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Contributed by Jason Alleger

YouTube is the second-largest search engine in the world, trailing only Google. There are over two billion YouTube videos streamed every day, and advertisers want a piece of this viewership pie.

So how much does it cost to run an ad on YouTube?

YouTube advertisers pay per view of their ad, with an average cost-per-view ranging between $.10 – $.30. The views also count toward your overall YouTube views.

On YouTube there are four standard types of ad formats:

  • In-search – an ad shows up above the YouTube search results.
  • In-slate – an ad shows up in the suggested videos after your video ended.
  • In-display – an ad shows up on the suggested videos beside the video you are watching.
  • In-stream – an ad plays before you can watch your video.

The pricing varies slightly per ad unit, with in-display ads ranging towards the higher end ($.30) and in-search toward the lower end ($.10).

Advertisers can target viewers by age, gender, location or by what types of videos they like to watch on YouTube. Generally, advertisers pay incrementally more for focused target audiences.

For example, if the Utah Department of Transportation (UDOT) wanted Utahns to learn how to drive a new type of intersection in Salt Lake City, it would only want to target men and women 16+ years old within a 10-mile radius of Salt Lake City. It would probably select more in-stream video ad units so the locals could watch how to drive the intersection, as well as in-search for anyone searching for driving tips in the area. At an average cost-per-view of $.20, UDOT would pay around $2,000 to educate 10,000 people how to drive the intersection.

Overall, YouTube ads are an excellent means of boosting your web presence at an affordable rate. For most ad units, potential customers actually CHOOSE to watch your advertisement. Also, the overall boost in views gives more credibility to your company and gives it a better chance of showing up organically in YouTube or other search engines.