Ads on Youtube might be one of the best and underused ways of reaching your target audience. They can be immensely successful at increasing brand awareness and driving customers to make a purchase!

Table of Contents

  1. Why Advertise on Youtube
  2. YouTube Ad Formats
  3. When Should You Use What Ad Type?
  4. How Do You Get Charged For YouTube Ads?
  5. Who Can You Target on YouTube?
  6. What Campaign Types Drive Sales?
  7. What Creatives Should You Use on YouTube?
  8. How to Create Your First YouTube Campaign?
  9. How to Structure Your YouTube Campaigns?

Why Advertise on YouTube?

YouTube is a major opportunity for advertisers to connect with potential customers while they are browsing content on the internet. According to Semrush

  • In 2021, there are approximately 1.86 billion YouTube users worldwide.
  • Video consumption is one of the most popular ways to consume content, with 85% of U.S. internet users accessing online video through YouTube at least once per week. 
  • YouTube accounted for 21% of global video streaming traffic, closely behind Netflix, which had 26.6% in 2019. 
  • 18% of people use YouTube specifically to follow brands and companies. 
  • 7% use YouTube as a way to strengthen their professional work. 
  • Fashion and beauty-related content such as makeup and skincare tutorials, clothing hauls, and product recommendations are the most popular content on YouTube. 

People visit YouTube regularly and spend significant time watching their favorite content. This ranges from music, gaming videos, product reviews to unboxing videos and much more. Not only can you reach people when they are browsing videos related to what you are selling but you can also target your competitor’s channels and related videos.   

YouTube Ad Formats

YouTube ads are available in several formats:

Skippable In-Stream Ads

This ad type plays before, during, or after videos. The ad viewer can skip the ad after watching 5 seconds.

These are the ads we use most often in a TrueView YouTube campaign. You can create a headline with these ads, which gives more information to the customer about your brand and can create a CTA which will lead your viewer to your website.

Non-Skippable In-Stream Ads

This ad type cannot be skipped and it plays before, during, or after videos. The maximum duration of the ad can be 15 seconds.

This type of ad is best if you have compelling video creatives and you cannot risk the customer skipping the ad without seeing the full message. The short length of the ad means that you need to be concise and deliver your message in the allotted time. Unless we have really good creatives, we rarely use this ad type.  

Bumper Ads

These are 6 seconds or shorter ads that play before a video and cannot be skipped. The short ad duration means that you have to be very creative to make good use of this ad type. You want your video to be as memorable as possible if you want to use bumper ads. We have seen brands use this ad type to show viewers that there is a sale on the website.   

In-feed Video Ads

Formerly known as YouTube Discovery ads, In-feed video ads do not play automatically. They appear in the form of a thumbnail in YouTube search results, YouTube mobile homepage, or alongside related videos in “recommended videos”. This ad type invites people to click on it before the video plays for the viewer.

This can be a powerful ad format because it is based on intent instead of viewer behavior. If a viewer searches for ‘best headphones under $150’ and the first result they see is your ad that’s promoting your $110 headphones with amazing sound quality, it’s going to have a strong impact on the customer. When creating these ads, you also have to write headlines, descriptions, and CTA so you can customize your message to ensure that viewers click on your ad.     

Outstream Ads

These ads are not available on YouTube and they only show on video partners. These mobile-only ads appear on websites and apps in the form of banners, interstitials, in-feed, or native content.

They play automatically on mute when they appear on the screen, but viewers can unmute, scroll past or dismiss when an ad appears.

If you want a large reach on your videos, you can get that cheaply using outstream ads.   

Masthead Ads

These ads are featured at the top of the YouTube home feed. The ad plays automatically on mute and the viewer can choose to unmute them. Masthead ads are only available on a reservation basis so to run this ad, you will need to contact your Google representative.

When Should You Use What Ad Type?

Deciding which ad type to use should depend on what goal(s) you hope to achieve with your YouTube campaign. Skippable in-stream ads are the most popular ad format used by marketers, as they can help to achieve multiple goals. Bumper ads are used to promote sales or communicate information about product launches. Non-Skippable in-stream ads help in communicating messages that you don’t want customers to miss. Outreach ads are primarily used for large reach at a cheaper cost.

Ultimately, you should determine the goal of your YouTube campaign and then decide what ad type you want to use. Here’s a quick guide to help you decide what ad type to choose:    

How Do You Get Charged For YouTube Ads? 

How you pay for YouTube ads depends on the ad format you choose. YouTube allows CPV (cost-per-view) bidding, Target CPA, Target CPM, and vCPM (viewable cost-per-thousand-impressions). 

With CPV bidding, you pay when someone watches 30 seconds of your video (or the full duration of the video if it’s shorter than 30 seconds) or interacts with your video.

CPV allows you to choose how much you bid for a view and with tCPM, your bid determines how much you want to pay per thousand impressions. 

Viewable cost-per-thousand-impressions (vCPM) bidding strategy charges you when someone sees your video play for two seconds or more.

Not all bidding options are available for all ad types.   

Who Can You Target on YouTube?

You can reach your target audience using two methods:

  • Audience Targeting
  • Other targeting layers

Audience targeting

1. Detailed Demographics

This targeting option includes education, marital status, homeownership status, and employment-related options like what industry the audience works in and what’s their company size. The optimal method of using these audiences is to layer them onto another form of targeting. This allows you to hone into your target audience.   

2. Affinity Audiences

These are broad audiences that Google groups people into based on their interests and habits. For example, people who frequently visit the salon, fashionistas, pet lovers, avid news readers, etc all get grouped into affinity audiences. This targeting method is similar to audiences you might buy for offline or TV campaigns.

If your goal is simply reach or increase brand awareness and views, these audiences combined with demographics/detailed demographics will serve your purpose. Similarly, if you are aware that a wide range of people connect with your product, this audience type can help you get upper funnel traffic that you can re-engage later.

3. In-Market Audiences

These are users who are actively researching a product/service and are looking to make a purchase. Google has 18 parent categories, each of which has sub-categories you can also target. For example, if you have a fashion website, Apparel & Accessories is a parent category that you can target in your campaign. If you have video creatives of specific products, like swimwear, you can just target the swimwear sub-category instead of the whole parent category.    

4. Life Events

Using this audience, you can reach people who are at an important milestone in their life. Things like graduating soon/recent graduates, buying a house/recently bought a house, etc…

With this targeting method, your campaign will be much more impactful if you use an emotional hook in your ads. Something that’s specific to the milestone your audience has reached. For example, if you have a food catering business, you can target people who are going to get married and show them ads related to wedding catering.    

5. Remarketing Audiences and Similar Audiences

Remarketing audiences help you reach visitors who have been to your website or engaged with your videos on YouTube. Similar audiences are also called Lookalike audiences on Facebook. The people in these audience lists have shown similar behaviors to your existing customers/website visitors.

Running a remarketing YouTube campaign is a powerful way of reminding people who haven’t visited your website in a while about your brand. You could also offer potential discounts to customers who abandoned their cart.
Using similar audiences is a useful way of targeting cold audiences who may be more likely to make a purchase compared to other prospecting methods.  

6. Custom Segments

Custom segments are a highly useful method of prospecting for new buyers. You can create your own audiences using search queries that your potential customer is likely to search and websites they are likely to visit. A great use case for custom segments is running Competitor conquesting campaigns. 

Other Targeting Layers

1. Demographic Targeting

You can target people based on age, gender, parental status, and household income. By default, all the age ranges, genders, and other options are included. If you know that your product is not going to resonate with a certain demographic, you can choose to exclude that demographic.
Used by itself, demographic targeting is too broad. Unless you have a magical product that is going to appeal to everyone, it is important to layer other targeting methods to your YouTube ad campaigns.

To view Demographics and edit/exclude any, click on Audiences in the left sidebar and you will find Demographics under that section. 

2. Keywords

You can add keywords to your campaign that you think a customer will search on YouTube. This type of targeting is only relevant to in-feed videos/Trueview Discovery videos where the ad displays in the Search results. Google uses those keywords in a broad match. Similar to your search campaigns, your ads may show on search queries that the broad match determines as relevant but might not be completely related to your keyword. 

3. Topics

Using this method, you can decide what type of content your ads appear on. There is a large list of parent and sub-categories that you can select. If you are a car parts reseller, you can choose to show your ads on Autos and Vehicles-related content. Similarly, you can also exclude certain topics to ensure that your ads do not show on content related to them. 

4. Placements

You can choose specific YouTube channels and videos, and in the case of out-stream videos, specific apps and websites where you want your ads to run. An important point to remember is that if you have any other targeting layered in your campaign, Google will not restrict itself to your specified placements.

When selecting placements, this is a message you will see on the page: “Your ad can appear on any YouTube or Display Network placements that match your other targeting.” So if you only want your ads to appear where you have chosen, do not add other targeting layers to your campaign. 

To find these Topics, Placements, and Keyword targeting methods in your YouTube campaign, in the left sidebar, look for Content and expand it. Under Content, you will find Topics, Placements, and Display/Video Keywords:

What Campaign Types Drive Sales?

Are you looking to drive sales? Maybe you want customers to fill out a lead form? If so, Trueview For Action and Video Action campaigns are the best possible option!

Trueview For Action campaigns

Unless you are running YouTube ads for the sole purpose of brand awareness, this campaign type is the most suitable for driving action. This campaign type lets you create ads with headlines, descriptions, and CTAs. You can also add sitelinks or a lead form if you want to capture leads. The primary purpose of this campaign is to make the viewer take an action after seeing your ad. At the end of the ad, there is an auto-created end screen with your brand’s logo and CTA which shows for a few seconds. You can only choose one ad format – in-stream ads or Video Discovery/In-feed video ads. You cannot use both at the same time. 

This campaign also allows you to use the bid strategy of Maximize Conversions or Target CPA.

Google announced that starting early 2022, Google will automatically upgrade all Trueview for action campaigns to Video action campaigns.

Video Action campaigns  

These campaigns use a responsive ad type that can run within both in-stream and discovery/in-feed placements.

Trueview campaigns use standard ad groups whereas Video Action campaigns use Responsive ad groups that combine the ad formats. With the two formats now combined, you cannot be as granular as before, but Google claims that this format is more efficient at driving action.
The second difference between the campaigns is that Video Action campaigns require the ad creative to be minimum 10 seconds long.

What Creatives Should You Use on YouTube?

You cannot upload an ad directly to the campaign as you would for Display or Discovery. For YouTube, the ad needs to be uploaded directly to YouTube. It can be either be public or unlisted, but private videos are not accepted.     

For resolution and aspect ratios, you should refer to Google’s policies. You also need to make sure your ads are high quality and do not violate any of Google’s editorial requirements. Things like unclear, sexually explicit, or copyrighted content will be outrightly refused.

People often ask what the ad length should be and there is no definite answer to this question. You want to focus on your messaging and ensure that it is delivered in a memorable way that customers will find engaging. According to a study done by Google that tested a 15-second cut, 30-second cut, and a 2 minutes long cut, it was found that “the 30-second ad had the highest view-through rate (VTR). In fact, its VTR was 30% higher than that of the 15-second spot.”


However, when it comes to recall, “The 15-second ad was the only one to drive significant ad recall across all three cuts.’

The best length can only be determined by testing and deciding which goals are more important to you; recall or reach.

You want your ad to be the most impactful in the first seven seconds. The creative should capture the viewer’s interest and associate the brand as a solution to the pain point that you have identified. 

Make sure that your ads are designed with mobile in mind, as well. A large percentage of users watches YouTube on their phone so you need to ensure that the mobile viewing experience is great for your viewers.   

How to Create Your First YouTube Campaign?

In this guide, you will learn how to set up a Video for action campaign.

In campaigns, click on “+” to create a new campaign. Choose ‘Create a campaign without a goal’s guidance’ as this option does not restrict your available ad types, unlike other options.

From the available options, choose Drive conversions: 

Name your campaign and select your bidding strategy. You can choose between maximize conversions and tCPA.

Next, set your budget. Google recommends that your budget should be at least 10 times your video CPA if you have chosen Maximize conversions bidding strategy, and between 5-15 times your tCPA if you are using target CPA.

With Video Action campaigns, you cannot specify what networks your ads run on. Otherwise, with Trueview for Action, Google gives the option of targeting YouTube Search Results, YouTube Videos, and Video Partners on the Display Network.

Not being able to exclude Video Partners is a major setback with this campaign type. 

Next, set your location and languages.

In Inventory Type, you can choose between expanded inventory, standard inventory, and limited inventory. Standard inventory is the default option:

You can change it to Limited Inventory if you don’t want your ads to show on any sensitive content.

In excluded types and labels, you can exclude content like live-streaming videos and certain audiences:

In Sitelink extensions, add any sitelinks you want to show alongside your YouTube Ads. You can also attach your Product Feed to show your shopping products: 

Under additional settings > Devices, uncheck TV screens because people who are watching your ad on TV cannot take the action that you would like them to or visit your website: 

Frequency capping is an important option that you should utilize if you don’t want to be the brand whose ads follow the customer all day, all week. 

Next, create your new ad group by naming it and choosing your audience targeting. This is where you can include/exclude demographics and add In-Market, Affinity, Custom Audiences, etc:

After that, you will have to create your Ad. To do that, add your YouTube Video URL. It will load the following interface:

Set the final URL where you want the customers to land after clicking the ad. Add a Call-to-action, headline, long headline, and description.

You can upload a separate image to show as a banner or let Google autogenerate it using the channel banner.

Name your ad and your campaign will be ready.

How to Structure Your YouTube Campaigns?

Your remarketing and prospecting campaigns should be separate as the two campaigns have different goals. In the remarketing campaigns, you can group the audiences based on their behaviors. For example, visitors, cart abandoners, and checkout abandoners can be added in 3 ad groups.

You can also create a remarketing mid-funnel campaign. Such a campaign would target people who have watched your ads or your other content on YouTube. In this campaign, you can also sequence users and lead them to watch a certain video first, then the second video. All with the intention of telling a story.

For prospecting, we prefer to divide our campaigns by the audience types we are using. For instance, if you want to create a competitor conquesting campaign, it should be separate from your prospecting campaign containing in-market/affinity audiences. When you are deciding to create your campaigns, you should think about the goals of the campaign and the potential CPA you would see based on those goals. This will help you to decide whether to separate the campaign or combine it with other audiences.