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YouTube Advertising: Exploring an Untapped Market for Small Businesses

Think about the last Youtube ad that you saw. Was it memorable, relevant, and attention-grabbing? Was it from a local company or a national brand? Many of the Youtube ads you see may seem like they are from giant companies and brands, but small businesses can and should be participating, too. 

Youtube Ad

Source: Big Game Ad with Jason Statham & Gal Gadot


Why Choose Youtube?

YouTube is considered the world’s second largest search engine with over 1 billion hours watched daily on desktop and mobile, yet only 9% of small businesses use it for advertising. With all of the users on YouTube, advertising on this platform is a huge target market small businesses are missing out on. On a monthly average, 80% of 18 to 49-year-olds watch content on YouTube. Placing video ads on pages with relevant content can increase brand awareness exponentially, which is one of the top priorities for small business owners.


YouTube Ad Formats


There are many ways to make YouTube advertising fit into a company’s campaign structure and budget. Depending on the product or service offered, businesses can choose to use video ads, overlay ads, display ads, sponsored cards, or a combination of both. Video ads play before, during, or after the main YouTube video and can either be skippable or non-skippable, depending on your preference. Display ads are non-obstructive ads that do not play before or after a video. Instead, they are displayed off to the side of the video player.

 Youtube Overlay Ads

Overlay ads appear at the bottom portion of the video player and are semi-transparent in order to be less obstructive. They are clickable and usually relevant to the video content. Sponsored cards display other videos and relevant products after a video ends.


Most ads last for 6-30 seconds, while some ad types last a few minutes. Many businesses choose bumper ads, which are six-second, non-skippable ads meant to be fast-paced and deliver a high impact. Studies show that bumper ads can be just as effective as 15, 20, and 30-second ads and take up less of the consumer’s time, making them less prone to aggravation.


Ad Creation


There are many tools a small business can utilize to create advertisements on YouTube, whether they have a designated marketing department or not. Many downloadable programs are easy to use and manipulate footage to create video ads, even taking screenshots for display ads. These programs can take existing footage and eliminate sound, rearrange clips, and optimize the ad to excel on YouTube.


After the footage is shot, these programs assist the ad creator in building the vision for the ad. It is wise to create ads in a series, creating ad spots of different lengths and content. Some companies use ads to tell a story, called a “mini-series”. Others prefer creating different types of bumper ads, making each one different, yet carry out the same theme and goal.

Camera Filming 2


Targeted Advertising


For small businesses, YouTube ads are effective because they can reach broad audiences or specific audiences. YouTube ads can be targeted to certain videos, channels, or topics. There are 1.3 billion users on YouTube, which is about one-third of the entire internet population. People watch YouTube for product reviews, lifestyle vlogs, and to stay up-to-date on current events. It is easy to choose a video, topic, or user that relates to the product or services offered by the business. In addition, consumers spend the most time on YouTube in one sitting compared to other social media platforms. That number is expected to continually grow year after year.


When advertising on YouTube, companies are encouraged to carefully choose who and when to target. Targeting options include topics, demographics, keywords, placements, and categories. Topic targeting places ads on relevant videos that match with a certain subject. Demographic targeting uses information such as age, gender, income, and other descriptions to target video watchers. Keywords target specific terms that will be relevant to the video, thus capturing the interest of the audience based on what they are searching for. Placement ads can be used on certain pages of YouTube relevant to the advertisement, and categories are divided by user interest. Just as companies can choose to include these interests in their targeting, they can also specifically exclude them to avoid association with irrelevant videos.


Competition and Cost


TelevisionYouTube is growing and competing with other paid streaming and cable companies. Studies show that users are streaming YouTube more, and paying for cable much less than they were 5 years ago. Creating advertisements for YouTube is easier and cheaper than creating commercials for television and can reach a broader audience. When advertising on television, companies pay a fee to the network to purchase an ad spot. With YouTube advertising, businesses are only charged when their ad is seen.


Insights and Analytics


Small business owners obviously want to see regular reports on the exposure that their ads are getting. YouTube actively tracks who clicks on the ad and where it was redirected from. YouTube’s easy-to-use dashboard, YouTube Analytics, allows those who advertise on YouTube to track their ad progress in terms of views, clicks, and even when a user stopped viewing the ad. Most videos cost between $0.10 - $0.30 per view, and the company is not charged if an ad is skipped within the first five seconds of being displayed. Ads can also be repurposed, cut up, and reformatted into different types of ads and placements to create a streamlined campaign. Video ads can become display ads, and bumper ads can be created from images and small clips - just be sure to have enough material to keep ads fresh, interesting, and streamlined.



As a business owner, you shouldn’t be wasting money on advertising to an irrelevant audience. Youtube ads are shown to the people you want, where you want. If you’re interested in getting started with Youtube advertising for your business, contact Teamwork today to schedule a consultation.


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