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YouTube is the second biggest internet search platform after Google, with an audience of 1.5 billion users logging in each month (and it’s still growing). Ninety-six percent of U.S. online teens use the site, and more than one billion hours of YouTube content are viewed daily.

These numbers don’t lie. YouTube is a global force, and the demand for video content is only increasing: by 2021, a mind-boggling 80 percent of all internet traffic will be video-related.

So, if you’ve made an account for business, but you’re not advertising on YouTube yet, the time is now.

By the end of this guide to YouTube advertising, you’ll be familiar with the six different types of YouTube ads, the advertising platform itself, and the specifications for each ad type. You’ll also have a firm understanding of the best practices for marketing to a YouTube audience.

Bonus: Download a free guide that reveals how to increase social media engagement with better audience research, sharper customer targeting, and Hootsuite’s easy-to-use social media software.

Types of YouTube ads

There are six types of YouTube ads:

  • Skippable video ads (a.k.a. TrueView ads)
  • Non-skippable video ads
  • Bumper ads
  • Overlay ads
  • Display ads
  • Sponsored cards

TrueView ads

TrueView ads are the best way to drive brand engagement on YouTube. Brands who post TrueView ads often see engagement with their other YouTube content increase by up to 500 percent.

TrueView ads can be skipped after five seconds—so it’s important make those first five count. But as a brand, you only have to pay for these ads when the viewer watches 30 seconds or more, which makes them a pretty safe bet for advertising on a budget.

TrueView ads come in two formats, In-Stream ads and Discovery ads. Here’s a quick rundown of the differences between the two:

In-stream

Ad location: YouTube videos, apps, games, videos in Google’s Display Network
Video length: 3 minutes, max (> 30 seconds recommended)
Copy length: None
Clicks go to: Your website

Discovery

Ad location: YouTube videos & search results (including mobile), YouTube app homepage, “related videos,” and video overlays
Video length: No limit!
Headline: 25 characters max
Body copy: 2 lines, each 35 characters max
Clicks go to: your website (overlay banner) or your video (video thumbnail)

TrueView ads are one of the top ways to advertise on YouTube for a few reasons:

  • They’re low risk: With TrueView, your audience chooses the type of ads they’re interested in and you only pay when they view 30 seconds or watch to the end of your ad. That means the majority of your budget is dedicated to an audience that’s more likely to convert.
  • They’re versatile: TrueView ads allow you to advertise with how-to videos, product demos, video testimonials and more. Grammarly uses testimonials to great effect in their TrueView ads, and YouTube is a huge source of engagement for the company in general. 54.4% of their social media traffic comes from the site.
  • They reach a wide audience: With TrueView ads, you’re essentially combining the audiences of the two biggest search engines. While the main focus is YouTube, TrueView ads also appear on other publisher sites in the Display Network, depending on the type of TrueView ad you choose.

TrueView ads are pretty much a win-win, but they’re not totally foolproof. In a survey last year, IPG Mediabrands’ Magna and Media Lab units found that 76% of consumers reflexively skip ads if the option is presented, even if the ad might benefit them.

If you want people to pay attention to your skippable YouTube ads, keep the ads short and engage emotions with relatable moments.

For example, I’m a huge fan of this humble Chipsmore ad. It’s cute, funny, and entertaining, but most importantly, it doesn’t feel like an interruption. When you’re coming up with your own skippable ads, you want to make your audience forget that the option to skip exists.

Non-Skippable YouTube Ads

Non-skippable YouTube ads are paid for on a CPM (cost per 1,000) basis, meaning you pay per 1,000 views. These longer ads are a powerful way to tell a deeper, more nuanced story. But as superheroes will tell you, “great power comes at a cost.” The cost? People getting annoyed and closing your ad.

It’s no secret that non-skippable ads are somewhat unpopular. They can be intrusive, and most viewers wish they weren’t there at all.

YouTube knows this. This year, the company officially killed off the 30-second unskippable ad format. Non-skippable ads now have a more tolerable 15 to 20 second limit. This is great news for mobile users in particular: shorter ads use less data and are less of a time commitment.

Bumper Ads

Bumpers are technically non-skippable ads, but they’re less maligned because they last six seconds, max. Like non-skippable ads, bumpers are paid for on a CPM basis. Their short length makes them ideal for mobile. A common approach is to use bumper ads to compliment your longer, non-skippable ads.

Making a six-second video might sound easy, but to be successful, the concept behind the ad has to be really strong. If you need inspiration, YouTube has a top 20 leaderboard featuring the best bumper ads:

Now, let’s take a look at some other ad types: overlay ads, display ads, and sponsored cards. These are more traditional digital ad formats. Use these to add interactivity to YouTube videos with CTAs.

Overlay Ads

screen shot of a video featuring an overlay ad

If you’re running a reservation sponsorship campaign, you can set up overlay ads on partner videos. YouTube overlay ads are banner advertisements that you’ll often see running along the bottom of a video. They can be simple text ads like the one above, or image-based banners like the one below.

screenshot of an overlay ad on YouTube

For information on how to set up an overlay ad on YouTube, see Google’s helpful guide.

Display Ads

screenshot of a display ad on youtube

Display ads appear above the video suggestions list. Here, you’ll see the Hydro Quebec ad (outlined in red) above the RuPaul’s Drag Race makeup tutorials I’ve been watching way too much of lately. Display ads on YouTube can be managed from within AdWords, allowing you to double up with the Display Network for maximum reach.

Cards & Sponsored Cards

Cards are small CTA pop-ups you can set to appear within the YouTube player. You can use them to add interactivity to your videos on desktop or mobile.

Cards are effective because they’re unobtrusive. They only expand to their full size when they’re clicked (i.e., when the viewer is interested).

Here, you can see two cards on this Frank and Oak video. The card on the left is expanded, redirecting to their website, while the one on the right is a minimized subscribe button.

screenshot of a sponsored card on youtube