YouTube Ads: Costs, benefits, and tips to maximize your ROI
If your business's marketing strategy doesn’t include YouTube ads yet, you could well be missing out on one of the most powerful PPC platforms for visually showcasing your brand, offering greater depth than standard text and image based ads 💪
With a reported 122 million DAU (daily active users) and video content dominating the internet, YouTube offers brands an unparalleled opportunity to reach, engage, and convert audiences, often at a much lower cost than traditional paid ads.
In this article, we’ll break down the different types of YouTube ads available, their costs and benefits, key performance metrics, and advanced targeting refinements you should know to get the best out of the the platform in 2025.
Let’s get into it 🚀
The benefits of YouTube Ads
Whether you're looking to boost your brands awareness, drive traffic to a specific landing page or website, or skyrocket sales, YouTube ads are an advertising game changer, and here’s why 👇
Reach a massive audience
YouTube is the second largest search engine in the world, where millions of users watch billions of hours of content every single day, so what better place to give your brand the chance to appear, at the perfect moment 🌎
As YouTube runs seamlessly across devices, from mobile phones to smart TV’s, you can guarantee your ads will reach their target audiences, no matter where they watch.
Higher engagement
Video content is simply more engaging, a better storyteller, more memorable and more persuasive than traditional static image and text based ads. With the right ad creative (we're talking images, headlines, copy and CTA), YouTube ads can tell your brands story and drive action like no other platform ✅
Precise targeting
Leveraging Google’s own data means one thing…you can forget about wasting ad spend on the wrong audience and zero in on the exact people likely to buy from you 🎯
With hyper-focused targeting based on a host of attributes, from age to search history, life milestones to personal interests and online behaviours, YouTube gives you the opportunity to make your budget go further, reaching people who actually care about your product or services.
Drive sales (and conversions), not just views
YouTube is more than just a platform for brand exposure and captivating visuals, it’s also a powerful revenue driver 💪
With shoppable ad formats, clickable CTA (call to action) overlays, and direct links to product or landing pages, you can lead viewers to take immediate action.
Whether it's visiting your site, signing up for service or making a purchase, YouTube ads can turn viewers into customers, lightning fast ⚡
Optimize performance in real time
A different advertising format doesn’t mean sacrificing data quality. With Google’s powerhouse of data backing up YouTube, you can be assured that all the insights you need will be right at your fingertips.
In just a few clicks, you can have access to the key metrics that matter most:
📈 Watch time: How long viewers actually viewed your ad.
🎯 View-Through Rate (VTR): The percentage of viewers who watch your entire ad.
👆 Click-Through Rate (CTR): The number of viewers who clicked on your ad or associated links.
💸 Cost per Acquisition (CPA): The cost for each conversion event.
YouTube ad costs: Understanding the basics
Like with most PPC channels, YouTubes advertising costs vary based on multiple factors, like ad format, targeting, and bidding strategies. On average, YouTube ads cost between $0.03 to $0.30 per view, however, your actual costs can also depend on your industries competition and your audience targeting 💵
YouTube ads are designed to be pretty cost effective to fit with most budgets, whether you’re a lean startup or an established brand, you can quickly and easily set your daily ad spend, adjust bids, and optimize campaigns to maximize your ROI.
Compared to the old school TV ads, which cost anywhere between thousands of dollars to millions, YouTube ads have a much lower CPV (cost per view) associated, with some formats as little as $0.03 per view - that’s a massive win for digital marketers, without the massive price tag.
CPV isn’t the only pricing model available, with CPM (cost per thousand impressions) used for a number of their ad formats, you can expect to pay based on the number of impressions (views) your ad receives.
Naturally, costs depend on the ad format chosen, but there’s one to match every marketing budget, so let’s break them down 👇
YouTube Ad types: Choosing the best fit for your campaign
Advertising on YouTube means you have a variety of potential ad formats to help you achieve your marketing goals, but you’ll need to be sure of what you’re looking to achieve, how much you’re willing to spend and how prevalent you want your ads to be:
In-stream ads
Formerly called 'TrueView Ads', in-stream ads are YouTube’s go-to ad format available across desktop and mobile devices, with skippable or non-skippable in-stream ads appearing before, during, or after videos:
Skippable in-stream ads
These allow the viewer to skip the displayed ad after 5 seconds, ensuring you only pay for engaged viewers - a great way to get brand awareness and engagement without being intrusive and allowing you to make your budget go further.
🔥 Perfect for brands looking to reach a targeted audience with a compelling message, whilst only paying for actual ad views.
Non-skippable in-stream ads
These run for 15-20 seconds and have to be watched in full, giving brands a valuable opportunity to craft engaging ads with a compelling CTA. They’re perfect for high-impact brand awareness campaigns that demand attention.
🔥 Perfect for brand awareness & actual engagement where you need to ensure your brands message is seen in full. As they aren't skippable, they tend to make a more lasting impression, but at the cost of being slightly more intrusive than their skippable counterpart.
In-feed Video ads
Previously known as 'Video Discovery Ads', in-feed video ads display alongside search results that are more likely to be viewed by your targeted audience as well as appearing in YouTube search results, the watch next module and home feed.
Instead of playing automatically, they display a thumbnail and title, requiring viewers to choose to engage - clicking the ad redirects them to the ads associated YouTube video URL.
🔥 Perfect for brand exposure and visibility. Since these ads appear where people are actively searching for content that may have a connection with your product or services, they’re great for reaching new audiences and driving traffic to your channel or videos.
Display ads
Display ads are static image-based ads that appear next to the video player on YouTube’s desktop site - just search for something and take a look at the right hand side of the screen.
They offer a less intrusive way to advertise, featuring a clickable image and CTA, and are perfect for complementing video campaigns as they provide visibility without interrupting the viewing (or searching) experience.
🔥 Perfect for targeting users while they browse YouTube’s desktop site. They’re great for supporting other ads or promoting a product/service without interrupting the viewing experience, just make sure that your ad creative aligns with what your target audience is looking for.
Shorts ads
Short, snappy, and designed for scrolling, these are vertical only video ads that appear between organic Shorts videos as users swipe through their feed. This creates a pretty seamless placement and makes them feel like a natural part of the viewing experience while still standing out, rather than a more intrusive, in your face ad.
With an average run time of 15 to 60 seconds, these ads were created and optimized for mobile users and are perfect for delivering bold, punchy, bite-sized content that pushes the viewer to take action.
🔥 Perfect for reaching straight into the palm of mobile users, boosting brand awareness, and driving fast engagement with short-form, high-impact ads.
Bumper ads
Bumper ads are 6-second, non-skippable video ads that play before, during, or after YouTube videos, making them a brilliant way to deliver a quick, memorable message - just make sure that message is expertly crafted for those all important 6 seconds!
Sold on a cost-per-thousand-impressions basis, they’re perfect for brands looking to boost their awareness on a budget and are more affordable than premium placements, packing a high-impact punch for maximum visibility.
🔥 Perfect for boosting brand recollection and reaching a wider audience with a quick, impactful message or CTA.
Sponsored cards
Okay, these aren’t as flashy as video ads, but they deserve a spot on this list…hear us out!
Sponsored cards display relevant content related to the video being played by the viewer, such as products, services, or promotions featured in the clip. Unlike the now retired 'YouTube Overlay' ad format, they appear for 5-10 seconds before either being replaced or disappearing entirely, making them a non-intrusive way to enhance engagement.
🔥 Perfect for highlighting featured products, driving traffic to related content, and providing additional context without disrupting the viewing experience.
Masthead ads
Masthead ads are the top-tier of YouTube advertising, dominating viewers' homepages and allowing brands to make an unforgettable first impression. As one of the most premium placements, they’re virtually impossible to miss.
These are more exclusive ads, and aren’t available to everyone - they're sold through direct deals on a cost-per-day basis and run across desktop and mobile.
Pricing? Let’s just say it’s in the thousands to millions ballpark, making this a game for the biggest brands with the deepest pockets 💰
🔥 Perfect for generating massive brand awareness. If you're launching a new product, promoting an event, or need major exposure, Masthead ads are your ticket to high-impact visibility, albeit they come with a premium price tag vs all other ad types.
Refine your targeting, maximize your ROI
You've selected your ad format, but effective targeting is essential to maximizing your YouTube ad spend. With Google's vast data resources, you can fine-tune your audience reach in multiple ways, ensuring your ads reach the right people, at the right time, with the right (carefully crafted) message.
Let’s explore some of the most powerful targeting tools at your disposal:
- Demographic targeting: If your product or service is best suited for a particular age group, gender, or income level, demographic targeting helps you zero in on the right audience 🎯
- Affinity audiences: These are predefined groups of users that Google categorizes based on common interests, using their browsing behavior, app usage, and YouTube activity. This makes it easy to connect with audiences who are genuinely passionate about specific topics.
For example, a fitness brand can target users interested in “health & fitness” or “running enthusiasts”, ensuring their ads reach the right audience at the right time in their potential buying cycle 🏃 - Custom intent audiences: Imagine being able to take an even more tailored approach and target users based on their previous search behaviours. Well with custom intent audiences you can! This means you can create an audience of people who have searched for keywords that relate to your product or service.
For example, if you sell online courses, you can target users who have searched on YouTube for “best online coding bootcamp” or “learn JavaScript online”. - In-market audiences: These are your sweet spot customers, as they are already actively searching for products or services similar to yours, meaning they have high purchase intent.
For example, if you’re in the automotive industry, you can target users in the market for a “new sedan” or “hybrid SUV” 🚗 - Life events: Big life events can trigger potentially big purchasing decisions. Whether its graduating from college, to buying your first home or car, or even getting married, YouTube allows you to target these potential customers based on their previous search history, website visits and purchases 💒
- Retargeting (also known as remarketing) audiences: If your ad was viewed previously, but didn’t convert, retargeting gives you the opportunity to show an ad again - think of it as the ultimate opportunity for a second 1st impression.
Whether its people who visited your website, engaged with your YouTube channel or viewed an ad but didn’t take action, retargeting has you covered. - Lookalike audiences: This ones a self explanatory one. If you have an existing list of customers, YouTube can find viewers with similar interests and online behaviours and create a lookalike audience. Nothing like expanding your reach whilst ensuring ads are only shown to relevant potential customers 📋
- Placement targeting: If you’re looking to have your ad show up on a specific channel or video, placement targeting is the one for you. Imagine the power of being able to showcase your new product exactly where potential customers are already viewing associated content.
- Topic/keyword targeting: Allows you to refine your targeting based on keywords and topics relevant specifically to your business. This ensures your ad appears on content as closely related to your sector/niche as possible 🔍
For example, if you’re a new to market dog food brand, you can target viewers that have previously searched for “healthy dog food brands”.
Our conclusion
YouTube advertising is one of the most powerful tools for digital marketers looking to drive awareness, engagement, and conversions outside of standard plain text and image adverts.
With a variety of ad types, precise targeting options, and flexible pricing to fit any marketing budget, YouTube ads offer unmatched value for brands of all sizes.
Here’s our top 3 tips for a successful campaign:
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