Believe it or not, YouTube didn't always have ads. Once upon a time, the platform was totally ad-free, and content creators didn't make a dime. In 2009, a little after its 4th birthday, YouTube allowed ads in seven different formats, and the rest is history. Today, it makes an eye-watering $15 billion in advertising alone, and some YouTubers (or "content creators") are multi-millionaires.
There's a simple reason why YouTube generates so much ad revenue: People want to advertise on it. For starters, it has an unparalleled global reach — 1.3 billion people and counting.
It also targets pretty much every demographic — Gen Z., millennials, and boomers in one fell swoop. Eight out of 10 18-49-year-olds in the United States watch YouTube, which is more than ABC and CBS and NBC and FOX. There's nothing on the internet (or on the media landscape) quite like it. YouTube is a unique phenomenon.
Advertising on YouTube isn't always easy. It's not rocket science, but it's a fine art, and not everyone's good at it.
Understand the Basics
There isn't just one type of YouTube ad, but three different video ad categories:
TrueView ads appear at the start of YouTube vids — the ones that viewers can skip after a few seconds (usually five). Research shows that most people do skip these ads (though it depends on the ad), but this doesn't mean they don't work. Example: One TrueView ad campaign generated a 37 percent boost in digital sales and a 55 percent increase in product sales.
Non-skippable ads appear at the start and middle of YouTube vids, but viewers can't skip them. They can't last any longer than 20 seconds (it used to be 30 seconds), and they only appear on some vids. YouTube calls the non-skippable ads at the start of videos pre-roll ads and the ones in the middle of vids mid-roll ads. (They are essentially the same thing, but mid-rolls only appear in videos that are 10 minutes or longer.)
Bumper ads appear at the end of YouTube vids. Viewers also can't skip them. Bumper ads can't last for more than six seconds.
Did you know... Most brands use a combination of TrueView, non-skippable, and bumper ads when advertising on YouTube?
Advertising on YouTube is a lot cheaper than people think. Businesses, on average, pay $0.10-0.30 per view or action on YouTube, with a daily budget of just $10. That's around the same as a couple of large cups of coffee at Starbucks.
5 Seconds to Impress
Research suggests that human beings form a first impression in seven seconds, but it's even quicker on YouTube, where viewers can skip TrueView ads after the first five. Seventy percent of viewers only watch the first five seconds of TrueView ads, so brands don't have long to get their message across.
Here are some tips for making a good impression in five seconds or less:
The goal here is to make your ads "unskippable."
Did you know... Eight out of 10 people on YouTube prefer TrueView ads to regular in-stream ads?
Understand How YouTube's Ad Algorithms Work
YouTube (like its parent company, Google) constantly changes its algorithms, so it's hard to predict exactly where ads will appear on the platform.
Placement targeting lets brands place ads on particular channels and videos, although most companies decide to advertise on a broad range of vids, which exposes their services to more people. YouTube lets advertisers target their ads to particular demographics such as:
Recently, advertisers have been able to segment audiences even deeper and target prospects based on a whole range of criteria such as homeownership, marital status, and parental status. All this results in more target ad campaigns.
Know the Difference Between Video Ads and Sponsorships
Sponsorships can be a pretty effective way for brands to connect with lucrative demographics on YouTube. Research shows that a massive 96 percent of consumers don't trust traditional advertising, so sponsorships could prove lucrative. Moreover, 88 percent of people trust online recommendations (from content creators, for example) as much as recommendations from friends and family. Much like "influencers" on Instagram, YouTube content creators boost awareness, sales, and overall revenue.
How to Reach Out to Content Creators
In order for sponsorships to work, brands need to reach out to content creators on YouTube. Some of these creators have millions and millions of followers and can expose a product/service to a huge global audience.
Reaching out to content creators all depends on the creator. Some YouTubers can be reached via private message; others have an email address on their profile for business inquiries. The most-followed content creators might have agents who handle all their sponsorships.
Did you know... 78 percent of marketers say YouTube is the most effective video marketing platform — and more effective than Facebook (58 percent)?
YouTube advertising isn't always easy but marketers who do it right will generate an almighty return on their investment. People around the world watch 5 billion YouTube videos every single day, making YouTube advertising one of the most powerful weapons in any marketing arsenal.