How do YouTube Ads work, and what will it cost me?

How do YouTube Ads work, and what will it cost me?


Why should I consider Youtube ads?

YouTube has grown into being the world’s second largest search engine. It reaches over 1 billion unique visitors and clocks over 6 billion hours of video viewings every month. In South Africa it is under-utilised and as such offers a very cost effective form of advertising.

Related: Make Money from YouTube Videos

What are Youtube Ads?

Youtube Ads are paid advertisements that run on the Youtube website. The ads come is a variety of formats including banner type ads and video ads.

Youtube ad types


What type of companies should be running Youtube Ads?

There are no hard and fast rules about this, but the great news about Youtube Ads in South Africa is, because there aren’t many companies using it, it presents a market opportunity well worth tapping into.

A benefit of this low level of utilisation is that the cost to advertise on Youtube is generally very low when compared with other advertising mediums and especially Google Adwords. Any size company from a localised small business to a large multinational can drive exposure and business with Youtube Ads.

How much budget do you need?

As a rule of thumb in South Africa a monthly budget of R5000.00 or more is needed to make a measurable impact. If the budget is smaller the results are hard to extrapolate accurately.

Extrapolation is key to any paid advertising campaign, including Google Adwords because the immediate results data and the ability to adjust and tweak regularly means a more efficient and effective campaign.

Don’t forget that all Youtube Ads except for Overlay in-stream ads (which are just text) need to be designed, the most expensive of which are the skippable TrueView in-stream ads. Being video they need to be filmed and edited, and often involve animation as well. Expect to pay anywhere from R6000 upwards for a Youtube Ad video. A set of display ads can be put together by a graphic designer very inexpensively.

What exposure can you expect from a Youtube Ad campaign?

An important aspect of maximising exposure within your budget is a focus on your geographical area. A large FMCG group advertising a washing powder will target the whole of South Africa, while a photocopier dealer in the North of Johannesburg will only allow ads to show to Youtube users in the North of Johannesburg.

This geographical focus, coupled with the under-use of YouTube, means that there is currently a massive opportunity to gain huge exposure for relatively little budget.


How does Youtube bill me for my ads?

The greatest thing about Youtube Ads is that you are only billed if a Youtube user clicks on your ad, or watches at least 30 seconds or more of your entire video ad. Skippable TrueView in-stream ads offer the best opportunity for low cost exposure.

If your ad appears before a video and the user clicks skip, you have their undivided attention for 5 seconds before they are allowed to click skip. Importantly this costs you absolutely nothing. Only if they engage with your ad for more than 30 seconds are you billed, and if they are engaging for more than 30 seconds it’s worth the spend.

Related: The Dish Behind YouTube Hits: Global YouTube Trends Explored

Should you go it alone or hire an agency to run your Youtube Ads campaign?

Most agencies will charge you between 15% and 25% of your monthly Youtube Ad spend to manage your account. This will typically include reporting at the end of the month and regular tweaking to get the most out of your budget.

If however you are tech savvy and feel you’d like to save on the management fee there are numerous resources out there to teach yourself how to manage your ads. It is suggested for the creation of the display ads and video’s you consult an agency to provide a slick and polished product.

For a detailed explanation on how to get going with YouTube Ads and successfully run your YouTube campaign, download Google’s YouTube Advertising Guide: Grow Your Business With YouTube.

Luke Marthinusen
Luke Marthinusen is the managing director and founder of Markets Online, a full service digital marketing agency focused on web design, search engine optimisation, graphic design and video production. He spends his time strategising with clients on how best to market their businesses, and attracting and hiring top talent in the online marketing industry. Connect with Luke on LinkedIn: