HOW MUCH DOES IT COST TO ADVERTISE ON YOUTUBE?

At Lillian Purge, we specialise in Local SEO Services and detail How Much Does it Cost to Advertise on Youtube? so you know what budget to allocate and what drives results before launching campaigns.

YouTube advertising is one of the most powerful ways to reach potential customers through video. With over two billion monthly users and extensive targeting options, it allows businesses of all sizes to promote their products and services to engaged audiences. But one of the first questions many advertisers ask is, how much does it cost to advertise on YouTube?

The answer depends on several factors, including ad type, audience targeting, bidding strategy, and competition. This article explains how YouTube ad pricing works, what affects costs, and how to budget effectively for your campaigns.

How YouTube Advertising Works

YouTube advertising runs through Google Ads, which means the pricing structure is based on an auction system. You pay when someone interacts with your ad, such as watching for a certain duration or clicking on a link.

Advertisers bid for placements based on their goals, whether that’s brand awareness, website traffic, or conversions. Google’s system determines ad costs using three main factors: your bid amount, ad quality, and relevance to the target audience.

This ensures that even small businesses with modest budgets can compete, provided their ads are well-targeted and engaging.

Average Cost of YouTube Ads in the UK

The cost of advertising on YouTube varies, but on average, you can expect to pay:

  • Cost per View (CPV): £0.02 to £0.10 per view.

  • Cost per 1,000 Impressions (CPM): £4.00 to £10.00.

  • Daily Budgets: Most businesses start with £5 to £20 per day.

These figures depend on the campaign type, target audience, and competition. For example, ads targeting high-demand industries like finance or technology may cost more than local campaigns promoting small businesses.

The good news is that YouTube only charges when someone actively engages with your ad—meaning your budget is spent on genuine interest, not just impressions.

Factors That Influence YouTube Ad Costs

Target Audience

The more specific your audience, the higher the potential cost. Narrow targeting, such as focusing on particular locations, demographics, or interests, often requires higher bids. However, it can also deliver more relevant leads.

Ad Type

YouTube offers several ad formats, each priced differently:

  • Skippable In-Stream Ads: These play before, during, or after a video and allow users to skip after five seconds. You pay only when viewers watch 30 seconds or more or click your link.

  • Non-Skippable Ads: Typically 15 seconds long, these ads must be watched in full. They are charged based on impressions and often have higher costs but guaranteed visibility.

  • Bumper Ads: Six-second non-skippable ads designed for quick brand exposure. Usually charged on a CPM basis.

  • Discovery Ads: Appear in YouTube search results or next to related videos. You pay when users click to watch.

  • Overlay Ads: Small text or banner ads that appear on desktop videos, charged per click or impression.

Choosing the right ad format depends on your campaign goals—brand awareness, engagement, or conversions.

Ad Quality and Relevance

Google rewards advertisers who produce relevant, high-quality content. Ads with higher engagement rates (likes, clicks, or watch time) are often given better placement at lower costs.

Bidding Strategy

YouTube allows you to choose between automatic and manual bidding. Automatic bidding lets Google optimise delivery for your campaign goals, while manual bidding gives you full control over the maximum amount you’re willing to pay per view or impression.

Competition

Advertising costs increase during high-demand seasons or when multiple businesses compete for the same audience, such as around holidays or major events.

Setting Your YouTube Ad Budget

YouTube campaigns are flexible and can suit almost any budget. You can choose between daily or campaign-level budgets:

  • Daily budget: The average amount you’re willing to spend each day.

  • Campaign total budget: The maximum you’ll spend across the entire campaign.

Start small to test your strategy. A £10 daily budget can generate meaningful results, especially for local or niche targeting. Once you understand which ads perform best, you can scale your spend confidently.

How to Control Your Costs

YouTube gives advertisers full control over spending. To manage costs effectively:

  1. Set clear campaign goals before launching.

  2. Use detailed audience targeting to reach the right viewers.

  3. Monitor campaign performance through Google Ads.

  4. Exclude irrelevant placements or audiences.

  5. Test multiple ad formats to find the best-performing type.

Consistent monitoring and optimisation ensure your budget is used efficiently.

Maximising ROI on YouTube Ads

To make the most of your advertising investment, focus on quality, relevance, and engagement.

Create Engaging Videos

Your video content should capture attention within the first few seconds. Use clear visuals, concise messaging, and a strong call to action, such as “Visit our website” or “Book your consultation.”

Optimise for Mobile

The majority of YouTube viewers use mobile devices. Ensure your ad visuals and text are clear on smaller screens and that your landing pages are mobile-friendly.

Track Performance

Google Ads provides in-depth analytics, showing how your audience interacts with your videos. Key metrics to track include:

  • View rate (percentage of users who watched your ad).

  • Click-through rate (CTR).

  • Cost per conversion.

  • Watch time and audience retention.

Reviewing these insights helps identify what’s working and where improvements are needed.

Retarget Interested Viewers

You can retarget people who have previously watched your videos or visited your website. This keeps your brand top of mind and increases the chance of conversions.

Common Mistakes to Avoid

  • Targeting audiences that are too broad.

  • Using long or unfocused video content.

  • Ignoring campaign analytics and failing to adjust.

  • Setting unrealistic budgets without clear goals.

Avoiding these errors helps you run cost-effective campaigns with measurable results.

Expert Advice from Lillian Purge

  1. Start small. Begin with a manageable budget and test different ad types before scaling.

  2. Focus on relevance. Well-targeted ads perform better and cost less.

  3. Track results. Use analytics to refine performance and avoid wasted spend.

  4. Invest in creative quality. Engaging videos deliver higher returns.

  5. Combine strategies. Support your YouTube Ads with local SEO and Google Ads for maximum reach.

YouTube advertising is one of the most flexible and cost-effective ways to reach a wide audience. By understanding how pricing works, optimising your content, and carefully managing your budget, you can create impactful campaigns that attract real customers and grow your business.

We have also written in depth articles on How to Advertise on Youtube and 10 YouTube tips every small business should know as well as our YouTube Hub to give you further guidance.