How Much Do YouTube Ads Cost in 2022?

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How Much Do YouTube Ads Cost in 2022?

It’s no secret that digital advertising prices are on the rise across the board–and YouTube ad costs are no exception. As demand increases on major paid media channels like Meta, TikTok, Amazon, and Google, digital marketers are reshuffling their budgets to ensure they spend their marketing dollars as efficiently as possible while diversifying their paid media mix.

The reasons for the bump in ad costs are complex and plentiful, but mainly boil down to an increase in the competition to win consumer attention as e-commerce continues to skyrocket following the Covid pandemic, and the digital marketing platforms that help promote them follow the same trajectory. 

What’s more, thanks to the privacy-first data implications of Apple’s iOS 14+ rollouts–where App Tracking Transparency (ATT) allows customers to opt out of data tracking–the pixel-tracking once relied upon by advertisers to track consumer behavior has caused audience pools to dwindle, thereby limiting the real estate for which a brand’s ads can enter an auction. This has hit Facebook perhaps the hardest, incentivizing marketers to diversify their marketing mix to allocate for more reasonably priced and increasingly popular platforms like Youtube and TikTok.  

Despite the rising costs, we are happy to report that advertising on YouTube in 2022 is very much still affordable for newer and smaller brands alike. However, marketing dollars spent on YouTube ads are most efficient when a strategic media buying strategy is put in place. This is why working with a best-in-class YouTube advertising agency like MuteSix is critical to ensuring every marketing dollar spent on the ever-evolving video-sharing platform is one that is well spent.

What You Need to Know About the Cost of Advertising on YouTube

The cost of YouTube ads in 2022 depends on a variety of factors such as competition, ad format, watch time, targeting mechanisms, and campaign objectives. That being said, as of mid-2022, the average Cost per Click (CPC) for YouTube ads hovers around $8.00, while the average Cost per View (CPV) is $0.06 and Cost per Mille (CPM) nets out at $11.50.  

The cost of YouTube ads tends to vary due to the bidding mechanism used by the platform to select and place ads. Brands bid against each other in a race to win the best placement. You can set your maximum bid ahead of time, and let the system do all the work, ensuring that you don’t spend more than is necessary to meet campaign goals relative to your marketing budget. The good news is that YouTube won’t end up spending more than is necessary to win the bid. 

Additionally, there are different sizes and formats of YouTube ads from which to choose. Naturally, the larger the ad, the more it’s going to cost you. There are also different watch time pricing options where you could end up paying more for a user watching 30 seconds of your ad versus just 15 seconds. Finally, you can expect to pay more money on YouTube ads if you’re trying to target a very competitive demographic for which other brands are fighting. 

What Are the Benefits of Advertising on YouTube and Is It Worth the Cost?

Although the cost of advertising is currently on the rise on YouTube, it’s largely worth the cost if you do it right. Here are some of the benefits of advertising on YouTube that make it worth the investment:

  • YouTube offers massive reach: YouTube, which is now the second-most-used social media platform,boasts more than 2.6 billion users worldwide. However, YouTube doesn’t just have a high number of users–it also has the unrivaled levels of engagement necessary to boost brand awareness, as well as customer acquisition, retention, and conversion. In fact, the platform’s two-billion-plus users watch nearly five billion videos on a daily basis, totaling an astounding daily total of one billion hours. 
  • YouTube generates revenue: As short-form video formats continue to boom in popularity in a post-TikTok era of digital advertising, the user base of views has also skyrocketed, as thus so too has the return on investment for brands marketing to them. Revenue generated is yet another area where YouTube really delivers, generating nearly $7 billion in net advertising revenue in 2022, which has increased dramatically over the past several years.
  • Video ads are more effective: Thanks to the unstoppable growth of video-sharing platforms like TikTok, video ads on YouTube have proven more effective and engaging than photo ads. By leveraging the latest-and-greatest video content creation tools and trends, more and more videos are compelling users–who later convert to customers–to stop the scroll and consume hours of engaging video content that tells a brand’s story and promotes their products in ways static photos simply cannot. 
  • YouTube offers powerful targeting mechanisms: Perhaps one of YouTube’s greatest strengths comes from its targeting capabilities. Owned by Google, YouTube has a wealth of user data at its fingertips, which allows marketers to strategically target audiences so that their content is not only viewed but consumed by the high-intent users most likely to complete a purchase. For example, brands can target prospective shoppers on YouTube through demographics, life events, affinities, keywords, topics, and placement. YouTube also allows brands to retarget and remarket to individuals who have interacted with their content in the past. 
  • YouTube offers Google Ads reporting for robust data insights: YouTube’s access to consumer data and insights is unprecedented. When you advertise on YouTube, you gain access to a wealth of consumer shopping behavior data that can and should be leveraged to help optimize campaigns to maximize results. With Google Ads reporting, marketers can capture a real-time snapshot of campaign metrics, including but not limited to impressions, views, engagement, clicks, and more.
  • YouTube boasts a powerful algorithm to ensure relevant videos are watched. The YouTube algorithm is powerful, analyzing user behavior so as to recommend videos that users are most likely to watch based on past viewing behavior. When a YouTube video ends, the video-sharing platform suggests similar content that is so relevant, over 70% of viewed content is a direct result of YouTube’s advanced algorithm.
  • Its all-new YouTube Shorts capitalizes on the boom in short-form video content. Thanks to the explosion of TikTok, authentic, engaging lo-fi (that’s to say non-studio-produced videos often shot on iPhones) User Generated Content is becoming the rule rather than the exception. Case in point: YouTube released YouTube Shorts globally in July 2021, and has amassed over five trillion views since its rollout.

What Are the Different Advertising Formats on YouTube to Consider?

As you now know, YouTube advertising costs vary depending on the ad format, but the return on investment is massive with 70% of viewers saying that YouTube makes them more aware of new brands. Below are a few of the different ad formats available on YouTube.

  • Skippable in-stream video ads: This is the most common and the most effective ad format that plays before or during a video with the option to skip after five seconds. You don’t pay for skipped ads. 
  • Non-skippable in-stream video ads: These ads play before or during a video but cannot be skipped. These ads are typically between 10-15 seconds long and you pay for each one. 
  • Display ads: These ads show up on the right-hand side-bar while a video is playing. 
  • Discovery ads: These ads place your content at the top of the search results list depending on certain keywords.
  • Overlay ads: These pop-up ads take up the lower 20% of a video while it’s playing and can be exited out. 

How to Launch a YouTube Advertising Campaign That’s Successful and Cost-Effective

In order to launch a YouTube advertising campaign that’s successful and cost-effective, brands should work with a best-in-class YouTube advertising agency like MuteSix so as to leverage the platform’s ever-evolving suite of new capabilities and optimize media buying and creative strategies for maximum success. At its most basic, launching a YouTube advertising campaign involves following a few important tips and tricks:

  • Know your marketing objectives and business goals–whether that’s brand awareness, brand engagement, or increasing revenue. 
  • Know your target audience and come up with a complete buyer persona that includes what they care about, what they dislike, what motivates them, etc. to better reach these audiences and deliver content that resonates with them. 
  • Create engaging content that stops the scroll and adds value to the viewer. Your content needs to draw them in within the first few seconds to entice them to watch the entire ad. It should feature compelling messaging in order to incentivize them to complete your call to action. For guidance, there are plenty of best-in-class tips and tricks to follow to ensure you turn your brand into a YouTube sensation
  • Extensively A/B test your content before launching to determine how effective it is before putting money behind it. 
  • Track your campaign throughout its lifetime to ensure that it effectively aligns with the customer journey, ultimately compelling viewers to click over to your site to complete a purchase. After running your ads and tracking its efficacy, don’t be afraid to make pivots in strategy along the way should performance not be optimal.

Why Work With a YouTube Advertising Agency?

Leaving a mark on YouTube is definitely a challenge for brands that have grown accustomed to static image ads or other marketing platforms. While the competition to create video ads compelling enough to convert viewers into shoppers grows more difficult as competitors in the video-sharing space continue to increase in number and redefine users’ expectations. To ensure you’re tapping into the latest trends and ideate, test, and optimize video content backed by data, work with a YouTube advertising agency like MuteSix.

That being said, not all YouTube advertising agencies are created equal. If you’re enlisting media buying and creative services to help scale your advertising efforts on YouTube and exponentially grow your business, opt for an agency with a dedicated team of Google and YouTube advertising specialists like MuteSix. As the leading performance marketing agency for DTC brands, MuteSix is able to manage marketing budget, allocate spend, and produce the winning content necessary to attract customers through the marketing funnel. In other words, MuteSix can help you run YouTube ads optimized to reach the right users with the right content while using YouTube.

When you work with MuteSix, we take you through the entire YouTube advertising process from start to finish. We start off with a thorough audit of your brand and provide feedback on any existing video content. From there, we develop a media-buying and creative strategy to align with your marketing budget and meet your business goals. After that, we perform extensive research to learn more about your audience and determine the best ways to reach and convert them. Finally, we implement industry-leading ad unit and bid strategy testing before optimizing your creative and scaling your ad spend. 

MuteSix’s YouTube content garnered 362 million views in 2020, translating to more than one million purchases. Consider, for example, our finance app client Dave. Through our advanced Google / YouTube strategy–which consisted of a unique Universal App Campaign (UAC) segmentation, adoption of UAC video beta, creative A/B testing, and optimizing for downstream events–we increased iOS install volume by a staggering 500% in just three short months, while not only maintaining, but decreasing cost per install.

Final Thoughts on YouTube Advertising in 2022

YouTube advertising in 2022, though currently rising in cost due to a number of factors affecting all paid media channels in a post-iOS 14+ world, remains an extremely cost-efficient solution so long as you fine-tune your media-buying and creative strategies. One of the best ways to get the most bang for your buck on YouTube is to work with a best-in-class YouTube advertising agency like MuteSix. So, before you dismiss YouTube as a paid media channel to grow your business due to perceived high costs, reach out to us for a complimentary consultation so that we can show you how priceless the results can be when implementing industry-leading strategy on YouTube.





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