How To Create YouTube Ads: Guide

Updated: October 8th, 2022


Social Media - (Paid)
Brand Exposure
Cost Details
YouTube Trueview ads or in-stream ads will cost somewhere between $0.10 and $0.30 per view, depending on the target audience and marketing goals

What Is YouTube Ads?

YouTube ads allow advertisers to target YouTube users as they watch videos.

YouTube attracts over 2 Billion logged-in users in a month. Therefore, advertising on YouTube provides brands a unique opportunity to maximize reach through Google’s powerful targeting methods.

In this article, we look at how YouTube Ads work. We will take you through the different YouTube ad formats and share examples of brands that have attained success by using YouTube Ads.

YouTube Ads Key Takeaways

  • Paid YouTube mobile advertising is [84% more likelps:// to receive viewers' attention than TV advertising campaign.
  • eMarketer predicts the number of U.S. YouTube watchers will increase to 228.1 million by 2024, up from 214.9 million in 2020.
  • 70% of viewers bought from a brand after seeing it on YouTube.

How YouTube Ads Work

YouTube features a unique combination of sound, sight, and motion. This provides an unmatched opportunity for audience engagement.

On YouTube, users discover videos in various ways including searching the YouTube search pages, clicking suggested videos on the watch page, or choosing a video from the homepage feed.

Advertisers use YouTube ads to target YouTube users who are searching for a product or brand. Besides, advertisers can target users while they are watching videos, or before the video, they are watching loads.

YouTube provides different Ad formats. Users pick the appropriate YouTube ad format depending on the goal.

Here is an overview of the different YouTube Ad formats Available today.

1. Skippable in Stream Ads

As the name suggests, the viewer has the option to skip the ad, but only after the ad runs for five seconds.

Use skippable in-stream ads when you have video content you would like to promote before, during, or after other videos on YouTube and across websites or apps running on Google video partners.

The skippable ads will be charged only when the viewer has watched 30 seconds of the video, or when interacts with the video

2. Non-Skippable In-stream Ads

The non-skippable-in stream ads are 15 seconds or shorter and play before, during, or after other videos.

The viewers do not have the option to skip these ads. The non-skippable in-stream ads use Target CPM bidding, and so you pay based on the number of impressions.

3. Video Discovery Ads

The video discovery ads feature a thumbnail image from the video and some text.

However, the exact size and video appearance may vary depending on where it appears.

The video discovery ad format is suitable when you intend to promote video content in places of discovery, including next to the related YouTube videos. Besides, the format is suitable when the advertiser intends to promote a video on the search results or on the YouTube mobile homepage.

The ad format is charged when viewers choose to watch the ad by clicking the thumbnail.

4. Bumper Ads

Bumper ads feature 6 seconds video that plays before, during, and after another video.

The viewers do not have the option to skip the ads using this format. The bumper ads use target CPM bidding, and so you pay based on the impressions.

5. Outstream Ads

The out-stream ads are popular when advertisers want to expand the video reach on mobile and helps you to reach more customers.

Ads based on the out-stream ads begin playing with the sound off, and viewers can tap the ad to unmute the video. You will be charged for out-stream video ads based on the viewable cost-per-thousand impressions.

6. Masthead Ads

The Masthead ad format is ideal when advertisers' intent is to drive awareness for a new product or service or to reach a massive audience within a short period.

Since the masthead ad formats are only available on a reservation basis, the advertiser pays on a cost-per-thousand impression.

Real-World Examples Of Brands Using YouTube Ads

Here are real examples of brands that use YouTube Ads To Target Users. Be inspired!

1. How YouTube Ads Helps Turf & Needle to Grow From $6000 to $100 Million Sales

Tuft & Needle is an American direct-to-consumer mattress and bedding brand.

The brand hoped to build brand awareness and to grow its sales volume, and so they turned to YouTube and created videos aimed at showing the stark difference between the brand's authentic approach and the traditional mattresses industry gimmicks.

They designed YouTube video ads targeting website visitors, people looking for real estate, or people searching for the best mattresses.

Starting with an ad budget of between $50-$100 a day, the brand saw an increase of sales from $6000 to $100 Million.

Here is what the founders had to say about YouTube Ads

"We’ve definitely seen an impact with YouTube. We started our company five years ago with just $6,000. We did $100 million in sales last year and about a million people will be sleeping on a Tuft & Needle mattress by year’s end. We believe that we’ll be able to continue scaling our company to the size we can become using YouTube the entire way. We absolutely feel like we’re living the American dream.

Daehee Park and JT Marino, Founders, Tuft & Needle

2. How Tulane’s Closet Uses YouTube Ads To Reach Enormous Audience

Tulane’s Closet wanted to increase their market base and to educate their target audience on how to use different products they had manufacturers.

For Tulane’s Closet, video ads were the simplest and most efficient approach. They created video ads targeting people searching for pet supplies, veterinarians, and dogs.

Based on the YouTube ads, the brand now sells to over 500 veterinarians across the US and the globe.

Since switching to youTube ads, the brand has more than doubled its sales each year.

Here is what the company founder had to say about YouTube video ads.

"YouTube is great for people who are just starting a new business, or for small business owners like myself because we’re all on a budget. Starting with just $5 a day for video advertising, we were able to reach an enormous number of people interested in helping their healing pets. I feel like I’m living the American dream to have come up with an idea like this and turn it into a success. And I think a lot of dogs are happier right now, too.

Stephanie Syberg, Owner and Developer, Tulane’s Closet

How To SetUp YouTube Ads

Watch this video tutorial for guidance on how to create your first YouTube Ad

Tips For Creating Attention-Grabbing YouTube Advert

Creating a YouTube ad may seem simple. However, ensuring the YouTube video ad is attention-grabbing could be overwhelming. Here are important tips to guide you when creating YouTube ads.

Choose Your YouTube Ad Format Wisely

The first complicated step when it comes to YouTube advertising can be choosing the appropriate Ad format.

Read about each YouTube ad format to see if it matches your goals and objectives.

You may choose to experiment with a few ad formats and compare the performance.

Take Advantage Of YouTube Targeting Options

Just as you would do with Google Advertising, Facebook Advertising, LinkedIn Advertising, and Instagram Advertising, you need to pay close attention to the audience that consumes the ad message.

YouTube allows great flexibility so you can take control over who your ads target.

Set Up Remarketing

Remarketing is by far the most efficient and effective targeting approach in the world of digital advertising.

The technique gives you the security of knowing the audience has already expressed interest in your company by visiting your website or searching for products that you sell.

Create Compelling Ad Content That Feels Native

With so much video content on the internet, YouTube users focus on high-quality content that does not feel like typical adverts.

Therefore, think of a quality that does not feel like the typical advertisement, as it could annoy or disturb people. Focus on entertaining and informative content types.

Add Interactive Elements that Drive Action

Call-To-Action buttons can help to drive engagements effectively.

Therefore, make sure each YouTube Ad explains to the users what they need to do next.

For instance, you can ask them to visit your website or YouTube channel to learn more.


Are you planning to use YouTube ads for the first time or looking for ideas to improve your YouTube Ads?

Whether your business is B2B or B2C, YouTube ads offer a great channel for delivering your message to the target audience.

Explore the above actionable ideas, to help you reach the right audience.

meet the author
Pat Walls

I'm Pat Walls and I created Starter Story - a website dedicated to helping people start businesses. We interview entrepreneurs from around the world about how they started and grew their businesses.