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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76 Comments

  • Mrs H 7 months ago Reply

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

    • birddog 5 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 7 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 7 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 6 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 3 months ago Reply

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

  • Jawanza 6 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 6 months ago Reply

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

  • Tom Sims 6 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 6 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 6 months ago Reply

        Thanks Jason, I really appreciate your quick response !

  • tim 6 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 6 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 6 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 6 months ago Reply

      sorry, it’s 0.20… my mistake

  • Faisy 6 months ago Reply

    Thanks for such detailed overview about the YouTube ads.

  • Mark F 5 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 5 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 5 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 4 months 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 4 months 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 4 months 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 4 months 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 3 months 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 3 months ago Reply

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

    • Jason Alleger
      Jason Alleger 3 months ago Reply

      It can be any length of time, but we generally recommend 15 to 30 seconds.

  • Armando Hillesland 3 months ago Reply

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

    • Laken 29 weeks ago Reply

      Hi Jason,

      This info has really helped. I have tried calling YouTube and emailing and I haven’t got a response from anything other than an automated machine. If my company wanted to do the In-Stream ad’s, what is our first step and who do we need to reach out to?

      • Jason Alleger
        Jason Alleger 18 weeks ago Reply

        Just go to adwords.google.com and choose the option to set up a video campaign.

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

  • Name 3 months 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 3 months ago Reply

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

  • Zarak 3 months ago Reply

    Amazing article. Thanks!

  • David 3 months ago Reply

    Two questions:

    1) 15 second ads I’ve noticed are not skipable, so you’d pay for that whole cost per view right then and there, however, I’m wondering if this would cost less on cost per view

    2) what about banner ads and side bar ads on youtube…they are usually paired with the same product/service in the video ad. Does this cost extra, come complimentary with paying for a video at or how does that work?

    • Jason Alleger
      Jason Alleger 3 months ago Reply

      Hi David,

      Both great questions. Here’s the answers:
      1. 15-second nonskippable ad cost. These are bought differently than the TrueView ads discussed in this article. Generally you need to buy them either directly through YouTube (as a direct buy) or through a preferred partner. They do cost more – around a $10-$15 CPM. That boils down to around $.01 – $.015 per view. So it technically is cheaper than TrueView ads but you are forcing people to watch your video rather than choosing to. Also the inventory for this is much less.

      2. Banner ads and sidebar ads on YouTube. These are complimentary when you place your video ads. You simply upload the banners and they run along with the video if the player supports it. For example, the banner will show on a desktop but not on a connected TV.

  • Varun Arora 3 months ago Reply

    I am starting my business video ads and this article gives me exact information that i am searching for. Thanks a lot. Is is possible to promote my ads only for a particular region?

    • Jason Alleger
      Jason Alleger 2 months ago Reply

      Yes, you can select your targeting when you build out your campaign. You can get as granular as zip codes or even geo-fencing around certain locations.

  • david 2 months ago Reply

    THANK YOU FOR YOUR TIME::: i HAVE A VIDEO OF A PRODUCT WITH A PROVISIONAL PATENT THAT i WISH TO SELL FOR MANUFACTURING. iS THERE A CHARGE TO RUN ON YOU TUBE? aND HOW DO i GO ABOUT IT . i AM 83 BUT HAVE A SON WHO WILL DO THE WORK. tHANK YOU. i WILL BE WATCHING MY e mail. DAVID TUBBS

    • Jason Alleger
      Jason Alleger 2 months ago Reply

      Hi David,

      Yes, you do get charged for running YouTube ads. You can reference the article above for the pricing. To start it, just create a Google AdWords account and create a video campaign. It’s really simple and easy to has tutorial steps along the way.

      • Abim Oyad 1 month ago Reply

        You can just upload the video to YouTube without any charges and it will be available to everyone that searches for it. But how will people know its there amongst millions of others videos? that is why you may want to pay YouTube to promote it. But if you already know the people you want to see it, and you can tell them to go check it out on YouTube, then you dont have to pay anything.

  • Thabiso 2 months ago Reply

    Thanks a million for this.
    I don’t get why Google makes this info so hard to find.

    You my friend…are a champ

  • David 2 months ago Reply

    Hi Guys,

    Just wondering if you get charged at all if people skip you ad after first 5 seconds ?

    • Jason Alleger
      Jason Alleger 2 months ago Reply

      Hi David,

      Good question. If you’re running TrueView ads (the skippable ones) then you do not get charged if they skip. You only get charged when the user watches at least 30 seconds. Here’s a link to YouTube’s description of how TrueView ads work:

      https://www.thinkwithgoogle.com/products/youtube-trueview.html

  • Rahulan 2 months ago Reply

    Hi Jason,
    If I have a “15-second nonskippable ad”, how is the viewing controlled? Is there a min-max limit per month? and if so, what if the viewer closes/changes the video before the ad ends (which is what I do most of the times!)?

    • Jason Alleger
      Jason Alleger 2 months ago Reply

      YouTube’s algorithms control how often the 15 second nonskippable ad is shown. Much of the decision is based on who is watching the video and if it fits the criteria of an advertiser. For example, as an advertiser on YouTube I’m setting my target audience (location, age, interests) as well as determining how much I’m willing to pay to target that person.

      • Rahulan 2 months ago Reply

        Thank you Jason,
        appreciate your time. Was really helpful.

  • Rahul Q 2 months ago Reply

    Thanks Jason, This was a very informative article.

    Can you please write a similar article on pricing details for ads on facebook.

  • Zaki 2 months ago Reply

    Great Article *THUMBS UP*

  • Racquel 2 months ago Reply

    Good day sir! thank you for this blog, I learned a lot. I just have a question, what if I set my budget as P400/day, will I pay for it daily or monthly? thank you very much!

    • Jason Alleger
      Jason Alleger 2 months ago Reply

      Good question. You’re charged in $500 increments, so you’ll be charged whenever your tab reaches $500. If you do enough business with them you can ask to be put on invoicing, in which case you’d receive a monthly invoice from Google.

  • Ran 1 month ago Reply

    Does In-stream ads average cost is really $.20?
    By looking on https://www.youtube.com/yt/advertise/, it seems that the most expensive in-stream ads cost 10 / 333 = 0.03$ (divide 10 dollars by by 333 views)!
    How come you say they cost .20$?
    Are there many “additional costs” that make the ad more expensive?

    • Jason Alleger
      Jason Alleger 1 month ago Reply

      Hi Ran,

      Your cost-per-view varies on how many completed views you get (30 seconds or more), not the overall view count. So in the example that you gave with 333 views, you’d have to take into consideration that only 20% of those would be counted as completed views. 20% of 333 is 67 views. $10 for 67 completed views comes out to $.15 per view, which is in line with what rates I’ve seen.

      Since this article was written, the costs have gone down slightly and my campaigns have been averaging $.09 – $.15 per completed view.

  • Can I advertise on You Tube to explain my products and show my website for potential customers? Does it cost upfront or after I get sales?

  • Marie Little 1 month ago Reply

    Hi Jason,
    Just wondering if you have an estimate on how many full views there are a month? I’m trying to do a budget sheet so need a monthly estimate (I’m a business student so it’s hypothetical but still needs to be accurate)
    Thank you! Great post.

  • Steven Nguyen 1 month ago Reply

    Hi Alleger,

    Do you know how YouTube pay you for the
    “In-display – an ad shows up on the suggested videos beside the video you are watching” ?

    I know for “In-stream” for example, viewers have to watch it for 15- 30 seconds to get pay.

    Do we get pay if a viewer just clicks on it ( In-display ads)?

    Thanks!

    • Jason Alleger
      Jason Alleger 18 weeks ago Reply

      Yes, if they choose to watch it then you get charged for the click in “in-display” ads.

  • Farwa 27 weeks ago Reply

    Thank You Jason
    Your Article helped me alot

  • crystal 26 weeks ago Reply

    Do you guys have any phone numbers that i can call i have lots of questions that i would love to be answered please get back to me fast thank you

    • Jason Alleger
      Jason Alleger 18 weeks ago Reply

      Sure, you can call us at 801.487.4800

  • Brittany 25 weeks ago Reply

    Hi Jason,

    This was an AWESOME article! I have some questions, and I’m hoping you can assist.

    1.)If a brand has a really small budget, would you recommend pre-roll (in-stream ads) or TrueView ads?I thought TrueView ads would work better, due to the low CPV and it’s ability to not charge unless an ad is actually viewed.
    2.) Additionally, what are your thoughts on pre-roll ads with a $36 CPM? So, our ads are running for $150 per week (for 12 weeks), totaling 1,8000 for our campaign. While we were told, we would see a 50,000 impression result, our views on our pre-roll video have only totaled 3,577, with 4 weeks left in campaign. Would you agree that we’re overspending and not seeing efficient results? And if so, what are we doing wrong here?
    3.) Do you recommend that we run our ads on a CPV model with TrueView ads instead?
    4.) Based on the above, how much of a profit is the advertiser getting?

    Thanks.

    Brittany

    • Jason Alleger
      Jason Alleger 18 weeks ago Reply

      Hey Brittany,

      1. I hate to say it depends on the goal, but it depends on the goal. If your primary metric is video views, then go for what’s cheapest (likely pre-roll since that averages less than $0.01 per view). TrueView is better if you want more control over what video content it’s running on.
      2. $36 CPM is far too high. We buy over 100M video impressions per year, and the highest I’ll buy is perhaps $20 CPM if it’s on exclusive content with a ton of targeting layered on. If you’re running pre-roll with typical targeting (location, demographic, etc.) you should expect to pay $12-$16 CPM. I’d say we average closer to $12 CPM overall. If you need some good pre-roll company referrals I’d be happy to provide them.
      3. I’d run on a cost per completed view. That way you only pay when a user chooses to watch at least 30 seconds of your ad.
      4. If you’re paying a $36 CPM on pre-roll ads, I’m guessing the company selling it to you is making a 400% margin, if not higher. They likely are paying $7-8 CPMs and marking up the rest. You can ask them. They should be able to provide a bid list of every bid they did and how much they paid to win that video impression.

      Hope this was helpful!

  • Thanks now I understand how ads pay you per view TY

  • Al Mamun 20 weeks ago Reply

    For 3,00,000 video impression on youtube how much $ it have need ?

  • raj 18 weeks ago Reply

    hi jason,
    great article, just one question is that what i have need to do if i want to show advertise on my video sharing sites like you tube if my site is right now in very small.then how do i show prerolls ads, midroll ads & postroll ads on my video sharing site.

  • James 11 weeks ago Reply

    Great sight and appreciated by many, I am sure.

    Ok, I have nearly completed my next native software, and my free blog will receive about 4 million hits per month. I will update my blog about 1,000 times per month.
    I have a captive audience.
    My blog will have auto play videos (several Ads totalling up to 3 minutes per update) next to my blog.
    What rate should I charge clients for guaranteed 100% play video Ad time?

    Most appreciated, James Australia.

    • Jason Alleger
      Jason Alleger 8 weeks ago Reply

      If it were me I’d charge on a CPM (cost per mille/thousand) for the video impressions. Usually the ballpark is $8-20 CPM, meaning you make $8-20 per 1,000 video views. It’s a good tactic to only charge for 100% completion rate, so you may be able to charge more of a premium based on your target audience.

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