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The Ultimate Beginner’s Guide to YouTube Ads

Over 30 million people access YouTube every day, and 5 billion videos are watched daily on the platform.

YouTube ads

YouTube videos frequently show up in search results, since YouTube is owned by Google after all.

And if you’re already advertising on Google, via PPC search campaigns or shopping campaigns…

…setting up your YouTube ad will help drive traffic to websites.

If you’re still not running ads on Google, don’t worry, you can still easily run ads on YouTube. We’ll walk you through the setup process later.

And keep reading till the end because we’re showing you how to set up your ads in Google Ads Manager from start to finish.

Today, we’re sharing the ultimate beginner’s guide to YouTube ads including how to set your ads up in your Ads Manager from start to finish.

As we often do, let’s cover some of the basics of YouTube ads before we get into the detailed how-to.

What’s So Special About YouTube Ads?

Well, YouTube is the second most visited website in the world behind its parent, Google. In fact, over a billion searches are completed daily.

YouTube, just like Google, is a search engine.

So like other search engines, the users on the platform often have higher intent to purchase than users on other platforms.

Intent targeting is much easier on YouTube.

And, Google has a huge network of in-market audiences who are just waiting to find what your business has to offer.

Why Do Small Businesses Use YouTube Ads?

On most social media platforms for business, your ads are being viewed by a small portion of your audience.

And even then, only 45% complete 30-second or more watch time.

On YouTube though, 72% of people watch in-stream video ads all the way through.

And, video ads cost on average is between $0.10 and $0.30 per view.

Couple this with the high-intent audience found on search engines like YouTube…

…and it’s an excellent place to share your message and introduce your brand to new people.

How To Know When It’s Time For Your Business To Start Running YouTube Ads?

YouTube ads work great for every business across the board, from local businesses to international businesses.

If you have a video that you can create and a product that you can sell, then YouTube ads are right for you. 

6 Different Types Of YouTube Ads Placements

  1. Skippable in-stream ads
  2. Non-skippable instream ads
  3. Video discovery ads
  4. Bumper ads
  5. Outstream ads
  6. Masthead ads

1. Skippable in-stream ads

YouTube ads

These ads appear before, during, or after a video on YouTube. After 5 seconds, users have the option to skip the ads.

You’re charged depending on the bidding method you choose.

We like to use CPV (Cost Per View) so our clients don’t have to pay as much for uninterested viewers who choose to skip.

This ad placement is the most versatile, allowing you to use this format when you choose a number of goals including:

  • sales,
  • leads,
  • website traffic,
  • brand awareness and reach, and
  • product and brand consideration

This placement is also an option for you if you want to select “no goal” for your campaign.

2. Non-skippable in-stream ads

YouTube ads

These ads appear before, during, or after a video on YouTube and are NOT skippable.

Non-skippable in-stream ads must be 15 seconds or shorter.

You’re charged per impression. The non-skippable in-stream ads use Target CPM bidding.

You’ll choose “brand awareness and reach” for your campaign goal to use this ad format. Or, you can choose no campaign goal.

3. Video discovery ads

YouTube ads

Video discovery ads appear on YouTube search results, next to related YouTube videos, and on the YouTube mobile homepage.

You’re charged when users click your video thumbnail and expand it to watch the ad.

You’ll choose “product and brand consideration” for your campaign goal to use this ad format (or you can choose no campaign goal).

4. Bumper ads

YouTube ads

These ads are 6 seconds or shorter and cannot be skipped. They show before, during, or after a video.

You’re charged per impression. Bumper ads use Target CPM bidding.

You’ll choose “brand awareness and reach” for your campaign goal to use this ad format. Or, you can choose no campaign goal).

5. Outstream ads

YouTube ads

Outstream ads are mobile-only ads and only appear on websites and apps running on Google video partners.

Outstream ads aren’t available on YouTube.

You’re charged when someone sees your video play for two seconds or more.

6. Masthead ads

YouTube ads

These ads play without sound automatically and show up on the YouTube home feed.

These are currently only available if you go through a Google Sales Rep, so we don’t recommend them for most small businesses.

Your ad selection options vary depending on your bidding choices and your campaign goals, so let’s talk about those before we go through and set up an ad.

Bidding And Campaign Goals Go Hand-in-hand

1. If your goal is Cost Per View (CPV) or TrueView

As an advertiser, you’re charged more for TrueView ads. Not all ads on YouTube are TrueView ads, so let’s go over how those are defined, first.

Your ad is considered “TrueView” when users:

  • watch at least 30 seconds,
  • watch the entire short clip, or
  • click on or interact with your ad’s CTA

What’s great about TrueView ads is that if your audience isn’t interested and skips the ad, you don’t pay the higher price for the TrueView.

Since the ads are opt-in, which means you choose to keep watching if you don’t skip, you can experiment with different ad lengths and styles.

You can select the CPV bidding strategy for campaigns with the following objectives:

  • sales,
  • leads,
  • website traffic,
  • brand awareness and reach, and
  • product and brand consideration

Like with other ad placements and bidding strategies, this option is also available if you choose “no goal” when setting up your campaign.

2. If your goal is brand awareness or reach, you’ll use Target CPM

With this bidding type, you’ll only be able to select non-skippable in-stream ads and bumper ads.

You’re paying per thousand impressions.

So when you consider your bidding, remember that you’re selecting the amount you’re willing to pay per thousand impressions.

You can also run ads using Target CPM with no selected goal in Google Ads.

3. If your goal is product and brand consideration, you’ll use Target CPA

The action can be a click or engagement of some kind, and you’re charged when someone takes that action.

4. Maximize conversions

This is a great option to let Google do the work for you.

Google will get as many conversions as possible with your daily or campaign budget.

Now, let’s create YouTube video ads together from start to finish.

If you don’t have a Google ads campaign set up, you’ll want to do that before we move on.

If you’ve got that setup, let’s head over to and get started.

5 Steps In Creating YouTube Ads

Step 1: Create your campaign
Step 2: Figure out your budgeting
Step 3: Do your campaign targeting
Step 4: Set up ad group targeting and create ad groups
Step 5: Start creating your YouTube ads

Step 1: Create your campaign

1. Select Campaigns.

2. Click the plus icon, then select New campaign.

3. Choose your campaign goal:

  • Sales
  • Leads
  • Website traffic
  • Product and brand consideration
  • Brand awareness and reach

Or, choose no goal (we’ll do this so we have more options).

Remember that the goal you select will affect which ad placements and bidding types are available to you.

It’s completely fine to set up a campaign without a goal.

There’s nothing magic behind choosing a goal for your campaign. It just helps guide you in the right direction when you’re new.

4. Under the “Select a campaign type” section, select Video.

Under the “Select a campaign subtype” section, select a campaign subtype. See how each subtype can help you reach your specific advertising goals:

  • Drive conversions: Drive sales and leads with action-focused ads and targeting.
  • Custom video campaign: Customize your settings with different ad types.
  • Non-skippable in-stream: Drive awareness with 15-second non-skippable ads.
  • Bumper: Drive awareness with 6-second non-skippable ads.
  • Skippable in-stream: Drive awareness with skippable ads.
  • Influence consideration: Get people to consider your product with skippable or discovery ads.
  • Outstream: Tailor your ads to phones and tablets.
  • Ad sequence: Tell a story with a series of ads in a sequence.
  • Shopping: Promote your products and get people to shop on your website.

5. Click Continue.

Step 2: Figure out your budgeting

1. Choose your bid strategy. Here’s a quick run-down to help you decide:

  • If views are most important, choose CPV.
  • If you’d rather get views, choose CPM.
  • If you want specific actions, choose CPA.
  • You can also maximize conversions, which means Google will automatically get you the most conversions possible.

2. Enter your budget and decide whether you’d like to spend that daily or for the lifetime of the campaign.

You decide how much you want to spend on the campaign.

And then Google will decide when and how to spend your social media budget, depending on your goals and bidding type.

Google will try to evenly distribute this ad spend over the full campaign.

But, you may see fluctuations from day-to-day depending on traffic and display opportunities.

Google does its best to maintain your daily budget.

Again, you will see fluctuations in ad spend day-to-day.

But Google averages this out over the month and you won’t be charged more than your daily budget total for the length of the ad.

3. Set a start and end date (required for campaign total budget) if applicable.

We recommend setting a daily budget and letting your YouTube ads run without an end date.

Check in weekly to make sure things are working properly and adjust your budget as necessary.

If you’re wondering what budget to start with, we recommend spending a minimum $500 a month on Google Ads (that’s around $16.00 a day).

Step 3: Do all your campaign targeting

1. Choose the placement networks for your YouTube ads such as:

  • YouTube search
  • YouTube videos
  • video partners on the Display Network

2. Select language targeting.

3. Choose geographic locations (like for local businesses or events).

4. Choose any content exclusion settings. If you don’t want your brand to appear alongside certain content, let Google know here.

You can also exclude your YouTube ads from running next to live streaming videos or content labeled for mature audiences.

5. (Optional) Click the additional settings to set up device-specific targeting, limit how frequently your ads show to people, or set up an ad schedule.

Step 4: Set up ad group targeting and create ad groups

1. Define the people that you want to reach with your ads. You can choose from:

With demographic targeting, you can reach people who are likely to be in the demographic groups that you choose including:

  • age,
  • gender,
  • parental status, or
  • household income

Learn more about demographic targeting.

Audiences are groups of people with specific interests, intents, and demographics, as estimated by Google.

2. Narrow your targeting by adding relevant keywords, topics, and placements.

Step 5: Start creating your ads

1. Search for a video that you’ve uploaded on YouTube, or enter the video URL from YouTube.

2. Choose an eligible ad format. You’ll see a message in Google Ads if a specific ad format is not eligible for the campaign.

3. Enter the final URL, which is the landing page you want people to reach when they click your ad.

4. Enter the display URL, which can be a different version of the final URL, or the same as the final URL.

The display URL will not affect the page that people land on when clicking your ad.

5. Enter a CTA, or your call-to-action.

6. Enter a headline, which will appear as the primary line of text that promotes your product or service.

7. Add any tracking URLs here – this one is optional.

8. Add a companion banner to generate an image or a group of images that appear next to your video. Companion banners appear on computers only.

You can select an image that’s automatically generated from the videos in your YouTube channel (recommended).

Or you can select an image that you manually upload as your companion banner.

9. Enter a name for your ad.

10. If the ad looks good, click Create campaign.

It may take a couple of days for you to start seeing your ads. And, optimization of bidding and placement may take a bit longer than that.

In our experience, Google approves video campaigns the same day.

How To Optimize Your YouTube Ads

Let’s quickly go over a few tips from Google for optimizing your videos for sales.

1. Make sure Google Ads Conversion Tracking is set up on your website.

2. Use Video Action Campaigns to make it easy for viewers to engage with your business on places on and off YouTube.

A note on Video Action Campaigns, according to Google:

“Video action campaigns are a simple and cost-effective way to drive more conversions across YouTube.

Video action campaigns take the best features of TrueView for action and scale them to more places on and off YouTube – all in a single automated campaign.”

3. Set up remarketing audiences. These are the best audiences because they’ve already expressed interest in your website.

4. Use custom audiences, customer match, or similar audiences to reach consumers who are already interested, or actively researching your product on Google.

80% of people say they typically switch between online search and video when researching products to buy.

So, high-performing keywords on Search should also work on YouTube.

5. Use audience expansion to reach 20% conversions at a similar CPA to your original audience.

6. Try cross-network reports to help you understand YouTube’s role in the customer journey.

This is a beta program and is not necessary if you’re just starting and aren’t comfortable in the Google Ads Manager.

Wrapping Up

And that’s the ultimate beginner’s guide to YouTube ads.

We hope you found it helpful, and have a better understanding of how to run ads on YouTube now.

Video is the best way to reach new customers, and YouTube marketing is a powerful strategy that reaches billions of people worldwide.

So by using good targeting and creative video, you can find a high-intent audience ready to watch your video and learn more.

Don’t be afraid to start and don’t let fear hold you back.

In fact, we’ve got a video that shows you our at-home studio setups so you can see how easy it is to produce quality videos.

Check that out if you still haven’t seen it.

And if you need more help with marketing your YouTube videos, hire our YouTube promotion services or YouTube SEO services today.

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