How Much do YouTube Ads Cost?

Overview

If you read my last article on why you should be advertising on youtube you already know that YouTube ads are a great way to target your perfect audience. So how much do YouTube ads cost and how much should you budget?

The immediate answer is “it depends”, but a less frustrating answer would be, “far less than you probably think”. By the end of this article you’ll be able to confidently set budgets for your YouTube advertising campaign and keep your costs under control.

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Start with ROI in Mind

Getting a ton of cheap views is meaningless if none of them turn into a sale. Unless you find yourself in some kind of “Who can get the most views the cheapest competition”, you’re going to want to show a return on your advertising investment.

Generally speaking, the more granular your target is the more you can expect to pay. We’ll talk about video targeting in more detail later, but first an example.

Let’s say you sell these cool posters of all the different Chicago neighborhoods:

Map of Chicago Neighborhoods

Let’s also say you made a video showcasing how cool these prints look in different rooms with different decor. You could target your video to the entire world and get a massive amount of views on your video for pennies per view. OR you could target your video to people who live in the city limits of Chicago and pay a slightly higher cost per view. Which option do you think would have the best chance of selling a poster?

If you said global targeting you’re clearly not paying attention.

If you said local targeting, you get it. I like you and you may keep reading.

How YouTube Prices Ads

As you may have gathered from the last section YouTube ads are priced on a cost per view (CPV) basis. The average cost per view can range from $.10 – $.30, and the views you get from your ad campaign are added to your video’s public view count (how cool is that?).

Your cost per view will change based on a number of factors including your targeting, your max CPV, competition, and ad quality. It may sound like a total guessing game, but Google Ads provides helpful estimates as you select your targets.

What is a Max CPV?

A max CPV is the maximum you’re willing to pay per video view. So, if you set your max CPV to $.20 you would never pay any more than $.20 per view. Remember though that YouTube ads are auction based, so ads with the highest bid will get higher placement and be served more often.

Setting your max CPV too low in a competitive market means your video won’t get any views or maybe a slow trickle of viewers from the bottom of the barrel.

For my clients, I like to use Google Ad’s estimates as a starting point and pad those numbers a little bit at the start of a campaign. I’d rather pay a little more per view for the highest quality viewers to give my video the best shot at a high quality score.

Setting a campaign budget

As with any online ads there is no limit to how much money you can spend. Thankfully with YouTube ads you can set a limit in the form of an average daily budget.

Average daily budgets are set up at the campaign level along with your campaign start and end dates. So let’s say we have $500 we’d like to spend in one month. I’d set my campaign start and end dates so that our campaign would be live for 30 days and set my average daily budget to $16 ($500 divided by 30).

Now if you did the math yourself you’re probably thinking, “doesn’t $500 divided by 30 days equal $16.66”? You are correct, but here’s why I usually round down.

On any given day it is possible to go slightly over or under your daily budget. It’s kind of like operating a gas pump. Have you ever tried to stop a gas pump at exactly $20? You’ll hit it on the nose some of the time, but the majority of the time you’ll stop it at $19.94 or $20.02. That’s where the “average” of average daily budget comes into play.

Adwords will do its best to hit your average daily budget over the course of your campaign, but your actual daily spend will fluctuate slightly from day to day. That’s why I round down my average daily budget so I don’t go over the amount I want to spend.

You don’t have to spend hundreds of thousands of dollars to have a successful YouTube ad campaign. In fact you can set up some very effective video ad campaigns for only $10 a day.

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