ArticleUnlocking + Scaling YouTube Ads
The Case For YouTube
As a user, YouTube is one of my two favorite social media platforms (the other being Twitter/”X”) – largely due to the staggering combination of depth and breadth of content. No matter how obscure the topic, I can find a half dozen (or a few hundred) videos on the platform discussing that topic from every conceivable perspective, alongside tangential discussions on key points, and just about everything in-between. There are approximately 14 billion (with a “b”) English-language videos publicly available on the platform (source) – nearly 2 for every person on the planet. Every hour, there are more than 300,000 hours of video uploaded to YouTube, with somewhere around 1 billion hours of video content consumed per day across the platform.
Put simply: there is no other place on the internet where users can easily find the sheer magnitude and diversity of content on YouTube. What makes this even more impactful is the fact that YouTube is (broadly speaking) the most Paula Dean platform out there: it’s likable. It’s used by everyone from teens trying to figure out how to do homework, to tradesmen working on a niche problem, to professionals seeking information or entertainment, to retirees watching Judge Judy clips (which are surprisingly popular, who knew?).
For marketers, it gets better: The average US YouTube user spends about 46 minutes per day on the platform – about 25% less than the sum of time US adults spend on Instagram (~33 minutes) and Facebook (~30 minutes) per day – but the total ad spend on YouTube is a minuscule fraction of what is spent on YouTube:
If you were to sum this up into a single point, it is this: YouTube is the most under-valued impression on the web today. Period.
Yes, more brands are more willing to invest YouTube, but the sheer volume of content + the growth of the YouTube audience across the platform (Shorts, Feed, YouTube TV, YouTube Connected Devices, etc.) has out-paced advertiser investment, to the point where YouTube CPMs are effectively flat (inflation-adjusted) over the last few years:
CPMs for 2024 (not included above) are averaging between $10.50 and $16.00 in our (limited) datasets, which jives with the above. I genuinely believe that most marketers don’t appreciate the scale of the untapped YouTube opportunity.
YouTube’s Competitive Advantages
As I’ve had conversations with dozens of CMOs, executives, agency owners and smaller brand owners, one question kept coming up: what makes YouTube better than Meta or PMax or TikTok or whatever? What’s the key advantage that you believe justifies making the investment on the platform now? Essentially: what’s changed?
For me, this boils down to three distinct advantages that are unique to YouTube:
Advantage #1: Unique Targeting Options
If you’re a fan of the bygone era of granular targeting (the days before match types died), YouTube is right up your alley. In auditing hundreds of YouTube campaigns, I continually see brands limiting themselves and their campaigns by not taking advantage of all the options available to them:
- Standard Demographics – YouTube offers the same demographic targeting options you’ll find in Google Ads – age, gender, education level, income decile, etc.
- Behavioral Audiences – affinity audiences, in-market audiences, remarketing audiences. These are a clear step up from the demographics in that they more accurately capture users interests (affinity) and buying proclivities (in-market), but they’re still relatively vague.
- Specific Placements – where things start to get exciting (at least, for me) is the ability to target specific videos and channels. The vast majority of campaigns don’t do this, simply because either (a) the assets don’t exist to properly leverage that targeting and/or (b) the advertiser hasn’t done the research to identify the right channels/videos. This is a huge missed opportunity in many cases – after all, who wouldn’t want to appear in front of an individual actively seeking information about a problem you solve or a solution you provide? What brand wouldn’t want to reach individuals viewing competitor content with a comparison/alternative message that immediately positions your brand as a viable alternative / in the consideration set for a purchase/lead/opportunity?
Yes, there’s a lot of legwork required to execute this type of campaign – there’s research, there’s creative strategy, there’s identifying and communicating meaningful points of difference or counter-offers – but, at the end of the day, that’s the cost of seizing an opportunity. What makes this all the more challenging is the dynamism of YouTube – there are millions of new videos uploaded every day. You can’t simply do the research once and forget about it for a year; you must continually update placements to ensure your ads are showing on the videos your audience is watching now (vs. 3, 6, or 12 months ago). - Custom Segments, Combined Segments + Audiences – finally, there are Custom Segments + Combined Segments + Audiences (all different things – which is delightfully confusing). These are used by less than 1-in-10 YouTube campaigns I’ve audited – but the opportunity they present is massive.
A custom segment uses up to four inputs: searches on Google.com or YouTube.com (this is only for campaigns running on Google properties; on non-Google properties, they are treated as interests/purchase intentions), interests + purchase behaviors, similar websites (this targets users who browse websites similar to the URLs inputted, but does NOT mean your ads will necessarily show on those inputted URLs), and similar apps (this targets users who have downloaded and use apps similar to the ones inputted, but does NOT mean your ads will necessarily show on those inputted apps). Thus, if you have a list of keywords that an audience segment frequently searches, you can build a custom segment using those keywords, then leverage that to target YouTube ads. A good place to start is to create custom segments using the keywords contained in each ad group of your existing search campaigns – with additional refinement (if necessary) by audience.
Where things start to get fun are the combined segments – these allow you to use your customer segments like legos, combining and/or excluding them to create layered audiences. This is incredibly helpful if your goal is to create an audience of people that may have searched for BOTH a problem/use case AND a competitor – indicating they are actively searching for a solution similar to what you offer. Similarly, if you’re running ads for a plaintiff’s attorney (i.e. car accidents), you might layer a custom segment of people who search for a car accident injury lawyer with a custom segment of common-but-significant car accident injuries or post-accident informational queries (best body shops, how to file a car insurance claim, what to do after a car accident) – with the resultant audience providing a universe of people who were likely in an accident AND are now considering their options. This is just one example, but it doesn’t take much imagination to see how this could be incredibly useful for virtually any brand – from SaaS to financial services to fashion, eCommerce, senior living, automotive, home services and more.
And last (but not least) are Audiences, which allow you to blend Custom Segments (but not custom combinations) with Google data (interests/behaviors), your business data (i.e. customer lists, remarketing lists, YouTube channel subscribers, etc.) and demographics (include/exclude).
It doesn’t take much imagination to see how savvy marketers can use YouTube’s unique blend of audience + placement targeting to reach highly specific audiences at unprecedented scale. This is all the more exciting when you remember that YouTube is still a Google product – meaning that YouTube ads can leverage Google’s vast user and behavioral data to better inform ad placement + targeting. Given the surge in popularity of YouTube, alongside Google’s ongoing dominance in search, productivity (Google Workspace, Gmail, Docs, Drive), browsers (Chrome), operating systems (Android) and analytics (GA4), I don’t believe it is a stretch to say that YouTube’s ad placement algorithm can be (if it isn’t already) as good as Meta’s in short order.
Advantage #2: Placement Diversity
Most of our clients are running campaigns across three core placement types on YouTube: Shorts, In-Feed and Skippables. One of the core mistakes YouTube advertisers make is failing to appreciate how each of these three placements works together to access, convince and convert your target audience(s).
YouTube Shorts
Shorts are YouTube’s response to TikTok and IG/FB Reels – they’re vertical-only, short-form videos. Since Shorts were rolled out, they’ve become an essential component of the YouTube ecosystem, amassing ~2B MAUs and in excess of 70B daily views. As with Reels + TikTok, Shorts come with 100% share of voice at the outset of the ad (i.e., it isn’t competing in a feed with other paid/organic results – the only thing a user sees is your ad).
This social-esque dynamic comes with radically different creative demands than most brands are used to (especially on YouTube) – which is why my recommendation for advertisers already on Meta or Tiktok is to start with the same ads they’re using on Reels/TikTok on Shorts – ideally, the more, the better. Just as with Reels, Shorts is as much a volume/power law game as it is a quality game, and if you don’t have a critical mass of video content (a minimum of 5-10 shorts per month, per audience), it is extremely difficult to maximize this format. My best advice is to treat Shorts ads as you’d treat social ads (this does cause issues with teams/agencies, as it represents a radical departure from how most Google Ads people tend to approach creative).
Skippable In-Stream Ads
If Shorts are the new kid on the block, Skippables are the OGs – and I absolutely love them. Skippables are the bread-and-butter of most YouTube campaigns because of their combination of precision + versatility – they serve before or during another video (see placement targeting above), and, as their name suggests, provide the viewer with the option to “skip” the ad after 5s. While that might not sound like a great thing up front (especially to advertisers used to getting non-skippable 15s or 30s videos), it does come with some upside: the ad itself doesn’t have limits. Your video can be 120s, 240s or 500s+ long, and as long as the user doesn’t hit that “skip” button, it’ll keep playing.
Adding to Skippables’ tantalizing upside is the ability to deploy ad sequences, which allow advertisers to craft longer, more robust experiences for users. These can be as simple as showing one ad to everyone, then serving a different ad (perhaps one that speaks to benefits, or that highlights the product/service in action) to those users who watched at least 30s (a “view”) of the original ad. Alternatively, an advertiser might serve ads with different hooks to those users who skipped the original ad, or serve a sequence of ads to capture their attention, educate/inspire, and urge them to act. Whatever method(s) you choose, it is abundantly clear that ad sequences are one of YouTube’s “hidden treasures” that more advertisers should use.
While the upside of Skippables is staggering, it is worth remembering that these ads serve before or during the main content (i.e. the video the user actually wanted to watch), so action metrics (CTRs, CVRs) are likely to be lower than you’d like – this is simply the result of users watching your video, then resuming their content. Where Skippables shine is the overall brand lift, as well as in the ability to leverage multiple ads in sequence to tell a story and drive awareness, interest and action.
In-Feed Ads
YouTube’s feed ads are another relatively new addition to the YouTube advertiser’s toolbox, having rolled out in late 2021 as “Discovery” ads.
At their core, in-feed ads are a discovery engine that leverages one of YouTube’s greatest strengths – namely, the platform’s position as an entertainment & education hub – to help advertisers unlock new audiences. YouTube In-Feed ads are fundamentally similar to Meta’s in-feed ads, with the primary differences being (a) targeting options; (b) data available; and (c) cost. I’ve consistently observed CPMs for In-Feed ads to be substantially lower than competing platforms like Meta and TikTok – often by 30%, 50% or more. The combination of audience size, targeting options and cost is something that harkens back to Facebook back in 2013/2014.
Since these are a relatively new placement, I do see a number of issues in how they’re being used. If you want to get the most out of your in-feed ads, I recommend:
- Run CPV w/ longer ads – Cost Per View (CPV) charges you for each view (30s); using a longer ad maximizes the value to the advertiser.
- Heavy Creative Rotation – do NOT shy away from running a LOT of ads, particularly ones with different hooks/intros. In-Feed Ads auto-play, so having variety in your intro can help you identify which hooks are resonating with which audiences.
- Supporting Assets – ensure your headlines, descriptions and thumbnails are tailored to each ad (don’t just copy-paste – take the time to tailor each one to each video)
- Focus on YouTube – eliminate display/video partners; you want 100% of ads being delivered on Google-owned properties in order to take advantage of the data/targeting and the user mindset (i.e. users come to YouTube to watch videos; this likely isn’t true on other sites).
Advantage #3: Neutral, Expanding, Ready-To-Learn Audience
While most platforms tend to see audience clustering (i.e. Snap tends to over index toward Gen-Z; Facebook tends to over index to older millennials and Gen-X, etc.), YouTube does not have this to nearly the same degree. YouTube is very much a platform for anyone that is used by everyone.
The other major advantage of YouTube is its position as an educational/informational hub AND the world’s second-largest search engine: users coming to YouTube are doing so with (at minimum) an idea of what problem they’re trying to solve, or what information they are looking to obtain. This is the exact frame of reference where a well-targeted advertisement can have an actual, measurable impact.
One note about this: when we run YouTube campaigns, we see a clear “halo” effect around targeted audiences – there’s a substantial number of people who don’t interact directly with the ad, but will later search for our product/service/solution/brand on Google, Microsoft (I genuinely don’t understand the person who spends a ton of time on YouTube, but sets their default browser to Bing, but that’s another discussion for another day) or another search engine. It’s important to benchmark your search volumes (brand, product/service specific) before launching YouTube campaigns, so you have a point of reference for determining halo effects going forward (this will be imperfect and imprecise, but I’m here to build businesses here, not hack p-values).
Maximizing Impact with Creative Lever
If your structure and targeting is your most powerful lever, the creative you use is the most impactful (outside of your offer). For anyone used to Meta or TikTok, this likely sounds familiar – but in Google-world, the idea of creative as a targeting lever is a (relatively) new concept.
The number one creative mistake I see across YouTube accounts is treating the platform as a digital extension of a broadcast/linear campaign – and running the same 30s TV spots on YouTube that you’re running on broadcast (yes, it happens – with staggeringly large budgets).
If you’re looking to maximize your probability of creative success on YouTube, I recommend three “better practices”:
1. Embrace Emerging Narrative Arcs:
Most ads follow a fairly traditional, 5-part story arc: introduction, rising action (problem), climax, falling action, conclusion. These are great, if you’re going to the Globe Theatre to watch Shakespeare; on YouTube (and on most digital platforms), the narrative arc must change in order to capture + hold your audience’s attention. This is the format we use for most YouTube videos:
Notice that the hook is aggressive – starting in the middle of the action, not with a slower introduction and a lead-up. Attention is held through a series of cuts (6 cuts in 30 seconds), which continually pull the user back into the video. If you want to be successful on YouTube, you must embrace new narrative arcs and creative formats.
2. Natural Content Language:
I’m a huge proponent of tailoring content to the natural content language of my audience, to the point where a user should not be able to differentiate my ad from the next video in their feed. This requires doing a LOT of research – not just on videos and channels, but going multiple steps further and watching the best-performing videos that you’ve identified, documenting their commonalities and understanding how they communicate with their audience (word choice, setup, framing, interaction style, tone, etc.). Once you have this insight, use it to create multiple assets tailored to each audience using the structural iteration framework:
Note: We’ve increasingly used SparkToro for our YouTube research, as the platform provides the ability to easily research what videos various types of users are watching based on their profiles, interests, customer lists, search behavior, websites visited, etc.
3. Iteration + Evolution:
I’ve said this before, but it bears repeating: YouTube functions much more like a social platform than a search engine. You need a LOT more creative assets than you think to make it work – so don’t be afraid to launch a lot of ads. This is 100% a power law game – 95% of the ads you launch will fail, but the 5% that succeed will carry your account to heights you never would have thought possible. As annoying, tiresome, and frustrating as it is to continually load up more ads, get over it and do it.
The Bottom Line
I’m incredibly bullish on YouTube moving forward – I think the platform’s combination of audience, targeting, placements and creative options is extraordinarily compelling to a wide variety of advertisers. As video continues to become the dominant communication medium, the value of YouTube will only increase. The brands/advertisers who invest the time today to master the platform are the ones who will have a huge advantage as advertisers realize the opportunity and start to seize it.
The best part – in my view – is that there is so much opportunity here that simply correcting the shortcomings/mistakes I’ve highlighted, doing your homework and creating some tailored ads for the platform (or even bringing over your Reels/TikToks) can have an outsized impact on your entire brand, all for a fraction of the budget currently being invested in Meta or TikTok.
Cheers,
Sam
