience based on specific topics (e.g. cooking, home decor, investing, etc.).
Video Ad Creation
The world is your oyster when it comes to actually creating video ads themselves.
You’ll want to start by thinking of the type of content you want to create for your offer. I’ll list some examples below to get you started:
Do customers love your product? Of course, they do. Are you making your clients happy? You betcha’.
Well, then, ask them to participate in a video interview on why your product puts a smile on their face. How to get them to say “yes”? Plan the process beforehand, with a pre written script, and of course, foot the bill to ensure your happy customer that there’s minimal effort required on their end.
Features and Benefits
An obvious approach for a video ad (or any ad for that matter) is to focus the various features / benefits your product or service has to offer. For instance, if your product is valued because of its durability, plan to show it in action so viewers can “see it to believe it”.
Sometimes a simple explanation is all that’s needed to entice a consumer into purchase. How-to videos are a great opportunity to capture those with high intent to interact with your offer. By offering useful knowledge to an engaged audience, you’ll develop a positive reputation as well as the trust of your network.
Video Content Creation
After thinking of some ideas for your video ad content, the next thing to tackle is the execution of the video itself. It may sound daunting, but I’ll help you get started with some examples from affordable to most expensive.
But, don’t forget that all of these could be done on either end of that scale, depending on what you are trying to accomplish.
Mobile Text Thread
Telling a story can be a simple as a text conversation. A resourceful and cost effective strategy is using mobile text recording to tell the story of your product / service.
Hooked.co is an app that tells short stories through fictional mobile text conversations. They offer a paid subscription to access their content without a waiting period. They saw rapid success marketing on YouTube using cliffhangers like this:
If you haven’t noticed, these videos have blown up in popularity over the past few years. They’re popular now, because so many business owners wanted a nifty explainer video like this:
This is a great example from Yum Yum Videos, which also highlights on Explainer Video types.
This type of video can be simple and low-budget or extravagant and expensive, depending on what type of visuals content or materials you use.
Stop motion videos are typically a combination of photographs, which are cut together to create the illusion of fluid movement.
Real Life Video Shoot
The last (and probably most expensive) type of video would be a real live video shoot. This strategy would be more geared towards brands who also participate in traditional TV advertising.
Here’s an excellent ad from Dollar Shave Club that could be combined with TV advertising on YouTube to pack a 1-2 punch for larger media campaigns.
Tool & Services
So, now that we have an idea of the content and style of our video, the next step is to bring it all to fruition. These are the tools and services that will help to ensure you get the best bang for your buck (ROI-wise, that is).
Shakr: Shakr.com is a video ad builder with over 1,000 templates at available across a variety of industries. Using their drag and drop editor, it’s simple and quick to splice your own media together into a video ad; especially helpful for A/B testing video ads, since the process can be so fast compared to traditional video media creation.
The above is an example of a niche video ad made with Shakr.
Check out their robust bank of video ad templates here.
Fiverr: Fiverr.com is the world’s largest online freelance service marketplace, especially for the creative space. You can certainly find some affordable assistance in making your first video ad here.
YouTube Director App: The YouTube Director App is a mobile app created by Google, which also uses video templates to help you build video ads.
Check out an example of an ad made with the Director App here:
YouTube Director Onsite: YouTube Director Onsite is a new initiative by Google for YouTube video ad creation. The process involves sending a real life filmmaker to shoot, edit and deliver a video ad for your business.
Since this service seems almost too good to be true, you know there’s a catch…
At the moment, the service is only available in 7 U.S. cities.
Additionally, you must dedicate at least $150 directly to your YouTube advertising campaign in order to unlock the service.
The above is an example of a YouTube video ad created through the Director Onsite program.
Ultimately, $150 pledged to advertise doesn’t seem so steep, for a free car commercial.
For more information on YouTube Director Onsite, check out the in depth FAQ page here.
Animation / Production Studios: If you have a large budget and want a team of pros to do all of the heavy lifting for you, you can always reach out to animation / production studios.
More times than not, users will be viewing your video ads on the move, without any volume. You’ll want to make sure your video ad has been accurately subtitled, so that way you don’t miss out on these crucial views. It’s easy to add your own within your YouTube account.
Click Your Profile Picture (upper righthand corner) > Creator Studio > Video Manager > Videos.
Then, go to the video of your choice, click the drop down menu and select “Subtitles/CC”. For more detailed information follow this guide.
Building the Ultimate Video Warchest: The more creative content available when you start, the more ammo you’ll have to unload when it comes to testing. For instance, see if you can repurpose a larger piece of content (such as a 45 second in-stream ad) into smaller 6-second clips to be used for bumper ads.
The last thing you want is to blow your entire budget on one costly video that doesn’t work and can’t be used or easily edited for a pivot. And always remember that any advertising channel can work with the right combination of audience, content and offer.
Video Ad Bidding
By default, you’ll set up with Google’s CPV (cost per view) bidding for your YouTube campaign. With this bidding strategy, you’re charged for both views / interactions with your video or associated advertisements.
Luckily, a “view” is only counted after a viewer watches at least 30 seconds of your video (or the whole video, if your clip is less than 30 seconds).
Also, note there’s an option to bid adjust for “popular videos”. This could be useful for advertisers who want to ride the wave of viral videos to get their ads displaying in front of YouTube’s most popular content.
Luckily, setting up conversion tracking for YouTube is exactly the same for Google Ads. So, if you already have an account set up with your conversion tracking and Google Analytics in place, then you are already good to go.
If not, be sure to follow these instructions from Google.
YouTube also boasts some some cool features for breaking down analytics, as well as some extra metrics.
Examples of YouTube Advertising Success
There’s one considerable reason why most marketers aren’t taking advantage of YouTube advertising. That’s because video ad media is one of the most expensive types of ads to create, not to mention, split test.
The offer for this is in the investment space, so by using video content, we’re able to better explain the offer in full, compared to a display image.
Text ads can be created in seconds, image ads in minutes–but a successful YouTube ad may require actors, scripts, storyboards, animations, sets, edits, etc. With that in mind, it’s clear to see that there’s a cost of entry for YouTube advertising, but also major untapped potential in terms of brand narrative and direct response.
At the recent YouTube Partners Academy in L.A., I met with Logan Welbaum, Marketing Program Manager at Google. He shared a plethora of YouTube advertising knowledge and provided a few tips in regards to the challenge those can face when creating YouTube ads. According to Logan, it comes down to “creating a shareable video that grows organically.”
Logan recommends the following:
- Rather than making your own trend or viral video, try to ride the wave of an existing trends or topic with high engagement.
- Create content that the audience is interested in, that also aligns with the brand.
- For small brands, just creating video content can be hard, so try the YouTube Director On Site or YouTube Director App
- Show success through video. Video can be great for attracting a new audience to your brand. But for your first step, start with showing your video to people who already know your brand with YouTube remarketing. Make sure you add a call to action overlay or link up your Google shopping feed to get more action, clicks, and conversions.
Lastly, I asking him his favorite examples of a successful YouTube advertising video/campaign. Logan said, “Bumper ads, because you can do a lot with these little guys.”
Above is his favorite example from Tide.
Success Story #1
One great YouTube advertising success story comes from Lime-A-Rita’s effective use of hyper relevant ads.
By using this method, Lime-A-Rita honed in on a specific audience of theirs, consisting of music loving women.
Lime-A-Rita used bumper ads targeted to this audience, with specific placements on the latest Rihanna music videos, along with other pop hits. With this tactic, they were able to drive double-digit purchase consideration lift.
Success Story #2
Next, we’ll look at how Duracell created one of the most successful YouTube bumper ads.
By breaking their campaign down from these 3 perspectives, Duracell was able to formulate a YouTube advertising approach, which was successful on multiple fronts.
First, they used creative elements unique to their own brand to further establish the trust and recognition that most consumers have with Duracell Batteries. They followed the use of brand perspective, with a creative approach that truly made the content product focused.
With only 6 seconds available in a bumper ad, focusing on your product / offer is a must.
Lastly, Duracell was swift to test and optimize towards their campaign goals. Using this bumper ad, they remarketed the viewers of an equity-building 30 second video ad. They did this to reinforce brand recognition with quick “hard-hitting” content to keep the Duracell brand on consumer radars and increase purchase intent.
Success Story #3
Remember that Burger King ad I mentioned earlier? Well, that particular video is part of a genius series of 64 pre-roll ads, which are all similar. They used YouTube video placements to match specific dialogue in their ad to 64 different popular videos in order to really grab user attention.
Rather than try to be another advertisement, Burger King diversified by taking a funny and unique approach to their YouTube video ad content.
You can see other YouTube advertising trends, case studies and success stories here and here.
Best Practices for YouTube Advertising
But how did these brands find success on YouTube?
Let’s take a peek at the most important things regarding the content and media of your 1st YouTube ad. The end all be all, when it comes to content, quality is king.
Here are some other considerations:
- Focus on direct response, not branding awareness. Our goal with YouTube ads is to boost ROI through conversions, not throw money for “brand awareness”. To start, you may not see many conversions coming from the bottom of the funnel, unless you’re remarketing or using a custom audience. I’d recommend developing two strategies, one for honing in on top/mid funnel conversions and another for monetizing your past visitors/viewers with remarketing.
Hopefully, you’ve been curating your remarketing lists. Simply select the one you’d like to target and add a video.
- Lower the threat of your offer. Your end goal is to make mula, but think about how many steps and actions must occur before a potential customer takes out their credit card. Think of breaking down the path to conversion into smaller, easier steps. Use your video ads to answer customer questions or curiosities.
Most of the time, you won’t score a customer or sale with the first glance, so develop a strategy for nurturing users through the conversion funnel. Don’t be afraid, customers won’t bite.
- Make the magic happen within the first 5 seconds. Keep in mind that our goal is not to garnish free views, it’s for people to be interested enough to convert on our offers. If you see that many people are skipping your ad, or the play time is short, consider taking a look at the opening of your YouTube ad.
To be honest, the length of videos doesn’t matter. It’s your content that does 😉 So, remember to dial in on provoking the purchase, rather than broad brand awareness. Bring your viewer through a journey and make your content count.
Wrap Up on YouTube Advertising
There’s no question that YouTube holds serious potential to both brands and advertisers. The potential for success is real and there is no question that YouTube ads can generate the big bucks.
Whether you’re looking to drive sales or brand awareness, YouTube packs a punch that could quickly scale your online sales.
Remember to have a unique approach, and keep your viewers in mind when developing your message.
Do you know who your YouTube audience is?
Will they find your offer interesting enough within the first 5 seconds to keep watching?
These are the crucial challenges that you will face when finding success with YouTube ads.
Let us know the success (or struggles) you’ve had with YouTube advertising in the comments below. Also, don’t be afraid to reach out with questions. I don’t bite 😉 (email@example.com)