YouTube Advertising cost: How To Run Ads on Any Budget

YouTube Advertising cost
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You don’t require a large budget for your YouTube advertising. The important consideration should be your content quality. Your video should be high quality and relevant to your target audience.

With your good video in hand, you can conveniently advertise on this platform without making a bomb on your bank because there is no fixed YouTube advertising cost.

Commonly, the cost of advertising on YouTube is determined by an auction. This means that as an advertiser you will have to compete with other advertisers to have their ad shown to the targeted market.

That is to say, the amount you end up paying as your YouTube advertising cost depends largely on how many other advertisers are willing to pay that particular amount or the amount the highest bidder offers to pay is what will determine your YouTube advertising cost.

However, you can allocate a budget for your YouTube advertising campaign, so that you will never have to spend more than you budgeted for. Plus, you can start with a small budget to see how effective a YouTube advertising campaign can be for your business.

When you are considering advertising on YouTube, the best advice I will give is that you should contact a media buyer or advertising agency to get started.

Either of these two can help you create an effective advertising campaign and determine the right budget for you by putting into consideration the following determining factors: your budget, the average, cost-per-lead, cost-per-view, and CPM will depend on your YouTube Advertising objectives and the audience your campaign is targeting.

#1. Your Budget: The total amount you will spend is directly dependent on the budget you set. You will set a daily budget and forecast how much your ad spend will be over the course of a month. You can set your ad to run on YouTube with a budget as low as $1 a day.

#2. YouTube Average Cost Per View (CPV): YouTube ads have an average cost per view of $0.05 – $0.30, and the views that you earn from here will count towards your overall YouTube viewer count.

#3. YouTube Average CPM: YouTube Advertising CPM is the total amount you pay for 1,000 impressions of your YouTube ad.

YouTube Advertising Formats

When you have turned on video monetization, you find several types of ads that may appear during or next to your videos, they include:

#1. Skippable video ads

These ad types allow viewers to skip video ads after 5 seconds of play. They are the commonest types of YouTube ads and are found on platforms such as mobile devices, computers, and game consoles.

You only pay for skippable videos that viewers watch for 30 seconds or more (this is if your video is not shorter than 30 seconds). The benefit of this is that you do not have to worry about paying for people who skipped your video as soon as they could.

This keeps your ad costs low, but of course, you will not gain any benefit unless people watch your ad, click through and buy your product.

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#2. Non-skippable video ads

These ad types are placed to be watched before a video can commence. These 15-20 seconds ads compel viewers to go through a 15-20 seconds wait before they can finally watch the main content.

These make the ads unloved and unpopular and may be phased out soon.

When using these video ad types, you are charged on a CPM basis.

#3. Bumper ads

These ads are programmed to play for 6 uninterrupted seconds before a video can be viewed. Bumper ads are powered on when skippable or non-skippable ads are turned on.

As with non-skippable ads, You pay for bumper ads by impressions. They are charged by CPM (cost per thousand impressions) As a result, you pay for a bumper ad each time your ad receives 1,000 impressions.

YouTube Advertising cost
Image credit: Pixabay

#4. Overlay ads

Overlay image or text ads that can appear on the lower 20% portion of a video. They are increasingly becoming popular for online marketers to generate leads, brand awareness, and sales.

They can only be displayed on computers.

Overlay ads offer advertisers a good way to drive traffic to their YouTube channel or website. For this to work on your YouTube channel, you first need to saturate and make full of engaging & entertaining videos.

Aside from this, you would also want to create a fascinating welcome video to encourage people to stay the moment they clicked through to your channel.

#5. Display ads

These ads appear to the right of the feature video, above the video suggestions list. Display ads are a worthwhile investment for a business. They yield across-the-board and targeted exposure across the web and are only displayed on the desktop platform.

If you can correctly guess the keywords in your niche that people always search for, you could create a corresponding video to go with the keywords. Doing this will make your ads appear as relevant to the searchers as other feature videos on YouTube.

Display ads are less popular with advertisers because they do not impose on the main videos your users watch. However, these ads can still generate positive returns for your advertising campaign.

Using this ad type, you can pay as low as 3 cents per view when you promote a video here.

#6. Sponsored Cards

These ad types draw out content relevant to the video, such as products featured in the main video. These cards act as teasers to whet the appetite of the viewer to continue into the video.

#2. Defining Your Target Audience for Your YouTube Ads

Defining your audience helps you regulate YouTube advertising costs, but at the same time ensures that you receive enough clicks from the people whom your ad is meant for and this makes your campaign journey worthwhile.

The more your targeting options, the tighter your target. We recommend two or three targeting options for a target group.

Consider thinking in terms of keywords. What terms will your target audience likely use when they search for products in your niche on YouTube?

The more attention you pay to this, the less avoidable expense you will have from users watching your videos but not taking any steps to go down the sales funnel.

On another level, if you sell products targeted at middle-aged men, you should avoid targeting video search terms most often used by teenage girls.

You can also look at other targeting demographics. If you sell your products in only one country, you should avoid advertising to the entire world.  In this same manner, you may wish to limit your ad to countries where a bulk of individuals speak English.

All of these measures when monitored fiercely can drastically cut down on your YouTube advertising cost.

#3. Creating Your YouTube Video

Businesses often discover in the course of video creation that it costs the highest proportion of YouTube advertising cost. This, of course, depends on the level of finesse and professionalism put into the video production.

However, on average, people spend anywhere from a few dollars to millions, so it honestly depends on what you want to achieve and how much backing you have to achieve it.

However, note that if your video is low quality, people will skip it long before it gets to the 10th second. A low-quality video does not tell your brand story or at best, it presents it in a poor style.

While some firms can safely get away with a $5,000 homemade video. Others will look shabby unless they invest $100,000 into the video creation process by employing professional actors, crew, and production values.

Note that YouTube is not the same as traditional Television where a viewer is not allowed to skip ads no matter how much they don’t appreciate them. So your YouTube ad videos should be attractive and colorful.

The more inventive you can be with your video ad, the less reason there is for the viewer to use the skip buttons when they come across your content.

#4. Bidding

The key to the level of your YouTube advertising cost is the need to bid on ad placement. Using YouTube, prices are not dictated to you, you choose for yourself how much you want to commit to your campaign.  You are not given any set prices and you take it from there.

Specifying for yourself a daily budget at an amount you are comfortable with. In the beginning, most businesses settle for at least $10 a day for their YouTube advertising campaigns, and only when they have mastered the terrain do they raise this to higher bids.

A lot of times, most advertisers bid by CPV (cost per view) This means that you are willing to pay up to your bid figure for every view.

You are also allowed to set a maximum figure you are willing to pay a day. This ensures that you are not left in a pool of shocks should more people watch your ads than you anticipated thereby blowing off your bid cap.

To control your YouTube advertising cost, you are prompted to bid a Max Cost Per View. YouTube will give you a typical category of bids; this will depend on how much you have limited your audience in your targeting.

YouTube CPM-What is it?

CPM, or cost per mille, shows the amount advertisers pay content creators per 1,000 views. For instance, if you get 200,000 views and have a CPM that’s $10.50, the video’s total revenue is $2,100.

That is your return on investment, right? Hell no, YouTubers don’t get to pocket it all if not, how would the search engine get paid? So to compensate itself, YouTube takes a whopping 45% cut, that is a mad cut you will say, leaving your actual returns at $1,155.

Oops! I’m sorry, I forgot to inform you that Uncle Sam (United States Government) gets a bite from these returns too.

YouTube advertising
Image credit: Pixabay

Then to shock you the more if you didn’t know of this before, know now that not all views are monetized so you may not receive payment for every eyeball that sets on your YouTube ad. Is it clear? Let me make it clear.

Some views you count are repeat views (someone who has seen you ad returning to see them again). And again others don’t count because the viewers didn’t watch for at least 30 seconds.

To calculate your actual CPM cost, I recommend using a CPM calculator. It allows you to enter your cost to find how many impressions you will get, or enter how many impressions you want and find out how much it will cost.


If you are looking for ways to help your business reach new users and expose them to your brand, YouTube is the answer to your search. This social business platform will help you link with people that are looking for a business like yours.

This material exhaustively covered all YouTube advertising cost determinants, so if you are ready to start earning more valuable leads with your advertising campaign and optimizing your YouTube advertising cost.

It is up to you to decide how much your YouTube advertising cost should be. Deciding your budget and maximal bids will allow you to invest the exact amount you want.

The key is to determine how bids need to be priced to achieve the desired goals for your campaign. Once this is in place, you are set.

Terhemba Ucha

Terhemba Ucha

Terhemba has over 11 years of digital marketing and specifically focuses on paid advertising on social media and search engines. He loves tech and kin in learning and sharing his knowledge with others. He consults on digital marketing and growth hacking.

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