The Conversation Starter

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.

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33 Comments

  • Mrs H 4 months ago Reply

    Great post! I finally understood how it works. Thanks a lot.

    • birddog 2 months ago Reply

      Thanks for sharing your time and information. You went out of your way thereby becoming a giver, something I expect is not a “new thing” for you! :)

  • Jason Alleger
    Jason Alleger 4 months ago Reply

    Be sure to check out my other article on how much ads on Google cost:
    http://www.pennapowers.com/how-much-do-ads-on-google-cost/

  • Varun Garg 4 months ago Reply

    Thanks for the great info. Was looking all the information in a refined way for a college project. Thanks a lot for such refined and great information.

  • Kevin 3 months ago Reply

    Thanks. Why doesn’t Google explain it this clearly?

    • Amen. Google should wake up and smell the coffee in this respect.

    • Tessa 4 weeks ago Reply

      Hell yeah! I needed this info for the same thing!

  • Jawanza 3 months ago Reply

    Thank for the info, I have been looking everywhere for this info. Google wants you to jump through to many hoops for this same info. Thanks again!!

    • Rayann 3 months ago Reply

      As Chalrie Sheen says, this article is “WINNING!”

  • Tom Sims 3 months ago Reply

    Hi Jason,

    This is great information, I’ve been searching all over for this type of data and you have it here in one easy to read blog. I noticed the post date is Aug 2012, is the pricing data still valid today ?

    Thanks

    Tom

    • Jason Alleger
      Jason Alleger 3 months ago Reply

      Tom,

      Great question – I have actually seen prices drop slightly since this post was written. The average cost-per-view is closer to $.18 instead of $.20.

      This could be caused by a variety of factors, such as more content being available every day (more videos means more inventory) or YouTube’s targeting improving (better targeting means more relevant ads).

      • Tom Sims 3 months ago Reply

        Thanks Jason, I really appreciate your quick response !

  • tim 3 months ago Reply

    How much does the video uploader get from those ads?
    so if someone put ads (cpv $0.10) on my video, do I get a share of that $0.10?

  • Aryana 3 months ago Reply

    I’m not quite completely understanding how you’re charging. Can you please give me a hint or break down the process for me?

  • marc 3 months ago Reply

    quote ” At an average cost-per-view of $.20, UDOT would pay around $2,000 to educate 10,000 people how to drive the intersection.”

    wouldn’t that be $ 200,000 instead of $2,000?

    • marc 3 months ago Reply

      sorry, it’s 0.20… my mistake

  • Faisy 3 months ago Reply

    Thanks for such detailed overview about the YouTube ads.

  • Mark F 2 months ago Reply

    Thank you, I have spent hours searching for this info. i knew i was onto something when you answered the $ question in the first paragraph.

  • isah 2 months ago Reply

    pardon my stupidity, what if the commercial is the actual video shown? How would youtube charge for that? or what if the ad exceed 2 minutes, how would youtube charge that? Thank you.

  • Jeannie 2 months ago Reply

    Thanks for invaluable info in this post! I’m doing research for a marketing plan, and this info is difficult to locate.

  • Andy Baley 18 weeks ago Reply

    Hi, Does the advertiser pay if their ad is skipped? If they don’t pay, at what point is their ad deemed to have been watched and therefore chargeable?

  • Glen 17 weeks ago Reply

    Great info Jason.

    In researching the topic of video ad revenues, I constantly come across information from people who post videos who say that they get 45% of the cost of video ads on Youtube. However, the pricing model is usually something like $5/1000 views in which they would receive a $2.25 commission.

    I’m a little confused about how this pricing system relates to your information where you claim Youtube pays about 20 cents per view. With this model a 1000 views would generate about $200 and the video author would get a commission of $90.

    So I’m wondering how Youtube applies each of these pricing models?

    • Jason Alleger
      Jason Alleger 17 weeks ago Reply

      Glen,

      Great question. Advertisers pay YouTube $.20 per completed view. All of the views (even the :05 skippable) counts towards your video’s overall view count. So although your ad may have 1,000 views, it likely only has 25 completed views (where a user watched 30 seconds or more).

      1,000 views
      25 completed views
      $.20 per completed view = $5 for 25 completed views (that took 1,000 overall views)

  • Glen 17 weeks ago Reply

    Hey Jason,

    Really appreciate your quick response. So is that 2.5% of people viewing video ads considered the industry standard.

    I keep reading about other stats that are quite higher. I pulled the below text from the ClickZ website which suggests that about 29% of people would watch a pre-roll ad.

    “According to information Horan shared with ClickZ News that wasn’t included in the report, 29 percent of respondents said they were very or somewhat likely to watch a pre-roll video ad before viewing video content; 42 percent said they were very or somewhat unlikely to do so.”

    I’m asking for this information because I’m working on a video hosting site and I’m trying to figure out an accurate percentage to use to estimate potential revenues.

  • Mike 17 weeks ago Reply

    Hello, what is the proper length of an ad for You Tube? I was thinking 30-40 seconds, but it looks like either I will always be free or too short for that platform. Any suggestions or rules?

  • Ron 5 weeks ago Reply

    Thanks for invaluable info in this post! you helped me alot .

  • Finally, some useful information I can use. Thanks so much for sharing this.

  • This was a really good blog. I’ll definitely keep this site in my bookmarks. Keep it coming.

  • Name 4 weeks ago Reply

    So you’d pay a little for each view but eventually the total cost for the ad adds up and it’s like 2 grand

  • Bianca 4 weeks ago Reply

    Great article. I learned so much form this and just what I’m looking for. Thanks a lot! Cheers!

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