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How To Spend Money: Advertising On YouTube


bbender - March 24, 2015 - 0 comments

The tale of an A/B ad campaign with results worth talking about.

As Youtube has grown since the launch of their advertising program (part of google’s Adwords platform) more companies have carved out a piece of their marketing budgets for YouTube. This article is not aimed at discrediting YouTube’s power for marketers (We Love YouTube), rather we would like to share some key tips to avoid flushing a major investment away before you can hit the refresh button on your campaign results.

 

The Campaigns:

We are a data driven culture. We wear fitness trackers, track spending habits on apps, monitor thermostat levels from our phones, etc. We are use to boiling things down to numbers and results. With advertising it’s not always so simple to separate the costs from results (or benefits) of a advertising campaign.

 

Our clients hire us to create, launch & track story driven content. For the purposes of this article we took a very small amount of money and tested its advertising power in a Adwords vs. YouTube arrangement with pre-roll video content we created for one of our customers. Below is a quick break down on our results.

 

Display Campaign Results:Screen-shot-2015-03-09-at-10.38.46-AM

  • 5 banners
  • $200 investment
  • 62,015 total impressions
  • Average CPC .37

274 Total Clicks

 

Pre-roll Campaign Results:

  • 1 video
  • $200 investment
  • 14,605 total impressions
  • 3,065 total views
  • Average CPV .08

 

58 Total clicks

As you can see, the end results are a bit different. On face, the display network seems to have had a better result & you’d be mostly right to think so. With a cost per click hovering around .37 the display network brings home the gold for those who need that onsite traffic!

 

So before we leave you with a bad taste in your mouth towards YouTube, let’s talk about what the advertiser & viewer got with the pre-roll advertising model YouTube provides. With pre-roll, you get something a text link or banner just can’t provide. By now you’re probably noticing that youtube’s manner of advertising is very much the “2.0” of old school cable commercials. With a skip button about 4 seconds away from nearly all pre-roll advertisements, we are getting every single pair of eyes balls (impressions) to see our ad. Think about that for a second…every single time your advertisement plays, the user must make the move to skip ahead. While this may not be the result you were hoping for, it’s more than you’ll get with a link or banner campaign. There is a certain power in forcing the viewer to acknowledge and act every time your ad plays. You’ll know that the viewer is tuned in and watching every time because it’s …Video content & you’ll continually be given the chance to win a “full view” or a click from every single impression. Now for a large online product campaign or flash sale this may be useless. However for the long term strategy, this works 1k times better than the traditional TV commercial or banner sitting in the corner of a webpage, that may be completely ignored.

 

Spending Money:

So how did we spend money on YouTube?  A major force to take into account in this particular Pre-roll campaign is the targeting configuration. We wanted to touch everyone, just like Walmart or H&M might choose for their campaigns. With this style of advertising you should be more concerned with getting the brand message out than a on-site conversion. This is the primary cause of such a low click through rate. Should a small business need to only target a local market, with females 30+ both the CPV and market competition would go down substantially. To avoid blowing through your cash so quickly, be sure to narrow your target viewer down to a scale that fits your brand and message.

Well versed marketers can stop here. Below we will explore online marketing costs and configurations in a bit more detail.

 

CPV (Cost Per View) & PPC (Pay Per Click):

To understand how this happened we must take a look at how YouTube handles your advertising dollars. The traditional method of online advertising started with link ads. We find those scattered through out search engine results and website side bars. In nearly all arrangements, those links would track the amount of clicks flowing through & charge a rate for each click. This style of advertising campaign is often called a “PPC” campaign, or Pay Per Click. In today’s aggressive market it can cost as little as .05 or $10 per click. Higher PPC costs are obviously possible, though we would have to question the effectiveness of a campaign that costly.

 

YouTube has banner placement available under google’s “display network” which will run in a PPC environment. However the true power of YouTube’s advertising network is its pre-roll feature. Pre-roll charges you not only on clicks but also impressions. So where a link ad might be displayed & ignored, a pre-roll will be displayed & charged to the advertiser. Pre-roll is a term that just means content will play before the featured video. YouTube started doing this in 2011 and has since engineered some very clever ways of interaction with its viewers while in the pre-roll. It will be exciting to see how video advertising continues to grow in both popularity among the middle sized business, but also in interactive tools.

 

This by no means even begins to cover the width and range of online marketing options out there, but hopefully we’ve given some insight on how marketing dollars react in specific environments.

 

If you would like to explore this advertising method more, Contact Us.

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