Most companies pour their ad budget into Meta and Google Search without a second thought. And fair enough, those channels work, but there's a third option sitting right under your nose that very few businesses are taking seriously, and it might just be the most underpriced advertising opportunity in digital marketing right now.

YouTube has 2.7 billion monthly active users. It's overtaken Netflix as the primary streaming platform on television, and 70% of its watch time happens on mobile. Your ideal customer is almost certainly spending time there, watching, learning, and making decisions about what to buy next. The difference between YouTube advertising and pretty much every other paid channel? You're not fighting for a click or a fleeting glance at a banner. You're getting minutes of someone's undivided attention, often for just a few cents per view.

If you've never run YouTube ads before, this guide will walk you through everything you need to get started: the ad formats available to you, how to set up your first campaign, how to target the right audience, what it'll cost, and how to make sure your budget actually delivers results. No jargon without explanation, no fluff — just the practical steps to get your first YouTube ad campaign live and performing.

howIf you're still weighing up whether YouTube deserves a place in your marketing mix at all, this piece on why your company needs a YouTube channel makes the strategic case. For the purposes of this article, we'll assume you're already convinced and ready to spend some money.

What Are YouTube Ads (and Why Should You Care)?

YouTube advertising lives inside Google Ads. Because Google owns YouTube, you get access to the same rich targeting data that makes Google Search ads so effective — search history, browsing behaviour, viewing habits, purchase intent signals — but instead of a text ad on a search results page, you're putting a video in front of someone while they're actively engaged with content they chose to watch.

That's the key distinction. YouTube ads aren't interruptive in the way a banner ad or a cold social media ad can feel. They appear alongside or within videos that people are already watching for entertainment or education, which means they're arriving in a context of attention rather than distraction. Depending on the format you choose, you'll either pay when someone actually watches your ad (pay-per-view) or when your ad is displayed a certain number of times (pay-per-impression), so you're not throwing money at people who aren't remotely interested.

For businesses, this creates an opportunity that sits somewhere between the high-intent targeting of Google Search and the broad awareness play of Meta — with the added bonus that video lets you tell a story, demonstrate expertise, and build trust in ways that a static image or a line of ad copy simply can't.

Types of YouTube Ads You Need to Know

Before you set up a campaign, you need to understand what formats are available and when each one makes sense. YouTube offers several ad types, and choosing the right one comes down to what you're trying to achieve.

Skippable In-Stream Ads

These are the ads that play before, during, or after a video and can be skipped after five seconds. You only pay when someone watches at least 30 seconds (or the entire ad if it's shorter) or interacts with it. This is the format most beginners should start with, and it's where the real magic of YouTube advertising lives.

Why? Because skippable in-stream ads reward good content. If your ad is genuinely interesting, educational, or entertaining, people will choose to keep watching — and you'll pay remarkably little for that attention. In our own testing at Humble&Brag, we've seen cost-per-view figures as low as €0.02 using content-led creative in this format, with average watch times of around two minutes. Compare that to the fraction of a second someone spends glancing at a display ad, and you start to see why this is such a compelling channel.

Non-Skippable In-Stream Ads

These run up to 15 seconds (20 seconds in some regions) and must be watched in full before the viewer's chosen video plays. Because the viewer can't skip, you're guaranteed complete delivery of your message. The trade-off is that you're paying per thousand impressions (CPM) regardless of engagement, so your creative needs to be tight and compelling — if people find your non-skippable ad irritating, you're doing your brand more harm than good. This format works best for concise awareness campaigns where you have a clear, punchy message that fits comfortably within 15 seconds.

Bumper Ads

Six seconds, non-skippable. These are the haiku of YouTube advertising — you need to say something memorable in an extremely short window. Bumper ads are rarely used as a standalone format; they work best as a reinforcement tool alongside longer campaigns. Think of them as a way to keep your brand top-of-mind after someone has already encountered you through a longer ad.

In-Feed Video Ads

These appear as thumbnail images with text in YouTube search results, alongside related videos, or on the homepage feed. Unlike in-stream ads, they don't autoplay — viewers have to click to watch. This makes them excellent for reaching people who are actively looking for content like yours, since anyone who clicks has deliberately opted in. You pay per click, which means every view represents genuine interest.

YouTube Shorts Ads

These appear within the Shorts feed, YouTube's short-form, mobile-first video format. If your target audience skews toward mobile-heavy consumption and you have a message that works in under 60 seconds, Shorts ads are worth testing. Keep in mind that the Shorts feed is a fast-scrolling environment, so you need to grab attention within the first second or two.

There are also Masthead ads, which take over the top of the YouTube homepage — but these are reserved for large-budget campaigns like product launches or national campaigns, so most beginners won't start there.

How to Set Up Your First YouTube Ad Campaign

Setting up YouTube ads happens inside Google Ads. If you already have a Google Ads account, you're halfway there. Here's the step-by-step process.

Link your YouTube channel to Google Ads. This is a prerequisite. Head to your Google Ads account, navigate to "Linked accounts," find YouTube, and connect your channel. This enables features like remarketing to people who've interacted with your videos and gives you richer reporting.

Create a new campaign. Click the "+" button in Google Ads and select "New Campaign." You'll be asked to choose a campaign goal — the main options include brand awareness, leads, website traffic, and sales. The goal you select will shape which ad formats and bidding strategies Google recommends, so pick the one that most closely matches what you're actually trying to achieve. If you're not sure, "Brand awareness and reach" is a sensible starting point for your first campaign.

Select "Video" as your campaign type and choose your preferred ad format from the options outlined above.

Set your budget and bidding strategy. For skippable in-stream ads, you'll typically bid on a cost-per-view (CPV) basis — meaning you set the maximum you're willing to pay each time someone watches your ad. For non-skippable and bumper ads, you'll bid on a cost-per-thousand-impressions (CPM) basis. Start with a modest daily budget — somewhere between $10 and $20 is enough to gather meaningful data without burning through cash while you're learning.

Define your target audience. This is where YouTube advertising gets really powerful, and we'll go deeper on it in the next section. For now, set your geographic targeting, language preferences, and at least one layer of audience targeting (demographics, interests, or custom intent).

Upload your video and write your ad copy. Select the YouTube video you want to use as your ad, write a headline and description, and add a clear call-to-action. Make sure your CTA tells viewers exactly what to do next — "Book a free consultation," "Download the guide," or "Start your free trial" will always outperform "Learn more" or "Click here."

Set up conversion tracking before you launch. This step is non-negotiable. Without conversion tracking, you'll know how many people watched your ad but you won't know what they did afterwards — and that makes it impossible to optimise. Add the Google Ads tag to your website so you can track actions like form submissions, purchases, or page visits that result from your ads. If you want to go deeper on measuring YouTube's business impact, our guide to running YouTube as a performance channel covers attribution in detail.

Review everything and publish. Double-check your settings, confirm your payment details, and launch your campaign. Most ads are approved within one business day.

Getting Your Targeting Right

Targeting is what separates a YouTube ad that delivers results from one that burns through budget with nothing to show for it. The good news is that YouTube offers more targeting sophistication than most advertisers realise — and you don't need to be a media buyer to use it effectively.

Demographics are the starting point: age, gender, location, language. These are useful for ruling out audiences that clearly aren't relevant, but they shouldn't be your only targeting layer. A 35-year-old woman in Munich could be anyone — you need more signal than that.

Interests and affinity audiences let you reach people based on their habits and lifestyle. YouTube knows what people watch, search for, and engage with, so you can target people who have demonstrated an interest in topics related to your business — fitness enthusiasts, tech early adopters, small business owners, and so on.

Custom intent audiences are where things get particularly interesting for B2B and high-consideration products. You can target people who have recently searched for specific terms on Google, which means you're reaching people who are actively researching problems your product or service solves. This is one of the most underused features in YouTube advertising.

Placement targeting lets you choose specific YouTube channels, videos, or partner sites where your ads will appear. If there are well-known creators or channels in your niche, placing your ads alongside their content is a highly effective way to reach a relevant audience.

Remarketing audiences let you retarget people who've already visited your website, watched your YouTube videos, or engaged with your channel. These are warm audiences who already know you exist, so conversion rates tend to be significantly higher.

One practical insight from our experience: when we tested both narrow, highly targeted audiences and broader ones, the difference in cost-per-view was surprisingly small. So don't over-narrow out of fear that a broader audience will waste your budget. Start with reasonable targeting parameters, gather data, and then refine based on what the numbers tell you.

How Much Do YouTube Ads Cost?

This is the question everyone asks first, and the honest answer is: it depends. Your costs will vary based on ad format, targeting specificity, competition in your category, and seasonal demand (advertising around the holidays costs more across every platform). That said, here are some benchmarks to ground your expectations.

Average cost-per-view for YouTube ads sits around $0.02–0.05, with content-led creative approaches often landing at the lower end of that range. Average CPM (cost per thousand impressions) is approximately $3.53. Average click-through rate hovers around 0.65%, and the average view rate — the percentage of people who watch your ad after it appears — is about 31.9%.

To put this in context, Meta CPMs typically run around €20, with cost-per-click averaging €0.40. Google Search CPCs often land between €4 and €5. YouTube advertising isn't just cheaper in raw terms; it delivers a fundamentally different kind of engagement. You're not paying for a click that leads to a three-second bounce — you're paying for someone to spend one, two, sometimes three minutes with your brand. When you think about it as cost-per-minute-of-engaged-attention, YouTube is in a league of its own.

Start with a daily budget of $10–$20 to learn the mechanics and gather enough data to make informed decisions. Once you've identified what's working, you can scale with confidence.

Tips to Optimise Your YouTube Ads

Getting your campaign live is step one. Getting it to perform well is an ongoing process. Here are the levers that will make the biggest difference.

Lead with Strong Creative

Your ad creative matters more than almost any other variable. The first five seconds determine whether someone keeps watching or hits skip, so you need a hook that immediately connects to the viewer's world — a question they're asking themselves, a problem they're dealing with, a result they want to achieve. If your view rate is low, the creative is the first thing to re-examine.

Use Specific Calls to Action

Every ad should tell viewers exactly what to do next, and it should be specific. "Book a free strategy call" or "Download the 2026 planning template" will dramatically outperform generic CTAs like "Learn more." If you're running a time-sensitive offer, say so — urgency increases action.

Refresh Your Ads Regularly

Ad fatigue is real on every platform, and YouTube is no exception. If your view rates start declining, it usually means your audience has seen the same creative too many times. Refresh your ads every few weeks with new hooks, updated visuals, or different messaging angles.

Review Your Metrics Weekly

The metrics that matter most are view rate (benchmark around 31.9%), cost-per-view, click-through rate (benchmark around 0.65%), and video completion rate. If your view rate is low, test new hooks or opening visuals. If CTR is low, sharpen your call to action. If completion rate is dropping off mid-video, your pacing or content structure likely needs tightening.

Think Content, Not Commercial

This is the insight most advertisers miss entirely, and it's the single biggest lever for YouTube ad performance. The best-performing YouTube ads don't look like ads — they look like valuable content that happens to be promoted. Educational videos, how-to walkthroughs, and genuinely useful explainers consistently drive lower CPVs, higher engagement, and better downstream conversion than traditional product-focused spots.

In our own experiments at Humble&Brag, using organic YouTube content as ad creative delivered CPVs of €0.02 and average watch times of around two minutes — numbers that are almost unheard of in paid advertising. Meanwhile, the traditional advertisers running product-focused spots in the same placements were paying multiples of that for a fraction of the engagement. If you're looking for inspiration on what kinds of content work well, this breakdown of seven video formats for business growth is a good starting point.

Common Mistakes to Avoid

Before you launch, a quick rundown of the pitfalls that trip up most beginners.

Skipping conversion tracking. You can't optimise what you can't measure. Set up conversion tracking before your first ad goes live — not after you've already spent your initial budget wondering whether it worked.

Ignoring mobile. The majority of YouTube viewing happens on phones. Make sure your visuals are clear on small screens, your text is legible, and your CTA is easy to tap on a mobile device.

Overloading a single ad with too many messages. One ad, one idea. If you try to cram your product features, company story, customer testimonials, and a limited-time offer into a single video, you'll confuse viewers and weaken every message. Keep it focused.

Running the same creative for months. Refresh regularly. Even a high-performing ad will fatigue over time.

Going straight to hard-sell product ads. This is the most common mistake of all. Companies treat YouTube like a billboard — logo, product shot, price, done. But YouTube rewards content that people actually want to watch. Lead with value, and the commercial results will follow.

Start Small, Learn Fast, Scale What Works

YouTube advertising is one of the most underpriced opportunities in digital marketing right now — especially when you pair it with creative that genuinely educates or entertains rather than just selling. The barrier to entry is low, the data is rich, and the cost of learning is a fraction of what you'd spend figuring things out on Google Search or Meta.

Start with a modest budget, test one or two ad formats, pay close attention to what the data tells you, and iterate. The companies that win on YouTube are the ones that treat it as a content channel with a paid amplification layer — not just another place to dump a product video and hope for the best.

If you'd like help turning YouTube into a measurable growth channel for your business — whether through paid advertising, organic content, or both — get in touch with Humble&Brag. And if you're thinking about building out a YouTube presence from scratch, our guide to growing a YouTube channel from zero subscribers lays out the full system we use with our clients.