YouTube Advertising Costs Explained: Your 2023 Guide

If you’re interested in learning about YouTube Advertising costs and how they work, we will show you how to estimate your budget and choose the right advertising format for your needs.

YouTube Advertising Costs Video

We get a lot of questions about YouTube advertising costs; and while it may seem like a complicated topic, running your video advertising on YouTube can be fairly simple. In this article, you can watch our video, we will show you some examples and explain the basics of advertising costs on YouTube. To begin, you will see an example of an ad campaign Surfside PPC is running right now. You can view our YouTube Advertising Tutorial to see how you can set-up a campaign.

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How Much Does YouTube Advertising Cost?

Your overall YouTube Advertising cost will be determined by your budget. For budgeting, you can set your daily budget or use a campaign total budget, so you have complete control over spend.

Your Avg. CPV, cost per conversion, and Avg. CPM will depend on your YouTube Advertising goals, your budget, your location targeting, and the audience you are targeting. For average cost per view, You can expect to spend anywhere from $0.05/view to $0.30/view. For your average cost per 1,000 impressions, you can expect an Avg. CPM of $5 to $20.

Budget and Spend (Cost)

The overall amount you will spend is directly dependent on the budget you set. You will set a daily budget and calculate how much you spend over the course of a month. You can put an ad on YouTube for as little as $1 per day.
Average Cost Per View (Avg. CPV)

YouTube ads have an average cost-per-view of $0.05 – $0.30, and the views that you generate will count towards your overall YouTube viewer count. Video costs are determined by your bids, budget, advertising goals, and the competitiveness of the audience you are targeting.
Average Cost Per 1,000 Impressions (Avg. CPM)

YouTube Advertising CPM is the amount you pay for 1,000 impressions of your video ad.
Cost Per Conversion (Cost/conv.)

The best way to monitor your campaigns is to use conversion tracking and to optimize your campaigns to get your cost per conversion as low as possible.
Average Cost Per Engagement (Avg. CPE)

You can also look at your cost per engagement, which will include all ad engagements. Engagements include clicks, views, and any interaction with your advertisement.

Sample YouTube Advertising Campaign Costs

I created a YouTube Ads campaign to drive conversions in my Google Ads account. Below, you will see some sample data that shows my spend, Avg. CPM, Avg. CPV, Avg. CPE and my Cost/conv. for the campaign.

Analyzing YouTube Ads Cost Data

For my campaign, I am paying $0.09 per video view, $6.40 per 1,000 impressions, and $0.07 per engagement. Since I haven’t driven a conversion yet, I don’t have a cost-per-conversion metric yet.

YouTube Avg. CPM

To forecast your average CPM, your campaign cost, and your video views, 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. You can use my sample data above or you can use numbers such as $0.10/view and $10.00/thousand impressions.

Focus on Cost Per Conversion Instead of Cost Per View

Every advertising medium is different, but with YouTube, companies typically do not advertise for website traffic. Your goal should be for driving leads or driving brand awareness and reach. At Surfside PPC, we don’t expect heavy website traffic after running a YouTube ad, but if I spend $50 per day and get two leads per day, I consider that a successful YouTube ad campaign, regardless of the number of views or impressions my campaign drives.

Campaign Costs Will Vary By Campaign Type

When you are running a campaign that is focused on conversions, you will likely notice increase costs for each view and impression. When you are running campaigns geared towards branding, product consideration, and awareness, you will notice decreased costs, but less conversions. Each campaign type below will have different average costs and it’s cheaper to run a 15-second non-skippable in-stream ad compared to a 30-second skippable in-stream ad.

YouTube Video Ad Formats and Costs

While these are averages, the main factor that will determine your overall cost is what video ad format you choose to run. There are several different types of YouTube video ad formats, as explained below:

Skippable In-Stream Ads – In a skippable in-stream ad, viewers are given the choice to skip the ad after 5 seconds. You will not be charged if the viewer chooses to skip. After the view of a skippable ad, you will be charged after 30 seconds or the length of the full video if it is less. You will also be charged for any click-throughs.
Non-skippable In-Stream Ads – In a non-skippable in-stream ad users can’t skip the video. When using these videos, you are charged on a CPM basis, and they can be a maximum of 15 seconds.
YouTube Bumper Ads – Bumper ads can be a maximum of 6 seconds long. As with non-skippable ads, you are charged on a CPM basis.
YouTube In-Feed Ads – In-feed video ads run on the YouTube search results and watch pages. The ad consists of an image thumbnail and three lines of copy. You are charged anytime someone clicks on the ad.
Outstream Ads – Outstream ads are only offered as a mobile option. You are charged on a CPM basis; but only if your ad is viewable. An ad counts as “viewable” when 50 percent of the ad screen space is visible for two seconds or more of continuous video play.
YouTube Masthead Ads – You are charged on a CPM basis, but you must purchase Masthead ads directly from a Google sales representative.

YouTube Ad Formats and Campaign Types Video

In Summary

YouTube Advertising costs can vary, but you can expect to spend around $0.10 per view and $10.00 per 1,000 impressions. It’s very difficult to forecast an average cost per conversion because it will vary for every industry. As far as how much you spend, an advertiser has control over their budget.