How Much Do YouTube Ads Cost?10 min read

Liquid Digital May 1, 2023
YouTube Ads Cost

YouTube is a groundbreaking platform with an audience of over two billion monthly users spanning the globe. It is currently the world’s second most popular social media service, just behind its big brother Facebook.

With a wide variety of cultures and languages represented across 100 countries, YouTube offers businesses the chance to reach a nearly endless pool of potential customers. 

Advertising on YouTube can help you build greater customer loyalty.

However, many potential advertisers may hesitate due to the cost associated with YouTube ads. If you are one of them, don’t worry – because we’ve got you covered. 

Factors That Influence Youtube Advertising Costs

We don’t want to disappoint you, but there is no short answer on how much a youtube ad campaign will cost you since it depends on multiple factors. According to recent statistics, the average advertising cost can be anywhere from $0.05 to $0.30 per view, which equates to around $50 – $300 per thousand views.

In Australia, the cost per view typically starts from around $0.10 per view; however, it depends on the target audience and the market’s competitiveness for that particular product or service. 

To get a more specific idea, you will have to consider these aspects of the youtube campaign. 

Audience Targeting

When creating an ad campaign, the most important thing is to determine your target audience; otherwise, you’ll spend money on people that aren’t interested in your product or service. 

Also, the cost can be greatly affected by the industry being targeted. The YouTube advertising cost in entertainment industries, such as film and television, tends to be much lower than those in more lucrative fields, such as finance. This main reason goes back to the concept known as supply and demand.

For example, if you want to reach a specific group of people residing in Melbourne, you’ll pay more than if your goal was to target a broader audience, such as the entire country. 

YouTube Ad Type 

YouTube ad campaigns have several types of ads. The main difference is whether they are skippable video ads or non-skippable video ads. If your entire youtube campaign only has non-skippable ads, then you’ll be paying higher advertising costs than someone who’s running only skippable ads. 

Video Quality & Length 

Longer YouTube video ads are more expensive, while shorter ones are cheaper because advertisers have to pay for every second viewer will be exposed to their message. Take into account the quality of the video. If it has good production value, it’s more likely that it will get YouTube users’ attention. 

Channel Niche

YouTube ad cost largely depends on your niche. Low-competition niches with high traffic will be much cheaper than if you were in an industry with steeper competition and lower levels of audience engagement. 

It’s difficult to determine which niche is the most profitable for content creators. Factors such as a YouTube channel monetization plan, their viewers’ level of engagement, and the quality of the material they produce can influence how much money they make from video views. You can understand this more accurately by using the CPM – Cost per mille (in other words, cost per thousand) metric.


Like with most advertising platforms, YouTube ads work on a bidding system, allowing you to compete with other advertisers for the same ad placement. When it comes to video advertising, you will be charged based on a cost-per-thousand (CPM) or cost-per-view basis. You’ll be charged every time a person engages or watches your ad for more than 30 seconds. 

Daily Advertising Budget 

YouTube advertising costs don’t have to break the bank. Starting with a budget as low as $10 per day, you can get your message out there and see instant results. You can define your daily budget depending on the duration of your advertising campaign and the amount you want to spend per day. 

YouTube Advertising

Top YouTube Ad Formats You Must Know About

Skippable Ads

Skippable video ads are one of the most common types of ads you can see on YouTube. They are easy to create and can be up to six minutes long. You only pay for the time people spend watching the video, so you won’t have to worry about wasted ad spend. 

There are three different bidding and billing models for skippable ads, including Cost Per View (CPV), Cost Per Mille (CPM), and Cost Per Action (CPA).

Non-skippable Ads

Non-skippable ads are best used for boosting your reach. They are displayed right before or during a video, and there are no skip buttons, which gives your brand the attention it deserves. A non-skippable video ad is significantly more effective than a skippable ad. And, it’s a cost-friendly way to raise awareness and spread your brand’s message to your target audience. 

Bumper Ads

Bumper ads are perfect for quickly delivering a powerful message to your audience that’ll leave a lasting impression. This is a six-second ad format that plays before any YouTube video and has the potential to take your business from unknown to unforgettable. So if you are looking to build brand awareness, a bumper ad is a cost-effective option.

Outstream Ads

These are special video ads that only appear on mobile devices. Outstream ads aren’t available on YouTube. Instead, they appear on websites running on Google video partners. Advertisers only pay for out-stream ads when at least 50% visibility of the commercial is on the screen for at least two seconds. 

Masthead Ads

YouTube masthead ads are extremely high-impact ads intended to help brands reach a massive audience in a single day. They appear on the top of the YouTube homepage on desktop or mobile devices. As well, they can only be used with a reservation through Google sales.

Display Ads

A display ad is a desktop-only ad and appears only on a YouTube desktop. Display ads are an effective, customizable and simple way to promote your brand on YouTube. They come in multiple sizes and formats like image and animation. However, they don’t support autoplay sound, so they won’t interfere with the video player. 

Advertisers get charged whenever someone clicks on the ad. Their main advantage is that you can link them to any website, and they will be permanently displayed on the top of the video suggestion. 

Overlay Ads 

Overlay ads are videos that play while you are watching other content. They are displayed at the bottom of your screen, typically without interrupting your viewing experience. Overlay ads can be presented differently than traditional ads, being much more high quality in design and animation. They can be used to engage users through polls, quizzes, and other interactive options.

YouTube Advertising Cost

Why YouTube is the Best Way to Promote Your Business

Complete Freedom in the Advertising Approach 

If a picture is worth a thousand words, then a video is worth a billion. YouTube ads don’t follow strict guidelines and give businesses more freedom to express their brand philosophy. 

You can tell a story and bond with your customers by explaining the purpose of your product and how they are designed to benefit their life. YouTube advertising campaigns are a great opportunity to leave a memorable impression and engage with your viewers. 

More Cost-Effective Than Other Advertising Platforms 

One of the worst mistakes that small businesses make is considering YouTube advertising to be beyond their scope. The truth is the cost of YouTube ads runs very low compared to the other advertising platforms. 

A typical YouTube ad cost is between 10 – 30 cents per view depending on the targeting and video quality, and most importantly, it won’t charge you for viewers that skipped your ad after the first five seconds. With this in mind, you can easily track your budget and measure your success. 

Reach a Vast Audience 

With over 2 billion users watching almost 5 billion youtube videos every minute, YouTube ads are a great way to reach a wide range of customers. 

The more you target, the more you achieve. You can be extremely specific when finding the right customers with YouTube advertising. With each video view, there is the potential that a YouTube ad will be exposed to a potential customer. 

Influence Customer Buying Decisions

Let’s be honest; every time we think of purchasing a certain product, the first thing we do is go to YouTube and look for a product review. According to research, 72% of auto-vehicle buyers, 66% of beauty product buyers, and 62% of smartphone buyers revealed that they made a purchasing decision through Youtube ads. 

One of the main reasons is that YouTube gives a visual experience of how the product would fit their lifestyle. And nowadays, the world revolves around influencers, so having a popular face advertising your product will certainly help you skyrocket your sales. 

Keep Track of Your Advertising Campaign Success 

YouTube gives exceptional insight into all your ads and how they perform with just one click. These metrics are incredibly simple and easy to understand, so you can find out if you are successful or making mistakes even if you aren’t an analytical expert. 

These metrics can help you avoid financial loss by seeing how each ad performs, so you’ll know how to optimize each YouTube ad for conversion. Check our Liquid Digital Conversion Optimization Guide to learn more. 

How to Make the Most of Your Youtube Ads 

Knowledge is Key 

Reaching your desired goals and objectives will require learning more about the analytics of YouTube advertising costs. Understanding the components that make up a successful YouTube campaign includes choosing the right bidding strategies and targeting options to determine the appropriate budget and price. 

Make sure that your ad campaign has clear objectives. Track key performance indicators such as click-through rates, cost per acquisition, conversion, or brand awareness over time to determine whether certain tactics work well for your business.

If you don’t have the time and the courage to do so, you can leave it to a digital marketing consultant.

Focus More on Behaviours and Interests Rather Than Demographics

Age, location, and gender are important things to target, however, why not take a step further and consider their interests and behaviours? A person that regularly visits sailing websites would be a much more ideal prospect compared to someone who just happens to live near a body of water. 

This can help you exclude poorly performing tactics while putting your ad in front of the right people at the right time. 

Use Specific Calls to Action

When creating a YouTube ad, it’s important to use a direct call to action for your potential customer. Avoid generic CTAs like “Click here”. Instead, include a specific offer like a limited one to build a sense of urgency. 

Additionally, adding an end screen at the end of longer videos will drive home the action you want the viewers to take. This can include signing up, requesting more information, or placing an order. 

Stick to Short Video Ads

Make sure you create a short and impactful video that is no longer than 45 seconds. This way, your audience will stay engaged and not be tempted to skip the ad altogether. When creating your YouTube ad, you want to get straight to the point. You’re going to want to capture the viewer’s attention in those five seconds before they move on.

Additionally, ensure that your video has quality visuals and audio. High-resolution images are especially important as they provide clarity in an otherwise noisy environment such as a YouTube mobile homepage or timeline page. 

Create a Youtube Ad Today 

The best way to keep track of your YouTube ads cost is to know how much money you’re spending by regularly assessing different metrics such as impressions, clicks, conversions, and ROI. As you can see, a lot goes into YouTube ads, so you might want an expert to help you reach your business goals. Don’t hesitate and contact our marketing agency today!