YouTube Advertising Costs Explained

youtube advertising costs

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 format for your needs.

YouTube Advertising Costs

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 if you take some time to learn the ins and outs of the system. 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.

How Much Does it Cost to Put an Ad on YouTube?

When you get started with video advertising on YouTube, one of the main questions is how much YouTube Advertising costs. Your overall cost will be determined by your budget, and your average cost-per-view, cost-per-lead, and CPM will depend on your YouTube Advertising goals and the audience you are targeting.

  • YouTube Budgeting – 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.
  • YouTube Average Cost Per View (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.
  • YouTube Average CPM – YouTube Advertising CPM is the amount you pay for 1,000 impressions of your video 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:

youtube video ad formats

  • Skippable TrueView 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. You will also be charged for any click-throughs.
  • Non-skippable YouTube 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 AdsBumper ads can be a maximum of 6 seconds long. As with non-skippable ads, you are charged on a CPM basis.
  • Discovery Ads – Discovery 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 Campaign Costs

You are now familiar with the billing process and how it changes with different video types. When you go to Google Ads to begin creating a YouTube campaign, you are prompted to choose the type of ad you want to run from a selection screen; as shown in the corresponding image.

google ads youtube video advertising campaign

Sample YouTube Cost Data

Once you have selected your format, now you have to set your budget. But how do you estimate your costs? To give you a better idea, on a recent Surfside PPC campaign my average cost per view was 3 cents and our average CPM was $9 per 1,000 impressions. So, let’s say I can spend approximately $10 per day, that would mean that I can get approximately 333 views for $10.

YouTube Costs

Now, I will point out that a cost of $0.03 per view is low and that cost will increase as the campaign continues and grows. To account for this, I like to set my cost at $.10 per view to get a better gauge on my spending. Your budget will be personalized for you and may be different than our numbers, depending on your goals and target audience.

YouTube CPM

To calculate your 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 look at the example image of a benchmark data from AdStage, you will see that the average CPM based on their YouTube Advertising cost data was $9.68 for 1000 impressions. That is similar to my YouTube campaign cost, but your goals and target audience will also have an impact on the numbers.

YouTube Cost Benchmarks

Focus on Cost Per Lead Not 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 $10 in a day and get two leads per day, I consider that a successful YouTube ad campaign.

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