YouTube ads can reach one in three people on Earth -- or, more specifically, 2.56 billion users. That's a more than tempting market for anyone looking to achieve more brand visibility, boost get more leads, improve their conversion rates, and increase their revenue. Running ads on YouTube is not a magic spell, though -- there are YouTube advertising pros and cons to keep in mind before you jump on the trend.
YouTube Advertising Pros and Cons
YouTube Ads generated more than $7.9 billion in revenue for Google, and that's just in the fourth quarter of 2022. Clearly, marketers are considering budget for YouTube -- and there's a long list of reasons why.
The key concept here is “Intent.”
The real reason people consider YouTube is the quality of the searcher's intent and audience. YouTube has proven to have a higher engagement rate because of the intent. For example, an instream ad is a highly specific type of media that is shown on a specific piece of content, triggered by very specific targeting. This, coupled with the right intent, means that lead generation costs decrease, conversion rates increase, and scalability is self-sustainable.
YouTube ads are growing in pouplarity, and not just with marketers. In fact, 59% of consumers believe YouTube ads are more relevant than TV ads. It makes sense: on average, people spend more than 23 hours a month on YouTube (but the stats vary wildly across different countries, with South Koreans spending 40 hours a month on the platform.) With so much time invested in YouTube, it's no surprise that people are likely to click on ads relevant to their interests.
As mentioned before, more than two and a half billion people use YouTube. Although your business may not target all of them, it's quite probable your audience is there, watching a video on YouTube right now.
Please mention the audience types of format types. Refer to content in the blog before, such as contextual targeting, Youtube ads vs Facebook Ads. You can also embed videos for our blog here.
YouTube works with tremendous amounts of data points, as it is owned by Alphabet. This means it shares the same data sets, so you can laser-target your audience based on information gathered from Google Search, Google My Business, your website, or YouTube itself. YouTube audience targeting goes beyond demographics, allowing marketers to target people based on their interests, browsing habits, and more.
This is extremely important because two people who fit the same demographic descriptions (e.g. living in the U.S., aged 40, male) could have very different interests (one could be interested in cars, the other one could be interested in guitars.) YouTube enables you to segment your audience so you can "knock" on the right doors rather than wander aimlessly in a neighborhood of people not interested in what you have to offer.
Because YouTube ads can be laser-targeted, they also tend to create more engagement. According to Google, the average engagement rate on YouTube Ads across industries is between 10 and 15%. By comparison, search ads have an engagement rate between 1 and 3.5%.
Guesswork is not part of the equation with YouTube Ads. The platform allows marketers to track metrics like cost per acquisition (CPA), cost per lead (CPL), time viewed, cost per engagement (CPE), cost per click (CPC), and more. This allows you to analyze and optimize performance in real time, so you can make sure your budget is being used where it matters.
Lower Cost, Higher ROAS
YouTube Ads can be quite affordable, especially when targeting is done right. On average, YouTube Ads have an average cost per view that ranges between $0.010 and $0.030. Considering the high engagement rate, this can mean a great return on investment (ROI) for your business.
Tapping into Emotions
When the first cinema movie came out, it featured a train moving toward the audience. People were so shocked they ran away from the theater, convinced a real train was about to crash into them.
While we don't run away from our phones and tablets when watching a YouTube video in the 21st century, video ads still have an edge over text-based and even image-based ads: it can elicit emotions. No matter what type of business you run, calling to people's emotions is the smartest thing you can do with your marketing: it will create rapport, improve conversions, and help you build a loyal customer base.
Easy Distribution & Repurposing
YouTube ads are straightforward to distribute: you can use them as organic content, you can embed them on your blog posts, you can embed them on your website, and so on. Furthermore, the same video ads can be split into shorter clips and repurposed on other social media platforms like Facebook and Instagram.
YouTube Advertising Cons
While not insurmountable, YouTube ads come with some drawbacks you should be aware of.
YouTube Ads come with a steep learning curve -- especially when you don't have any help. Fortunately, a good YouTube advertising agency can help you translate your ad ideas and message into a powerful YouTube video ad that builds your brand, increases your customer base, and grows your revenue.
YouTube advertising is not a coffee machine: you can't just turn it on and expect the same results, every single time. YouTube Ads performance can be unpredictable because there are so many factors that play a role in success: audience targeting, video content, ad format, and more.
When done right, YouTube Ads can be a powerful tool that takes your business to the next level. When rushed through, YouTube Ads can result in wasted budgets and frustration.
YouTube allows users to skip certain types of ads -- which comes as a disadvantage for businesses who want to get their message out there. The best way to make sure people don't count the seconds before they can click on the "Skip" button is to create engaging ads and refine your targeting so they're shown to people likely to be interested.
The average conversion rate for YouTube Ads is around 1.4%. While this may be lower than other platforms, the high engagement rate of YouTube Ads compensates for the lower conversion rate. Plus, it is worth mentioning this is an average conversion rate -- which means the best YouTube advertisers get numbers that are much better than that. The right targeting and a message that speaks to people at a deep level can make a great difference.
Video production and YouTube Ads can be costly -- or so it used to be, at least. Still, with a creative outlook and a good video agency to partner with you on this journey, creating great ads on a budget is possible. Talk to your agency about ways to lower costs, and make sure you're using your budget in the smartest way possible.
Some businesses complain that YouTube Ads undermine their brand because they cannot control the content that precedes or follows their video ads. For example, a luxury fashion brand could find its ads in between a skateboarding video and a home cleaning tutorial.
The good news is you can avoid this type of situations by using granular placements to ensure where video ads are shown. Furthermore, you can also monitor where your ad is watched using YouTube Analytics and, as an additional safety measure, you can blacklist certain types of content.
Conclusion: YouTube Advertising Pros and Cons
So, in conclusion, should you still run YouTube Ads?
The short answer is "yes." While not perfect (like everything else in life), YouTube advertising pros and cons balance each other out -- and on most occasions, the pros far outweigh the cons. What's more, most of the disadvantages of running YouTube Ads can be avoided with some planning and the help of an experienced agency.
For example, Yugo Media, we’ve created a failproof process to help businesses spread the word and get the attention they need with YouTube Ads. You don't have to take our word for granted on this -- you can watch our customers' testimonials on what working with Yugo Media did for their businesses.