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Advertising on YouTube: Understanding the Basics

February 26, 2015 | YouTube

With YouTube becoming the second largest online search engine in the world, 2015 would be a good time to implement them in your online marketing strategy. YouTube generates the majority of its revenue via adverts and offer more ways you can reach your customers than ever before.

After reading this article you will be equipped with enough information to understand the basics of YouTube advertising.

Why you should use YouTube advertising

If you have never thought about utilizing YouTube advertising for your business, maybe these 5 statistics will change your mind:

  1. Online videos accounted for 50% of all online mobile traffic in 2013.
  2. Viewers who watch product reviews are 85% more likely to purchase.
  3. Cisco forecast that 69% of all online consumer traffic will be video in 2018.
  4. 52% of consumers said that after watching a video about a product or service made them more confident in purchasing.
  5. YouTube receives over 1 billion unique visitors each month.

If you need another 45 reasons to get started, then read this.

How expensive is YouTube advertising?

Advertising on YouTube is done using the Google Display and TrueView network. Both use the cost-per-view (CPV) model meaning you’re only charged when your ads are viewed.

YouTube adverts tend to be cheaper than using the AdWords Search Network in terms of price, as some options involves your ads being shown without you paying for them (if the viewer leaves the page before a certain amount of time).

What type of ads can I use on YouTube?

YouTube has four different options to placing ads, they include:


These are video adverts you create yourself and will appear before a particular YouTube video is played. Your ad will be played for 5 seconds after which the viewer has the option to skip your ad or keep on watching.

You will only be charged if viewers doesn’t skip your ad after 5 seconds. In-stream YouTube adverts are used mostly by big name brands who have the resources to make quality video ads.

This is the most powerful way to utilize YouTube ads and is great for building up a brand image.

in-stream ad


Works very similar to AdWords text ads, these ads will only appear when a user searches YouTube. In-Search ads are placed at the top and right hand side of each results page search, and you’re charged only when the viewer watches a video.

in search


Uses the Google Display Network to show your ads. They will be shown within the YouTube video and on other websites that have YouTube embedded videos. These ads will appear at the bottom YouTube video and on the top right hand side of YouTube.


You will only be charged for In-Display ads if the video has been viewed for a certain period of time.

Who will see your adverts?

Much like Facebook and Twitter, YouTube offers you many ways to segment who views your ads. These include:

Demographic targeting – Allows you to segment your audience based on age and gender.

Location targeting – Attract people from a specific location. As you will see from the pictures above the adverts displayed are in Thai. This is because I was in Thailand when writing this article.

Keyword targeting – Using the Google Display Network you can target relevant keywords and your ads will only be shown when people type that phrase into YouTube search. You can see this in the screenshot above, I typed in “bodybuilding motivation” and I was shown an ad relating to motivation.

Topic targeting – If your products are based around a certain topic such as running shoes or mobile phones you can place your ads to be shown on videos that relate only to that topic.

Interest targeting – Whereas topic targeting focuses on a particular subject, interests are bigger groups such as health or gadgets.

Managed placements – Involve your ads being placed on specific YouTube channels. For example, Unbox Therapy is one of the biggest YouTube channels that review gadgets. If your businesses primarily sells electronics, placing ads within Unbox Therapy’s video is an ideal way to reach your audience.

By clicking on an iPhone related video produced by Unbox Therapy lead me to a Mobile News Live advert.  This is a great play by Mobile News Live as they are showing ads to users who are interested in mobiles.


Do keep in mind that popular pages will be used by several businesses and bids will need to be very competitive for your ads to be displayed.

What devices can ads be viewed on?

You can set adverts to be shown on PCs, laptops, tablets or mobiles.

Can you drive people to a website with YouTube advertising?

If your ad is good enough then yes.

YouTube ads can send viewers to your website or YouTube channel. You will not be charged any extra for anyone who clicks your ads as the pricing models works on the cost per-view not cost per-click.

Do I need to create videos to advertise on YouTube?

No – but they will convert better.

You only need to setup a YouTube channel to advertise. YouTube will let you advertise using text based ads or video ads. Video based ads usually have a better success rate than using text ads but they also cost more to produce and run.

Who has had success with YouTube advertising?

A very interesting report by Clickz showed that YouTube is the most efficient social media platform when introducing consumers to new products and services which lead to direct sales. Several businesses have had unbelievable success with YouTube advertising. These include:

Old Spice – A brand that needs no introduction, Old Spice Increased sales of their Old Spice body wash by 107% thanks their social media campaign using YouTube and Twitter. The brand started with TVs ads which after uploading to YouTube went viral.

RevZilla Motorsports – Are an eCommerce store that focuses on selling everything you can imagine for motorbikes. The company created a TrueView in-stream video ad which they hoped would direct users to their website.

Within a few months the video had received more than 7 million views and RevZilla increased their subscriber base by more than 300%. Oh and they also increased their revenue margins by 50% against the previous 3 years of trading. A full case study can be found here.

Dollar Shave Club – Created their YouTube marketing video in 2012 and with the help of the Google Display Network, transformed their small startup into an overnight success. Their ad has been viewed more than 18 million times and received 12,000 signups to their service within 48 hours.

Think YouTube advertising isn’t for your business? Think again.


Advertising on YouTube may be more complex than setting up a Twitter Lead Generation card or a Facebook Ad, but the results can be mind-blowing.

Crystal clear videos can be shot using a GoPro on a budget and become a huge success. With the market research indicating product reviews on YouTube contribute to higher sales, every business should be creating a YouTube marketing strategy to meet the needs of their customers.

If you need any help in crushing online using YouTube, feel free to contact us or leave a comment!

James Dickerson

Founder of CrushCampaigns

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