Let’s start strong.
This bit of information should keep you glued to the screen reading this post from top to bottom.
In the last 2 years, people have watched content on YouTube related to product reviews for the equivalent of 50,000 YEARS (source).
Indeed, 50,000 years.
What we mean is that before your potential customers make a purchase, they watch YouTube videos.
Another piece of information:
More than half of the Latin Americans go to YouTube before they buy (source).
As you can see, YouTube is no longer just an option – it’s a must. And that’s why today we are going to explain, in depth, the different ads that can be created on YouTube and how they work.
Pay attention because this is an important one.
What is YouTube Ads and why you should use it for your e-commerce
According to the definition:
YouTube Ads is an advertising tool provided by YouTube that allows you to add marketing videos before, after, or while users watch a video.
That’s crystal clear, but the question is… is investing your money in YouTube Ads worth it?
It sure is.
The truth is that YouTube is the second-most searched platform (after Google). If your audience is relatively young (between 14 and 16), being on YouTube is compulsory.
On top of that, there are these two interesting statistics (and don’t forget what we’ve already mentioned before):
- There is 84% more chance of paying visual attention to a YouTube video than to a TV commercial. According to Ipsos, TV only has a 43% rate.
- Attention paid to YouTube is 1.8 higher than that of other social networks: this is the conclusion reached by the “Impact of Attention” study carried out by Nielsen.
Now are you convinced?
Great! Then, let’s see what advertising options you have. 😉
What ads YouTube offers are and how much they cost
There are 4 types of videos/ads on YouTube, each of which being more or less appropriate depending on your campaign’s goal.
1️⃣ TrueView Ads
These are the most common ads because their most relevant characteristic is that you only pay when users:
- Watch the ad for 30 seconds.
- Watch the whole ad (if it’s shorter than 30 seconds).
- Click on the ad.
That’s to say, YouTube only charges you if users are truly interested in the video. Within this type of ads, there are 2 types depending on the user-video interaction:
A. In-stream TrueView ads (skippable)
These are the most common.
Ads play before or during another video. Viewers watch five seconds of your video and then have the option to keep watching or to skip it.
They can appear with any other YouTube video or on any other website belonging to the Google Display Network.
What’s the price of these ads?
If the conditions mentioned before aren’t met, you don’t pay a dime. If there’s interaction, you pay according to the CPV (cost per view).
YouTube works like AdWords – it’s an advertising system based on bets. Among all the competitors, showing your ad in the first place is auctioned
In order to do so, you need to add your maximum CPV.
That’s to say, the maximum amount of money that you are willing to pay for each person who watches your ad.
For example, if you calculate that the fair cost per user is €0.30, that’s your CPV. So, you’ll pay, at most, that amount each time the ad is viewed in full (or the first 30 seconds).
If everyone else established their maximum CPV at €0.20, you win and you’ll only pay €0.21. That’s what we call real CPV.
If you want to learn more about this system, read this post.
TRICK: Make sure that you show what you want to advertise in the first 5 seconds of the video so users will see it even if they skip the ad (and you don’t pay for that impact).
B. Video Discovery Ad (formerly TrueView in Display)
These are similar to the sponsored searches by Google. They are the videos suggested by YouTube in miniature form shown:
- As videos related to the one the user is watching.
- In the results when a user searches on YouTube.
- On the main screen of YouTube mobile.
Have a look at this example (highlighted in red):
The price of this ad depends on whether users click on it and open it on YouTube.
If they do so, you’ll pay your maximum CPV.
2️⃣ Non-skippable In-Stream TrueView Ads
These video/ads last for 15 seconds and can’t be skipped.
In this case, they price is calculated by CPM (cost per mille), that’s to say, you need to calculate your budget knowing that you’ll pay each time your ad is viewed 1,000 times. These ads can be shown in:
- Any YouTube video.
- Apps from Google Display Network partners.
- Google Maps and Google Shopping.
This is the format you should choose if you’re aiming to strengthen your brand image.
3️⃣ Bumper Ads
These are similar to the previous option because you can’t skip them and they’re also paid by CPM – but they only last 6 seconds.
The goal is to transmit a short and concise message to a huge number of clients.
Use these if you want to reach a wide audience, but remember to be careful when choosing the message that you want to transmit in those 6 seconds.
Think it’s impossible? Have a look at these bumpers.
It’s the perfect format to create expectations before you launch a new product (or film) or to do remarketing after some other type of campaign.
4️⃣ Out-stream Ads
These videos/ads are only played on mobile phones or tablets, and they are shown on websites and the Google Display Network. They are muted when the video starts and users decide if they want to activate the sound (and interact with the ad) or skip it.
The price is established by vCPM, which means the cost per thousand visible impressions.
For ads to be considered visible, they need to take up 50% of the screen for at least 2 seconds.
NOTE: if you want more information about different types of ads, here you have a detailed explanation.
How to keep YouTube Ads prices under control
Google Ads offers the possibility of limiting your expenses to curb your advertising investment.
You need to properly understand each option because you can’t modify the budget that you chose once your campaign has been created.
You can choose between:
1️⃣ Establish an average daily budget
This means setting an average daily expense with a monthly limit.
Since it’s an average budget, you may end up paying more some days and less others, but in the end, you won’t pay more than what you established as your monthly limit.
2️⃣ Set a total budget for the campaign
This option is only available for campaigns with a start and end date.
Google Ads allocates your total budget to optimize your campaign visibility. When it finishes, you’re only charged the amount you established, even if the campaign got more impressions due to that optimization.
How to create a campaign on YouTube step by step
Now that you know the types of ads that exist on the platform, we’re going to remind you how to create a YouTube Ads campaign.
Indeed, you read correctly: remind you.
YouTube belongs to Google, so campaigns are managed through Google AdWords.
Following this link you can read our guide on Google AdWords for e-commerce.
Review it first and then we’ll get started with YouTube.
✅ What you should take into account when the ads are specific to YouTube
Though the majority is the same as with Google Ads, here we’re creating a very specific type of ad with its own special requirements:
- Of course, you need to have an active Google AdWords account.
- You also need a YouTube channel where you can upload the videos that you’ll use as ads.
- In Google AdWords, you need to create ads choosing video campaigns.
- The ad format and payment method depend on your campaign goal.
- Ads can’t include text, images, or any other format of video ads.
- Each campaign can only include one type of ad from those that we’ve looked at (despite having multiple ads within in one campaign).
Apart from that, the campaign is managed in the same way as any other Google AdWords campaign.
✅ Ready to jump into advertising on YouTube?
With everything we’ve just explained in this post, you have all the necessary information to become a YouTuber with your e-commerce.
Recording a video these days is easier than ever (if you have doubts, you can read this tutorial where we explain how to do it).
The only secret is time and consistency.
Give it a few weeks and you’ll be seeing results soon enough! 😉