YouTube’s growing prominence in popular culture has shown that it can serve as much more than just a way to share adorable kitten videos – it has become a highly effective venue for accessing massive audiences through online advertising.
YouTube has become the venue by which budding musicians and performers get their first big break. Justin Bieber first got discovered on YouTube, and more recently YouTube has made Psy’s hit “Gangnam Style” the most viral video of all time . And that’s not just an empty title – “Gangnam Style” has reached nearly 1 billion views, and those views can be equated to serious YouTube advertising revenue.
To put things in perspective: YouTube gets over 1 billion views per day, which means that if YouTube was a search engine, it would be the #2 largest, nearly 2X bigger than Bing  and Yahoo search combined, and roughly a third the size of Google.com!
Google is horse-dancing straight to the bank because of Psy’s immense YouTube success, and the perpetuating notion that the hottest headline sensations happen on YouTube. With YouTube being increasingly viewed as the place where pop culture happens, its advertising potential continues to grow exponentially.
YouTube’s advertising potential is as big as the record industry itself, hence Psy being invited to meet with Google’s Eric Schmidt  (and the resulting obligatory dance lesson). These viral videos aren’t just sensational fads – they are big advertising money.
Logic dictates that marketers should go where the people are – YouTube!
Want to be the next “Gangnam Style?” Don’t we all? There are a number of factors that go into making a viral video a success , and more than just a little is luck.
Trying your hand at making a viral video that aims to dominate the social sphere is great fun, but making a less globally ambitious yet more useful YouTube advertising video is likely the way to go for advertisers who want to further their reach into the massive (and still very much untapped) YouTube advertising realm.
(P.S. If you are still dead set on going after the holy grail and aim to earn the coveted title of “viral video,” read our Top 25 Most Viral YouTube Videos of All Time , complete with tips on creating your own viral video sensation.)
How to Advertise on YouTube: YouTube's Display and Video Ads
Since Google has taken over YouTube, they’ve gone to great lengths to make advertising on YouTube as easy and customizable as creating ads in AdWords . The options are nearly as numerous, with the two major options being display ads  and video ads .
Display Ads on YouTube
- Standard Banner Ad – These are just like the regular Google Display Ads, available as standard banner ads and rich media ads. You can use topic categories and keywords to specify where you want these banner ads to appear. Bright, colorful images that will grab the eye are best practice.
- In-Video Overlay Ads – In-video overlay ads appear as pop-ups within existing contextually targeted videos that are targeted by selected queries. Destination URLs within in-video ads can go to locations outside of YouTube.
In-video ad and banner ad to the right
In my personal YouTube viewing experiences, I find pop-up ads incredibly annoying. But there’s no denying that they are impossible to ignore, even if they are X-ed out immediately. Banner ads in the sidebar might be more easily overlooked.
Advertising on YouTube With Video Ads
Creating YouTube video ads is easy and completely free – you can shoot it yourself for a homebrewed feel, or hire some help for a crisp, professional look.
Wisely, YouTube advises “Don’t think Titanic. Don’t even think ‘sales pitch.’ Think about quick how-tos, or positive reviews from customers. Be personal.” No one goes to YouTube looking to watch extended daytime infomercials.
Need some ideas? Check out our Guide to Creating YouTube Content , packed with video ad concepts and ideas, as well as information on recording your video and optimizing it for SEO . And if all else fails and you’re really stuck, fall back on YouTube fundamentals – kittens! You wouldn’t be the first to create a cat-focused marketing campaign.
This is a favorite in the WordStream marketing department
YouTube advertising’s latest video ads fall under the umbrella of ‘True View’ video ads. While I can’t testify to any added “truth” value, True View ads  are a great deal budgeting wise because you only pay when viewers actually choose to watch your video.
True View video ads come in a number of different formats:
In-Stream Video Ads: The Ads that Pop Out When You're Watching Your YouTube Videos
Probably the most popular YouTube video ad format, in-stream ads play your ad before or during another video from a YouTube partner.
A viewer's immediate reaction tends to be full of grimaces, groans, and complaints since you’ve taken the liberty of interrupting their YouTube video viewing adventure.
Viewers are obligated to sit through 5 mandatory seconds of the ad, after which they get to decide if they want to keep watching or skip the rest of the video and go on to what they wanted to see in the first place.
If you’ve done some good targeting and have an interesting video ad, viewers might opt to continue watching, which can only mean you’re doing it right!
With in-stream video ads, you don’t pay unless the viewers watch your video for 30 seconds, or until the end of the video. If they choose to skip, you don’t pay a penny. What’s great is that with this option, you can create videos longer than 30 seconds, allowing you to experiment with video ad lengths.
Since you pay the same amount whether the viewer watches 30 seconds or the whole extended video, you can get more exposure for the same price. In fact, some studies have shown that longer videos (closer to the 60-second ballpark) tend to do better than the shorter ones. My theory is that longer videos are probably developing a richer story that is keeping viewers engaged, rather than throwing out a short “look at this, you should buy it” ad.
In-stream ads allow for contextual targeting, interest targeting, and demographic targeting . The more specific your campaign, the better.
In-Slate Video Ads: YouTube Ads that Play Before Your Video Starts
YouTube’s In-Slate video ads appear before YouTube partner videos that are 10 minutes or longer. Viewers can choose to watch one of three ads or alternatively can choose to see regular commercial breaks during their video.
In-Search Video Ads
In-search video ads appear above or to the right of regular YouTube search results.
In-Search video ads work similar to text ads in Google search, with advertisers bidding on keyword terms. While the same ad text strategies used to create AdWords text ads  applies to these in-search video ads, the YouTube advertising market is much less saturated, allowing advertisers who might normally be unable to compete for popular keyword terms  on Google search to get traction on YouTube.
In-Display Video Ads
In-display video ads appear alongside other YouTube videos, or on other Google Display Network sites that match your targeting options. It’s in the realm of “well if you liked that video, you’ll absolutely love….”
Additional YouTube Video Advertising Tools and Features
YouTube has a number of tools, extensions, and targeting options that can easily go unnoticed, but are absolutely worth checking out. YouTube advertising  provides:
YouTube Analytics Data – YouTube provides a wealth of analytic data , letting advertisers collection information on metrics such as the number of views a video gets, user engagement, and at which points viewers stop watching the video.
Remarketing – You can conduct YouTube advertising remarketing ads  to users who have already watched your previous videos on YouTube or on the Google Display Network.
Channels – YouTube Channels  are free to create, and function as your business’s own station, not unlike a Facebook page. You can customize your channel to express your business’s personality, and make it easy for viewers to subscribe to your future videos.
Taylor Swift’s example of a colorful customized YouTube branded channel. A bit too colorful for my taste, but I’m sure the tweens love it.
Advanced Targeting Options – YouTube advertising offers some great demographic targeting options including niche interest targeting and age targeting. Watch out, single, male, small dog owners under the age of 35!
Mobile Ads  – When you’ve gotten the hang of YouTube advertising videos, you can extend your reach to smartphones and tablets. The YouTube for mobile app  makes it easy for users to watch YouTube videos on the go - and your mobile YouTube ads!
Homepage Ads – Advertisers can purchase prime ad space on YouTube’s homepage, ensuring plenty of eyeballs and attention.
Additionally, advertisers can opt for something referred to as a "Homepage Roadblock." Yes, it is just about intense as it sounds.
With YouTube’s Homepage Roadblock  (also referred to as a YouTube Masthead – the terms seem to be used interchangeably), you are the only advertiser on the YouTube homepage for 24 full hours. That equates to about 23 million viewers, with 100% of the attention and no competition. This immense ad takeover doesn’t come cheap – a single day will cost you around $300,000, so this option is primarily for those with the deep pockets. Like Rich Uncle Pennybags pockets.
The main point of being on the homepage is branding, so if you do have the dough to make the investment, ensure that you are making good use of the prime real-estate by incorporating dynamic ads and engaging, clickable features.
Ways to Use YouTube Advertising Ads
Brand Awareness: YouTube videos let you create unique brand experiences and express your business’s personality. Consider producing a fun explainer video  for your product or service. Creating videos is a fun and practical way to develop your brand’s identity. Time to get funky!
Product Launch: Videos are a great way to introduce a new product or build excitement about an upcoming release.
I have a genius idea – let’s reintroduce the same product…but make it slightly smaller. Revolutionary!
Audience Engagement: YouTube can be a great venue for connecting and interacting with customers. A great example is Old Spice’s video response campaign in which they had Isaiah Mustafa, aka “the man your man could smell like” release a number of videos on YouTube answering questions and comments put forth by fans on Twitter and Facebook. The campaign was incredibly successful, with Old Spice’s Twitter following increasing by 2700% 
Customer Help: YouTube is a great place to offer how-to video solutions for common customer problems. Your videos can serve as a more engaging FAQ, or help customers gain a more advanced understanding of the features your product offers. Try hosting Q&A sessions, or town hall meetings to increase conversion  with customers.
YouTube Advertising: Untapped Exposure
With so many different ad formats to choose from, YouTube advertising is a playground for marketers looking to experiment with ad formats and gain exposure in a predominantly untapped market. Where else can you put advertising on other people's popular YouTube videos?
Have you tried marketing with YouTube ads? What has your YouTube Advertising experience been like? Share your experiences in the comment section!
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