YouTube Trends: VR & AR Advertising

If you’ve seen Ready Player One, then you’re probably anticipating the complete takeover of virtual and augmented reality technology.

Although we’re a long ways away from the 24/7 use of this technology, VR and AR media consumption is becoming a popular outlet. We’re here to break down the current state of VR and AR video advertising.

Rise of VR and AR

The user rate for both virtual and augmented reality will continue to grow over the next few years. Check out this stat from eMarketer and IAB:

According to eMarketer, there will be 36.9 million users of VR in 2018. That number is expected to increase 70 percent in two short years. AR will have 51.2 million users in 2018 with an expected increase of 32 percent by 2020.”

As the user rate grows, more companies will explore their VR and AR advertising options. YouTube announced last month that they are bringing YouTube VR to Samsung Gear, making them the go-to video platform across multiple platforms. YouTube VR is already available on Daydream View, HTC Vive, and Playstation VR.

Current Challenges

Despite VR and AR growing as a lucrative advertising space, there are a few restraints caused by the current technology that advertisers must overcome.

  • Cost of consumer entry: Today, the cheapest headset costs around $300. The cost of hardware will eventually decrease, but for now advertisers have to wait until the average consumer can get an affordable headset to reach the full potential of VR/AR advertising.
  • Difficulty of measuring success: Right now there isn’t standardized reporting for VR/AR advertising success. Since VR/AR is a new way of consuming media, it will take the industry some time to establish key metrics.

Video Advertising Tests

Tests are currently being done to find the best way of utilizing video advertising for VR and AR devices.

  • Video Cube: Google is testing a ‘video cube’ feature for their virtual reality apps. When you look at the cube for a few seconds, a video player opens and plays your ad.
  • 360-degree VR ads: 5-10 second video ads are being tested during video content. These ads garner a viewability of 100%, since they take up the users’ entire surroundings.

Future of VR/AR Advertising

As the popularity of VR hardware and AR applications continues to rise, so will innovative ways to advertise with this technology. Here are a few ways advertising can embrace VR/AR based on current advertising possibilities:

  • Location extensions: Today, ads for brick-and-mortar stores will show you the address of their closest location. Retail companies are already leveraging VR/AR technology for purchasing products and services by showing consumers what the finished result will look like. In the future, don’t be surprised if location extensions will direct you to the closest retail location when you’re trying on new clothes in a virtual dressing room.
  • Headset targeting: Not sure if you want to buy a piece of furniture you’re looking at online? What if a 3D model presented itself to you the next time you put on your VR headset? Just like how cookies are currently used now to follow consumers along their purchase journey online, don’t be surprised if the future of VR/AR advertising includes tracking a customer’s journey in virtual reality.

The possibilities of advertising for virtual and augmented reality is endless, and pretty soon every advertiser will be thinking of new ways to reach this new audience.

Tell Me More: Custom Intent Audiences

Our Tell Me More series are designed to break down ad formats and products into bitesize chunks. There’s a growing universe of strategies and tactics and it’s our goal to make that universe a little more comprehensible.

First out the gate, Custom Intent Audiences.


Custom intent audiences is a feature in Google Ads that allows you to target specific users on YouTube based on their Google searches. Use custom intent audiences to target YouTube users that are actively researching products, services, and keywords related to your brand on Google Search.

Furthermore, you can easily create your custom intent audience by choosing from two different audience types:

  • Custom built: Fully customize your targeted audience with keywords, phrases, and URLs that your specific audience is researching.
  • Auto-created: Rely on Google’s advanced machine learning to curate an audience list based on analysis of your account and industry.


Customers are likely to do their due diligence by researching a product or service before making a final purchase. With 3.5 million searches conducted every day on Google, you better believe a sizeable chunk of those are research related.

Generally speaking, custom intent audiences are for every brand looking to reach consumers on YouTube that are researching their particular industry. More specifically, custom intent audiences are for:

  • Brands looking to extend their reach to YouTube viewers that have shown interest in their product.
  • Brands that want to dynamically target their specific audience on YouTube’s vast platform of 1.9 billion monthly users.
  • Brands that want to convert active researchers into paid customers.
  • Brands that want to find new customers searching for a related brand or product.


So custom intent audiences lets you target customers on YouTube that are researching your related keywords, right? But how does this help your brand in the long run?

  • Higher Engagement: Consumers retain 95% of a brand’s message from video ads compared to 10% from text ads. Custom intent audiences drive your message home to a group of engaged consumers.
  • Amplify reach: Expand your targeting parameters on YouTube from topics and interests to target consumers actively searching for your products, leading to higher engagement.
  • New customers: Find new prospects with related purchase intents that may not have been exposed to your brand otherwise.
  • Drive conversions: Convert active researchers into consumers by reaching them on YouTube at or near their point of purchase.
  • Advanced machine learning: Want to reach your audience on Google Search, but not sure what specific keywords they are searching for? Leverage Google’s machine learning to infer prospect traits and automatically create your audience.

Creating a custom intent audience is beneficial to your brand because it garners results. According to Google Ads, an online investment company called Betterment used custom intent audiences for financial keywords. The results:

  • 6x increase for return on ad spend compared to previous YouTube campaigns.
  • 245% increase in searches on Google.


Activate custom intent audiences with a few clicks:

  1. Go to the audiences section of your display campaign on Google Ads.
  2. Select “Targeting”
  3. Then choose “Intent”

After you click on “Intent”, you will see two options:

  • Custom intent audiences: auto-created: Let Google use their machine learning to auto-create your custom intent audience list.
  • Custom intent audiences: Use a list of keywords or URLs specific to the audience your brand’s campaign is targeting.

Once your custom intent audience is created, your video ad will start targeting YouTube users that are searching the audience’s keywords and URLs from your list.


Yes!  Google has indicated intent audiences drive better results with TrueView For Action ads, which were developed specifically to meet direct response objectives.

With TrueView for Action ads, advertisers can customize calls to action that will appear along with their video ads on YouTube. On mobile, the ads appear below the video and persist even after the video ad ends or is skipped while the host video plays. Google tests have pointed to a conversion lift from both Google Search and YouTube as a result of this ad format combination.

Download A One Sheet Takeaway on Custom Intent Audiences

YouTube Trends: Music

Digital music consumption is a continually evolving market that has undergone massive changes even in the last few years.  While advertisers slowly begin their return to YouTube in the wake of brand suitability concerns, music is a category that should be on any good marketer’s radar.  The transition from digital music downloads to streaming platforms has been rapid and shows no signs of slowing down. While most would agree that the likes of Spotify, Apple Music, and Google Play dominate the scene, YouTube has emerged as a sneaky competitor and their prominence is greater than you might think.  

In 2017, video streaming accounted for 55% of all music streaming across various platforms.  The data shows that YouTube garners the majority of that 55%, solely supporting 46% of all music streaming on the internet; a claim that Spotify or Apple are unable to make.  The difference, of course is that most of this activity is from unpaid subscribers, but YouTube is seeking to change that in the very near future.

In recent years, YouTube has doubled down on their commitment to becoming a fully-fledged music streaming platform.  Statements from Google reps indicate that they will be placing a large focus on trying to get users to become paid subscribers for YouTube Music.  

[Google’s ad strategy will] frustrate and seduce’ YouTube’s free users. It’ll have exclusive videos, playlists, and other similar offerings that’ll entice music fans.  – Lyor Cohen, YouTube’s Global Head of Music

This will mean more opportunities to run ads against musical content on YouTube as growth continues to spur.  

Brand Suitability Considerations

Running ads against musical content can be risky however.  Artists are notoriously hard to predict with regards to what their content might contain.  Even a typically “clean” artist can sometimes release content that would be considered negative for brands to run against.  The challenge becomes how to scale advertising efforts against music content without risking a brand suitability violation. Exclusion listing and inclusion listing are great tools for more static content, but music is far more dynamic than usual content on YouTube.  3rd party services that include technological solutions like audio/transcript analysis can be hugely beneficial in protecting a brand from a violation. Another concern for advertisers should be the frequent use of playlists. Listeners often turn on playlists in the background while they do other tasks; meaning some ads might fall on deaf ears.  In order to mitigate those concerns, it’s likely that audio-driven ads would perform better on this form of content. However, in spite of these concerns, music is simply too big to ignore when it comes to advertising on YouTube. Music’s dominance on YouTube is not only probable, the data shows that it is imminent.

Key Takeaways

  • Inclusion List Channels that resonate with your audience
  • Exclusion List Channels that would reflect negatively on your brand
  • Take note of Video Tags and cross-reference with Keyword Lists
  • Audit campaigns to ensure brand-suitable content alignment

YouTube’s internal brand suitability protocols aren’t the end of the story. Brands have to take ultimate responsibility for their brand suitability. Channel Factory’s 2018 Brand Suitability Best Practices Guide is a great place to start if you want to learn more.

Click Here For The Guide