Digital Marketing 101: How Do YouTube Ads Work?

Why Use YouTube Ads?

Consumers Can’t Get Enough of YouTube

If you use the internet in any shape or form, you most likely visit YouTube -- and you’re definitely not alone. According to Pew Research, YouTube is the most popular online platform in America. With over 74% of adults who use YouTube in the U.S., there’s a huge chance that most of your business’ target audience can be found on YouTube. 

Impressed by these numbers? YouTube is just getting started! Currently, eMarketer predicts the number of U.S. YouTube watchers will increase to 228.1 million by 2024, up from 214.9 million in 2020. 

Long story short, if you’re not using YouTube ads, you could be missing out on an excellent opportunity to reach your target audience with engaging video ads as they view their favorite YouTube content. 

YouTube Users Are Highly Engaged Across Multiple Devices 

Of all the digital video platforms out there, YouTube is the most-used digital video platform in the United States -- and it’s not just popular on mobile and desktop devices. 

This year, eMarketer estimates that 95.4% of U.S. OTT video viewers will watch YouTube at least monthly, beating the ever-so-popular Netflix at 74.9%.If you’re wondering how this happened, there’s no doubt that the pandemic has played a role in skyrocketing rates of YouTube viewing and accelerated the trend of watching YouTube content on TV screens.

Now that you know most people watch YouTube, how much time are viewers actually spending watching YouTube? On average, viewers ages 18 and older will spend 41.9 minutes each day on YouTube. This includes all devices, from mobile, desktop or laptop, as well as CTV.

YouTube Ads Drive Better Business Results 

YouTube ads aren’t just great for driving awareness -- they can also make a major difference in the number of consumers who convert to customers. 

A 2020 Google study reported that 70% of viewers bought from a brand after seeing it on YouTube. Yup, you read that correctly. The numbers speak for themselves!

Want to see firsthand examples? Be sure to head over to our success stories page to see how we’ve used YouTube marketing to grow our clients’ businesses.



Effectively Reach Your Target Audience 

YouTube is the number one digital video option when it comes to creating highly targeted campaigns. This is a major plus for brands and businesses looking to hone in on their ideal potential customers -- and it also means that every ad dollar spent will go to good use toward relevant users. 

If there’s a segment you want to target, chances are you can find what you’re looking for within YouTube’s targeting options. From demographics such as age, gender, parent, interests, keywords, household income, and more, YouTube also offers options that are unique to the platform. 

For instance, you can also choose to target by specific YouTube topics, target by individual channels, creators, and more. 

Overall, YouTube is unmatched when it comes to its targeting capabilities. This also makes it a perfect platform for reaching multicultural audiences in their preferred language. Learn more about the importance of multicultural marketing and why you should be reaching Hispanic audiences in our post.

Plus, check out our Hispanic digital marketing case studies to see more information on the topic. 



YouTube Ad Formats and Best Practices 

On the surface, a YouTube ad is any video ad that plays within a YouTube video -- but did  you know that there are four main ad formats available for YouTube ads? 

Since each format consists of different lengths and locations within a YouTube video, choosing the right ad type is essential for ensuring you run successful YouTube ads. Learn more below! 



Skippable In-Stream Ads 

Skippable in-stream ads, also known as TrueView ads, are the original video skippable ad format that is placed before a video begins, and have an accompanying banner on the right. While the maximum length is 3 minutes, most ads will benefit from being shorter than that, with 12 seconds being the minimum recommended length. 

If you use a CPV bidding option, which is the default option, you will be billed after a viewer has watched 30 seconds of your ad. Alternatively, if you choose the CPM option, you will be billed according to the number of impressions your ad receives. 

This format is ideal for videos that tell a compelling story about your brand or business that aligns with the interests of your target audience. Because these ads can be skipped at any time,captivating videos that can effectively inform your audience of your offerings are key. 

Non-Skippable In-Stream Ads (Pre-Roll Ads)

Non-skippable ads that appear before, during, or after a video are called pre-roll ads. These quick ads can be up to 15 seconds long, and do not include a companion banner. Other than a website link to visit a brand or business’ page, there is no call-to-action. 

Paying for these ads is done on a CPM basis according to how many impressions are garnered. These ads are perfect for quick and efficient messages -- every second counts! 



Bumper Ads 

Bumper ads are short non-skippable video ads that are 6 seconds or shorter. These ads can occur before, during, or after YouTube videos, and billing is done according to impressions.

With such little time, bumper ads can come in handy if you want to build upon multiple ads within a campaign and increase anticipation among viewers. 

TrueView Video Discovery Ads 

Also known as in-display ads, video discovery ads are located within the YouTube platform that advertises one of your business’ videos or campaigns.

Users that decide to click through on the ad will then watch a particular video -- without leading to a landing page. For this reason, you pay for clicks to garner views on a CPC (cost-per-click) basis. 

These ads have a minimum video length of 12 seconds, and can be placed next to related videos or within the YouTube app feed or home page. If you’re aiming to grow your reach and connect with narrowed down audiences, this format can be a great option. 



How to Get Started with Digital Marketing 

While YouTube ads can be highly effective, they can only be as effective as your overall digital marketing strategy. 

It’s not just about choosing the YouTube ad type that makes the most sense for your business objective. Using effective marketing and creative messaging that is both relevant and engaging for your viewers is also just as important. 

If you’re interested in getting started with YouTube ads and/or digital marketing as a whole, feel free to contact one of our expert digital marketing consultants or find a location near you for more information.

No question is too big or small -- we look forward to hearing from you!