Why brands are investing in YouTube Ads

Current landscape

YouTube’s viewers are increasingly shifting to mobile. As a result, Google has been working to develop platforms that will permit advertisers to more efficiently reach customers across all devices. Google allows users to use search data for YouTube targeting, YouTube viewing behavior for Search targeting, and is currently developing new algorithms that will allow for conversion-focused Smart Bidding in YouTube campaigns!

In 2014, Adweek reported that YouTube was responsible for “closing the deal” and driving conversions 14% of the time. Wyzowl updated this claim in 2016, reporting that 74% of users who watched an explainer video on YouTube to learn more about a product or service later purchased it.

Google is clearly noticing this trend and, with new opportunities for YouTube advertising, is aiming to capitalize on viewers’ increasing willingness to incorporate video into the consideration and decision phases of their individual buyer journeys.

Why YouTube?

YouTube remains the second largest search engine and the third most frequented site on the Internet. While search advertising is an extremely beneficial tool, a substantial amount of the average user’s Internet use is being ignored – 79% of users’ time online is spent outside of Search. Video advertising creates yet another avenue to reach your customers, because currently search is only accounting for 21% of active users’ time on the web. YouTube has a near-infinite library, with 1 hour of content being uploaded every second and 4 billion videos being viewed each day. It is easy to see the huge opportunity for brand exposure, and research suggests that video campaigns are effective for much more:

• 72% of consumers would rather watch a video to learn about a product than read text on a page (Wyzowl)
• Online videos will account for more than 82% of all consumer internet traffic by 2021 (CISCO)
• 81% of consumers have been convinced to make a purchase after watching a brand’s video (Wyzowl)

Different from standard PPC

YouTube is different from the standard pay-per-click, search advertising platform. The PPC industry is one that relies on being able to see and trace value – clients want to see a distinct return for their dollars, and advertisers want data that proves the effectiveness of their efforts. However, YouTube functions much more as a hybrid of the PPC world and traditional print and broadcast advertising. While it can be difficult to demonstrate a direct correlation between YouTube engagement and a lift in business KPIs – besides logically attributing success when you see improvement during the course of the ad campaign – YouTube ads can provide a number of measurable metrics to help assess the effectiveness of your campaign.

Google Ads allows you to track views, view rate, average cost per view, click through rate, channel engagement, and more. Earned views show the number of people who went on to watch other videos on your channel after being exposed to the first. Earned subscribers are individuals who subscribed to your page within 7 days of seeing your video. Additionally, Google Ads gives insight into keyword search query data to refine the messaging within your ads and save you money by properly adding negatives to your campaign or ad group. Because YouTube is a Google product, you can also track bounce rate, new visitors, and pages per visit in Analytics. You can even trace the conversion path for viewers of your YouTube ad by looking at the Multi-Channel Funnels (under Conversions) in Analytics.

YouTube connects you with a unique audience that other platforms cannot reach to the same extent. In the case of in-stream ads, advertisers are interacting with viewers who have their attention focused on their screen. YouTube users have come to the site specifically to watch videos, meaning that most of them have their sound up and their attention centered on the selected video. Being able to layer targeting based on Google search history means that you will have an even more attentive and qualified audience.

For example, if someone searches on Google for Adidas shoes, then later goes to watch a video on YouTube and sees an in-stream ad for Adidas while waiting for their video, they are more likely to be receptive to the content and view the ad instead of “skipping” it. Because advertisers are charged for views (watching to 30 seconds or the end of an ad) rather than impressions on YouTube, the number of views your ad receives is crucial and the quality of those views is imperative.

YouTube’s cost-per-view pricing structure creates a landscape that other platforms are not able to offer – 100% view-ability for all video ads. Because advertisers are only incurring cost on their views, it behooves them to create their video content accordingly. You want to immediately set the stage to capture your potential consumers and disengage viewers outside of your target audience in order to avoid paying for users who are unlikely to convert.

YouTube ads are also extremely cost effective in comparison to other PPC efforts, and even more so compared to television campaigns. Because YouTube ads are cheaper to run, advertisers have the chance to run “trial” campaigns on YouTube and gauge how the content is received before moving forward with a more expensive TV campaign. This can provide direct feedback on media quality and messaging before committing to a large investment when moving from online video to television.

YouTube Search vs. YouTube Videos

When deciding to run an ad campaign, you must choose which YouTube placements(s) where you would like your ad to show: YouTube search results and/or YouTube videos (with option to include video partners on the Display Network). It can be beneficial in certain circumstances to run different campaigns or ad groups on the two YouTube networks to allow for better tracking of their success. Furthermore, these are placements that will be reaching your audience in different moments so it can be helpful to take a unique approach with each.

• YouTube Search: Shows video ads on YouTube search results pages. You are only able to use video discovery ads.
• YouTube Videos: Shows video ads through the YouTube homepage, watch, and channel pages. You can use all forms of TrueView ads.
• Video Partners on the Display Network: Available for inclusion or exclusion only when targeting YouTube Videos.

Discovery ads are useful to reach users while they are searching for videos about a specific product or service. Well-crafted discovery ads, such as those with a how-to focus, can effectively capture new viewers from the YouTube search results page with a single compelling thumbnail. In-stream ads, which “disrupt” a user’s viewing experience on YouTube or the Display Network, need a compelling start in the first 5-10 seconds to keep viewers engaged past the “skip ad” option. Both in-stream and discovery ads are served as TrueView with cost-per-view bidding, while non-skippable bumper ads (6 seconds or less, shown before, during or after videos) are served with cost-per-thousand-impression bidding. This means you have a large amount of creative flexibility in deciding how, where, and when you are able to connect with your audience—as well as the amount of exposure.

1. How?

TrueView ads can currently be seen in 2 different formats: in-stream and video discovery (formerly known as in-display).

• In-stream: Plays your ad before, during, or after a video. The viewer is given the option to skip after 5 seconds. However, no charge is made if they do not click the ad or watch for at least 30 seconds (or the full length of the ad if shorter than 30 seconds).

• Video discovery (in-display): This option will promote your video on the YouTube search results, beside a video in the watch page section, on the YouTube mobile homepage, and on any video partners’ sites within the Display Network. You will be charged only when users click the thumbnail to watch your video.

2. Where?

YouTube differs from traditional forms of advertising when you examine the environment where consumer reach occurs. Over 50% of YouTube views occur on mobile—and that number is on the rise. This means you are reaching consumers at every turn of their life—in the house, on the way to work, in bed before they fall asleep, while they are out with their friends, and even in the restroom. YouTube ads have an ability to constantly interact with consumers in a way that no other platform can. Their reach is unparalleled, and if used correctly, can be a key component to your campaign’s success. Through Google Ads, you can specify where you want to engage with your viewers. By adjusting device bid modifiers, you can make your ads show up more on mobile vs. tablets or computers, or any combination of the three that best suits your needs. Likewise, bids can be adjusted for location, age, gender, parental status and income levels. This is an advanced targeting strategy that allows you to capitalize on the expanded reach the YouTube ad platform gives you.

3. When?

As everyone in the advertising industry acknowledges, all audiences do not behave the same. Some individuals might be more receptive to an ad in the morning, while others may be more inclined to engage at night. The same may be said for the time of year. Advanced targeting settings allows you to capitalize on times you feel your audience will be more active. Advertisers are able to set start and finish dates for their campaign and select times of day that they want the ad to run.

4. Exposure

In addition to making sure you reach the right audience, YouTube campaign settings give advertisers the ability to set daily limits on impression frequency. This helps ensure that a customer is not getting over-exposed with multiple views of the same ad in a given time frame.

Another method TrueView ads have for controlling audience exposure is within the “Budget” section of campaign settings. When establishing or editing your budget, you can choose between two delivery methods. The standard delivery shows ads evenly throughout the day while accelerated delivery shows ads as quickly as possible until daily budget is depleted. The latter can be beneficial if you want to pair your video ad with a news event or want to drive engagement early in the day, though it can also restrict your exposure during evening hours and cause missed conversions if budget is limited.

What’s Next?

Google has worked hard in recent years to improve transparency and targeting for YouTube video ads, but they are not done yet. Next on the agenda is to grow adoption among advertisers by demonstrating YouTube’s ability to drive quality conversions.

Following the TrueView for Shopping ads and other updates that make YouTube increasingly friendly to ecommerce advertisers, Google is now tasked with creating new opportunities for lead generation through the YouTube platform. Initially, this will first require a focus on delivery, with Smart Bidding strategies expanding into video just as they did for display campaigns. Farther down the road, we may also see Google follow in the footsteps of Facebook, with new ad types or extensions added for video (i.e. lead forms fully hosted on YouTube, “remind me later” prompts, etc.) that will continue to reduce conversion barriers and allow viewers to quickly accept offers without ever leaving YouTube to visit a company website.

Closing Thoughts

YouTube is already one of the top ad platforms and its reach and capabilities are continually growing. In the current, fast-paced, mobile-heavy market we live in, it is no longer a question of whether or not you should include YouTube video campaigns in your online ad strategy, but rather a question of which approaches you should use to support your YouTube and video content strategies. The reach is too large to ignore, the cost is too reasonable to pass up, and developing attribution models are transforming YouTube campaigns from an awareness tool into a full-funnel platform with traceable impact on your company’s bottom line.

This piece barely grazed the surface of all that YouTube advertising is capable of. However, it has presented an overview of how and why it is a crucial component to be incorporated into your strategy. YouTube ads are increasingly becoming a vital part of pay-per-click advertising. If you do not begin utilizing these tools, your brand is now at risk of falling behind the competition. On the other hand, innovative and forward-thinking brands who take advantage of this unique advertising vehicle will become ever more recognizable to the endless number of YouTube users with whom they connect.