YouTube Ads Most Undervalued Marketing Strategy in 2020

This article is all about exposing the fundamental reasons why YouTube Ads are an undervalued marketing strategy and will continue to be right through 2020. A lot of businesses who have never advertised on the platform before have the misguided view that it’s an expensive channel to get your message out there. Yet the truth is that advertisers have a lot of control and that the YouTube advertising platform is historically cheap by advertising’s standards.

Let us first take a look at some numbers, the average cost per view on a YouTube Ad currently ranges between $0.10 – $0.30 for each view. This is extremely good value when you compare to the fact that you can easily spend upwards of $2 per click across Google Search & Paid Social Media ads. Despite these numbers being the current averages, for each campaign you set a price you are prepared to pay for each YouTube view. It’s not unusual for campaigns to receive thousands of views on your marketing content, whilst paying $0.05 per view. Looking purely at the cost of marketing impressions, there is no doubt that YouTube Ads are cheap compared to other marketing channels.

This is surprising for most, but if you look at the way the platform is setup & the trends behind it then it’s easy to understand why. Let’s take a look at why YouTube is one of the most cost effective marketing channels.

We’re Competing In An Auction Model

Advertising on YouTube involves setting a daily budget you are comfortable with and then selecting how much you are prepared to pay for each video view. When an ad slot becomes available, either through keyword placement or related content then the Google Ads platform looks at which advertisers are looking for a similar placement & the advertiser with the highest bid is often rewarded. This auction model is similar to how a lot of advertising platforms work, such as Google Ads & Facebook. The kicker here is that YouTube is still a relatively new platform which has nowhere near reached its full market potential. Google Search Ads first launched in October 2000 whereas YouTube Ads only really became popular in 2009, that means they are much further behind the curve in terms of bid growth.

Current PPC Ad Cost vs Historical Cost On Popular Categories

In fact, from the above chart we can see that most industries on Google Ads have had their keywords increase by about 200%, since Google Ads first launched. YouTube still has 9 years to run before it hit hits the same level of maturity, meaning you can benefit from historically cheap traffic whilst the platform is still growing.

Producing Strong Video Creative Is Hard Work

Another important point which makes the YouTube advertising platform historically cheap is the fact that there is currently less competition. This is down to the fact that producing professional video content which stands out from the crowd can be expensive & time consuming work. This not only acts as a barrier for new advertisers getting onto the platform, but it also makes it harder for the big multinationals to promote the full breadth of their product range. A huge FMCG company (Fast Moving Consumer Goods) like Unilever is unlikely to create separate YouTube campaigns for each of it’s 400 brands. Without a doubt it can easily afford to but it’s managing the end-to-end creative process which proves unmanageable at scale & stops big brands investing as much as they would like in YouTube. Whereas on the flip side creating simple text or banner ads on mass is extremely easy to do.

Small Businesses Haven’t Flooded The Market Yet

Even though we are 10 years into the YouTube story, it’s still an area where a lot of smaller brands haven’t experimented with yet. If you look at the local businesses in your own neighbourhood:

“HOW MANY OF THOSE LOCAL BUSINESSES HAVE THEIR OWN FACEBOOK PAGES?”

I would hazard a guess at a lot of them, when we are comparing to paid advertising on YouTube it’s likely to be something which they haven’t thought about yet. Small business uptake is another reason why YouTube is a cost effective marketing channel, there simply isn’t the required number of advertisers yet to overshadow the available ad space. Again, if we compare to the historical Google Search Ads, you are lucky if there are four available ad slots at the top of the Google Search results for you to target. With competition being fierce across highly contended keywords, in turn pushing up the necessary price of keywords bids. When compared to YouTube, there are 300 hours of new video content being uploaded to YouTube each minute – ultimately resulting in much more potential advertising space.

The Platform Is Exponentially Growing

Finally, to understand just how cheap YouTube Ads are compared to other channels we need to understand the nature of the platform further. Now almost 5 billion YouTube videos are watched around the globe every single day, with people easily spending up to 45 mins per session. That’s a lot of dwell time on the platform and whenever someone does a new keyword search or views a new video the page gets refreshed – along with all the ads on that page! The World continues to upload an unprecedented amount of fresh content to YouTube, essentially growing the amount of viable advertising space & making it easier for brands to find the perfect video to showcase their own ads against. Ultimately, YouTube Ads will continue to be an undervalued marketing strategy because the amount of new uploaded video content far supersedes the number of new advertisers taking a risk on the platform.

Over time the cost of advertising on YouTube will of course begin to creep up, but right now YouTube remains an extremely cost effective marketing channel. If you are new to all of this and tempted to give it a go we would strongly recommend, it’s easier than you think!