YouTube Advertising 101: What Marketers Need to Know

Are you curious about using YouTube as an advertising channel, but aren’t sure how to dive in?

You’re not alone. According to a recent survey conducted by Social Media Examiner, only 11% of marketers say they currently run ad campaigns on YouTube but 65% say they want to learn more about the network.

This curiosity is rooted in the fact that YouTube has become a highly effective platform for reaching modern audiences. The Google-owned service is video-centric (hundreds of millions of hours of video are watched on it each day), mobile-friendly (more than half of YouTube views come from mobile devices), and has huge global reach (it has over a billion users in more than 88 countries).

So how can you tap into the potential of this powerful network? What should you be aware of when getting started with running advertising on it?

Here are answers to a few of the key questions brands often ask when embarking on using YouTube as an ad channel:

1. What types of ads can I run on YouTube? What are the different formats?
As with many other digital channels, distinguishing between what’s advertising and what’s not advertising on YouTube isn’t always easy. There’s a wide range of things—brand-created content pieces, product placements, etc.—that blur the line.

That said, there are a few approaches that clearly qualify as advertising (i.e., brands directly pay to serve them), and those are what we’ll cover here.

The specific types of units that can be run on YouTube are constantly changing, so check the company’s resource for advertisers to see an updated list and details. Currently, these are the core ad types that run on the platform:

  • Display ads: Traditional web units that usually appear to the right of the video.
  • Overlay ads: Semi-transparent ads that appear on the lower 20% portion of a video.
  • Skippable video ads: Video units that allow viewers to skip ads after 5 seconds.
  • Non-skippable video ads: Video units that must be watched before the main content.
  • Bumper ads: Non-skippable video ads of up to 6 seconds that must be watched.
  • Sponsored cards: Text/display units that display alongside the main video.

While at first this might seem like a complicated set of offerings, it’s actually quite manageable once you dive in with your campaigns.

The biggest difference to be aware of between YouTube’s units and other channels is the ability to serve skippable (TrueView) video ads.

Although you may initially be tempted to go with non-skippable ads, in general, TrueView units tend to have better engagement and be more cost effective.

Why is that? This YouTube employee explains (while being bombarded with puppies):

2. What sorts of video ads work best on YouTube? What should I keep in mind when developing video ads?
One of the challenges with YouTube advertising is that many brands don’t feel fully comfortable creating video ad units.

While developing this skill isn’t necessary to have ads appear on the platform—you can still run traditional display or text units—it does help. After all, YouTube is fundamentally a video platform and so video ads often deliver the best results.

Given that, what are the keys to creating effective video units? There are no hard-and-fast rules, but generally taking these approaches tends to lead to higher engagement:

  • Hook the viewer early: Because many YouTube ads can be skipped, and because audiences tend to be easily distracted, it’s important to immediately capture attention. Don’t start with a long introduction, and make sure to get your brand message in quickly.
  • Pay close attention to the sound: While we tend to think of video ads as primarily visual, they’re actually just as reliant on sound. This is especially true given that people often play YouTube videos in the background and so are listening rather than watching. Therefore, make sure your audio is engaging and clear.
  • Tailor to your target demographic: The rise of YouTube and similar platforms has changed people’s expectations of video. This is especially true for younger generations. Whereas older consumers may still react best to digital units that mimic television ads, those under age 24 are more engaged by non-traditional approaches (see this fascinating L’Oreal test). Keep these preferences in mind when developing your creative.

When it comes to creating video ads for YouTube, the biggest question brands often have is what the optimal length is for units.

Unfortunately, there’s no simple answer to that, but what one study found is that different lengths have different benefits. Specifically, very short units have the highest recall and very long units are best for conveying a brand story.

Check out this overview video to see the main learnings from the ad-length research:

3. What are my targeting options? How do I actually create a campaign and set parameters?
One of the most powerful things about YouTube as an advertising platform is that it marries huge scale with detailed data. This gives brands the ability to target ads incredibly effectively.

The complete set of targeting options is vast and evolving. Some of the most important include the ability to deliver ads based on:

  • Demographic group: Age, gender, parental status, household income, etc.
  • Interests/Affinities: Enthusiasm for specific brands, topics, etc.
  • Behavior: Past actions on both on YouTube, as well as Google search.

To access these target options and to actually run a campaign, it’s necessary to use Google AdWords.

This may seem a bit strange at first—why AdWords instead of the YouTube platform itself?—but it’s actually a good thing for advertisers. By incorporating video options into its core advertising offering, Google enables brands to develop campaigns that span a wide range of outlets (YouTube, search, display across partner sites, etc.).

It also has the benefit of feeling very familiar. Essentially, running a YouTube campaign is very much like running a search campaign, with the same interface but with some additional options.

To see the nitty-gritty of what it looks like to set up a campaign, check out this tutorial:

4. How do I know if my YouTube ads are working? How can I make my efforts even more effective?
As with setting up your ads to run, to see performance it’s best to go through the Google AdWords platform. Simply select “Video Campaigns” in the “All Campaigns” drop-down menu and you’ll be able to see how specific units are doing.

There are dozens of different metrics available in the dashboard, and the ones that matter most will depend on your brand’s specific goals.

That said, in general it’s worth at least quickly looking at these measurements for each video ad you run:

  • Views: The number of times people watched or engaged with your video ad. This will help you see how big (or small) of an audience you’re reaching.
  • Unique cookies: This is a proxy for unique viewers and will give you a rough sense how many individuals you are reaching.
  • Clicks: The number of times people clicked on your video. This can help you understand how engaging your ad is to people who see it.
  • Video viewership: This allows you to see what share of viewers completed 25%, 50%, 75%, and 100% of your video ad. It helps you understand where your audience is losing interest.

Of course, to succeed with YouTube advertising, it’s necessary to not only look at these metrics but to also take action on them.

Once you have some baseline numbers on how your ads perform, experiment relentlessly with everything, from your overall ad lengths to your minutiae of text copy. As with many other digital channels, even the smallest tweaks often can have a huge impact on ad performance.

Also, as you get more comfortable with the platform, test using units to push viewers to take different types of actions.

One of the huge advantages that YouTube has over both television and competing video platforms is how it integrates with other parts of the Internet.

For example, it’s possible to have a YouTube ad link directly to an app store page or a Google Shopping page. This can shorten the path to purchase and significantly increase the effectiveness of your marketing spend.

Ultimately, that interactivity combined with a huge audience, powerful targeting options, and detailed reporting is a strong argument for not only experimenting with YouTube advertising, but for making it one of your mainstay channels.

To learn more about how YouTube ads can be used to drive viewers to take action, check out this explainer video:



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