Posted Jan 25, 2023

10 min read

Marketing, Social media, YouTube

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How Much Do YouTube Ads Cost in 2023



How Much Do YouTube Ads Cost in 2023

Youtube ads cost

Why is YouTube a great platform for advertising in 2023?

Unlike the good old days of televisions, the world is on its screens now. Everybody has a mobile device in possession which is often used as a source of entertainment on the go. While a chunk of the population might resort to Netflix amongst other OTT platforms, another huge global chunk still uses YouTube or alternates between OTT and YouTube as their source of entertainment. As per Statista, there are a whopping 1.86 billion YouTube users in 2023.

YouTube a great platform for advertising in 2021

With so many people watching videos on the app, YouTube hence has become the obvious marketing channel for big and small brands alike. Besides, it is also important to note here that the YouTube search engine is second only to Google, and with Google AdWords behind it, there is no reason for advertisers and marketers to not mine the power of YouTube ads.

The twisted answer to “how much do youtube ads cost”: YouTube Ad Bidding

While YouTube ads should be an obvious pick of most advertisers as established, a major reason why the ground reality stands quite opposite is for the fact that budgeting is rather dynamic for YouTube. Though the budgeting for all and any form of online advertising cannot definitively be predetermined, the general rule on most online platforms remains that the highest bidder is accepted. On YouTube, however, the only way to advertise is to bid on ad placement.

Since YouTube does not give advertisers any set price for advertising, the right way to bid on YouTube ad placement is by setting oneself a daily budget of what you intend to spend on YouTube ads. To begin with, you can set your daily limit to something as low as $10 and raise it eventually to what you deem fit based on the engagement and your experimentation.

YouTube Ad Bidding

As a Youtube advertiser, it should also be noted that YouTube asks advertisers to pay for ads only after a user engages with your ad in some way. For instance, if the targeted user watches a skippable video ad beyond the skip time or if they engage with the CTA or call to action on the video ad. Having said that, targeting the ad before setting the bid options is also necessary as the bid suggestions are changed by YouTube every time the ad advertiser alters the targeted audience group.

So that’s your answer to how much do youtube ads cost! Advertisers on YouTube pay by CPV or the cost per view. Cost per view, as the name suggests, is the amount an advertiser is willing to pay for each engaged view, that is, a viewer engagement for 30 seconds or longer. Besides, YouTube also offers advertisers an estimated projection of viewers per day for in-search, in-display, as well as in-stream ad formats. By running a quick analysis, advertisers can not only find the average cost per view but also understand if their bids are working; if not, all one needs to do is to readjust the bids.

What is Customized Bids-Per-Format?

By choosing the “Customize Bids Per Format” on YouTube, a YouTube advertiser can essentially split their bids separately for the “In-Display” or “In-stream” ad format. This gives the advertiser some power of customization. For example, if one is more inclined towards in-display advertising, they could place higher bets on in-display versus in-stream.

How much do YouTube video ads cost in 2023?

Let us put this straight in one line: there is so definitive a number to how much YouTube advertising costs. The pricing of each ad that goes up on YouTube is dependent on multiple factors like ad type, location, niche, length, competition, season, etc. The type of ad or the ad format you choose for your YouTube ad also plays another important role in the overall cost paid to run a YouTube ad in 2023.

On average, YouTube advertising in 2023 can be expected to cost anywhere between $50 to $300 per one thousand views, that is, $0.05 – $0.03 per view.

How much does it cost to advertise on YouTube in 2021

YouTube advertisers, especially in their initial days, should be ready to shed only a few couples of dollars each day to test the market and sales trends. Eventually, once the ad campaign begins to grow and after enough experimentation on what works versus what does not, the spending should be scaled to bigger numbers. A contrast to this method would only have you find yourself spending thousands of dollars each week, only to realize after a failure that the targeting or the placement of the ads were not favorable.

What factors does YouTube ad costing depend on?

A couple of factors come to play when the cost of a YouTube ad campaign is to be determined. How much a YouTube ad would cost is dependent on the niche your business runs in but on multiple other factors as elaborated below-

  • Targeted Location

factors does YouTube ad costing depend on

Location or location targeting of an ad is one of the biggest contributors to how much do YouTube ads cost. Countries across ad platforms are charged differently depending on how valuable or profitable the country traffic is for advertisers. In other words, the amount paid by advertisers in a first-world country like America will always be higher than the amount paid by an advertiser in a second or third-world country.

  • Targeted Audience

As a promoter of a particular product and service, one naturally would want their advertisement to hit the sweet spot. In other words, advertisers would always want to place their ad on screens of only those specific viewers that they are sure would engage with the ad to eventually drive the sales. Hence, the kind of audience an advertiser goals to reach for, just like the location, plays a relevant role in determining the ad cost. For example, the cost paid for targeting an ad in a premium market like that of luxury cars would be more than the cost paid for targeting a customer on the ad of a drugstore cosmetic. This is because Youtube as an advertisement platform understands that advertisers see great revenue potential in premium markets and hence charge more for targeting them.

  • Ad Format/ Ad Type

YouTube offers various ad formats and ad types that may be difficult to distinguish; however, let us talk about skippable video ads versus non-skippable video ads in particular.

A skippable ad is an ad where a user is allowed to skip the ad after mandatorily watching it for a minimum of five seconds. In terms of a skippable ad, advertisers are charged on the basis of a cost per view, that is, they are charged only if the viewer engages with an ad for 30 seconds or more ( in other words, when the viewer watches the ad even when they are allowed to skip it after the initial 5 seconds of mandatory watching). Skippable ads, therefore, are typically less expensive.

Ad Format/ Ad Type

A non-skippable ad on the other hand is an ad that cannot be skipped and has to be mandatorily seen until it ends. Since the viewers are not allowed to skip the ad and they have to sit through it, the cost per view is higher – unless they have an ad blocker (when you will not be charged). Non-skippable ads, therefore, are typically more expensive.

Ad Format

How to get the most out of a YouTube ad campaign: YouTube ad optimization

Now that you understand how much do youtube ads cost and that it depends heavily on varied factors, it is time to understand this: the ultimate concern of a YouTube advertiser should be on the level of revenue generated with each dollar invested instead of worrying only about the total dollars invested. Since the performance of ads changes consistently, the performance should be closely tracked and tweaked as soon as the previous run version becomes less rewarding.

YouTube ad optimization refers to regular reviewing and analysis of ad campaigns to get an insight into the performance of an ad. Such analysis helps answer the bigger questions like the relevancy and value of an ad in the first place. The most important ad campaign stars that all advertisers should closely track are the “View Rate” of your ads and the “Click-Through” rate of your ads. These stats show you whether people find your ads compelling and whether they are working as a campaign.

How to get the most out of a YouTube ad campaign

The most common issues that do not let advertisers derive revenue for YouTube ad campaigns include-

  • Non-compelling, boring, long, interesting videos.

  • Lack of exposure that allows the competitors to outbid your placed bets.

As a solution-

  • You could try collaborating with influencers. They can not only create compelling content but also drive their already established audience towards your product or service.

  • Once you’ve already experimented with a low budget to determine the targeted audience, it might be time to take the leap and experiment with an increased budget for YouTube advertising. Spending less might seem ideal but in the bigger picture, it would only translate to higher overall spend and lower overall ROI. Once the foundation is set, it only makes sense to try and scale by adjusting the targeting options, ad types, etc.

Final Thoughts-

All said and done, as a final parting note, we recommend a lot of patience in order to successfully run a YouTube campaign. Commit to the channel, understand its nuances, consistently tweak your campaigns, run periodic analyses, and perhaps, even change your video if your content is non-compelling. New to advertising? Do not forget to catch up on the top 10 YouTube Thumbnail Design Ideas to Catch More Attention.

If this article helped you understand how much do YouTube ads cost in 2023, do not forget to leave a comment in the box below. Did we miss out on something? Let us know that too!

How much do YouTube ads cost in 2023 FAQs

1. How much does a 30-second YouTube commercial cost in 2023?

As established, the price of an ad on the platform is heavily dependent on multiple factors like targeting, location, and video formats. However, on average, an advertiser can expect to easily spend  $0.05 – $0.10  per video view, i.e. $500- $1000 for every 10,000 video views in 2023.

2. Is paying for YouTube ads worth it?

YouTube advertising might seem tedious for a beginner but it is the only way forward for a company to maintain its relevance in today’s video-oriented world. A small snippet holds the potential to appear on screens of thousands of targeted audiences at once and hence, paying for YouTube ads, if done correctly, will definitely be worth it.

3. What are the top data analysis tools available for YouTube?

Some top tools that allow YouTube data analysis include ChannelMeter, Vidooly, Tubular, Unmetric, and Social Report.
Besides, YouTube as a platform also allows the advertisers to analyze the ad-data by following these steps-
– Login to your YouTube account.
– Click your profile icon in the upper right corner
– Click on YouTube Studio.
– Hover the cursor over Channel Dashboard and then click on Analytics (left-hand menu)
– Toggle between Overview, Reach, Engagement, Audience, and Revenue to analyze the trends.

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