Marketers rely on YouTube to increase brand awareness and connect with their target audiences through creative ads. So how do you know how much you should spend on these efforts?
A YouTube Ads cost calculator can point you in the right direction by estimating the return on investment of your YouTube ads. However, there’s a lot more to consider when determining the costs of YouTube ads.
This guide covers everything you need to know about YouTube ad costs, including how much you pay, the factors influencing price, and how you can maximize your advertising efforts without overspending.
What Ad Pricing Models Does YouTube Use?
You need to understand two pricing strategies before deciding how much money you want to allocate toward advertising expenditures: Cost-per-click and cost-per-view.
Cost-per-Click Ads (CPC)
You pay every time someone clicks on your ad. As the advertiser, you set the limit for how much money you’re willing to spend for every ad click.
Cost-per-View Ads (CPV)
With the cost-per-view strategy, you pay for every ad view. When a user views your ad for its entire duration, the cost will reflect that view. If a user interacts with your ad (e.g., clicks on a call-to-action button), that would also factor into the cost-per-view method.
How Much Do YouTube Ads Cost? A Breakdown
It varies. Some estimates range from $0.01 to $0.03 for cost per view. Let’s say your reach is 50,000 views, and your price is $0.03. In this case, you should expect a cost of about $1,500 for reaching 50,000 views. However, other factors also come into play when determining ad costs. These include:
- Ad Formats
- Targeting Options
YouTube has multiple ad formats for presenting your ads, each with different estimates. Here is just a sample of those ad formats:
- Display ads: These are usually located above the suggested videos, depending on what the user is watching.
- Skippable in-stream ads: Can appear before, during, or right after the video, with the option to skip after five seconds.
- Non-skippable in-stream ads are typically 15 seconds long, and users cannot skip them.
- Discovery ads appear as recommendations on the right-hand sidebar with a link that takes users to a specific landing page.
Ad costs will also depend on the audience you want to reach with your ads. The general rule is that the more specific you are in your targeting efforts, the higher your ad costs will be. Why? Because there will be more competition for the ad spots, you’ll need to connect with your audience.
Ad bidding refers to the amount you’re willing to bid on for a specific ad placement. YouTube has a bidding system where advertisers compete against one another for the same ad space. Bidding allows you to determine the amount you’re comfortable with, so you’re not limited to a set price.
Is It Cheaper to Run Ads on YouTube Compared to Facebook?
Is it cheaper to run ads on YouTube than on social media platforms like Facebook? It depends. With YouTube, you have the option of only being charged when a user watches your content, which can reduce ad expenditures. Additionally, since YouTube is a part of the Google Display Network, you can target your ads based on Google search queries, which means more ad exposure.
With Facebook, setting up your ads doesn’t take much money or resources. Plus, you have advanced targeting features to ensure you’re targeting the right people with your ads. Ultimately, both platforms have their pros and cons when it comes to advertising costs.
Calculate Your Ad Budget with the YouTube Ad Budget Calculator
To calculate your YouTube ads budget and determine how much money you can expect from your advertising campaign, you’ll need to estimate the return on investment of your ads with the YouTube ads cost calculator tool. To get an exact ROI figure, plug the following into the tool:
- Your total ad spend
- The average cost-per-click
- Conversion rate
By obtaining exact ROI estimates, you’ll be in a better position to assess the effectiveness of your ads and make informed decisions about your ad budget.
How Much Should You Budget for Your Ad Campaign?
How much you should spend depends on your marketing goals and how much your company can afford to spend without stretching your budget too thin. Regardless of your budget flexibility, you’ll want to maximize the effectiveness of your ad campaign. Follow these three practices to get the most out of your YouTube ads:
1. Target the Right Audience
Who are you trying to reach, and what value will your intended audience obtain from your ads? If your ads are deemed irrelevant, or you end up targeting the wrong audience, then customers will skip your ads, and you won’t get meaningful returns on your investment.
2. Target the Right Keywords
The right keywords allow you to increase the chances of your ads showing up when users are looking for products and services that pertain to your brand. Be selective in the keywords you want to rank for with your ads. The key is to select high-volume and relevant keywords that will increase ad visibility.
3. Monitor Ad Performance
Track the performance of your ads and make adjustments based on your findings. Analyze metrics such as views and conversion rates from your ads. You’ll also want to measure your return on ad spend (ROAS).
This metric measures the revenue your business generates for each advertising dollar you spend. To get an exact value, divide your total ad revenue by your advertising costs.
Optimize Your YouTube Ads Campaign with Channel Factory
Running ads on YouTube is a solid way to reach new customers by exposing them to your brand. If you’re ready to run an ad campaign that produces long-term results, it’s time to partner with Channel Factory.
With our contextual alignment solutions, we can maximize your advertising campaign by placing your ads alongside relevant content that makes sense for your audience.
Now you don’t have to worry about advertising money going to waste. Contact us to talk solutions.