How great YouTube ads are depends on which side of the marketing divide you’re on. If you’re an advertiser, they are a great way to reach your potential audience on the largest video sharing platform on the internet, which happens to be run by the company that basically manages the internet.

If you’re a consumer, they’re annoying. (But, being a smart consumer, you grudgingly accept them as a necessary evil that must exist to keep YouTube free because five seconds of your time here and there is worth hours of free entertainment.)

But, sometimes the stars align perfectly and just the right consumer is looking for just the right product or service and is watching just the right ad that produces just the right amount of interest to stop that consumer from clicking the “Skip Ad” button. In these rare moments, magic happens.

Capitalism magic … capagic, if you will.

The consumer watches the ad, they forget about silly cats or epic fails or whatever it was they were dying to watch, and they go visit the advertiser’s website and exchange currency for product or service. In these rare cases, YouTube ads can be useful to a business. But, seeing as how this capagic is so elusive, it can dissuade businesses from wading into the uncertain waters of YouTube advertising.

Here is a field guide to YouTube advertising to help you capture that coveted capagic.

YouTube Ads

The first thing to note about YouTube ads is that there are two kinds on the site:

• TrueView
• Google Preferred

If you are a small business that is just starting with YouTube ads, the TrueView ads are the only ones you need to worry about, but let’s take a look at both kinds.

Google Preferred Ads

Google aggregates the top channels on YouTube that appeal to the coveted 18-34 year old age demographic. It then sells brands advertising time on those channels in packages that correspond to the brands’ category, such as Beauty & Fashion, Entertainment & Pop Culture or Foods & Recipes.

Buying Google Preferred Ads is a bit like buying ad time on prime-time television and, in fact, it was designed to appeal to television advertisers. When you buy ad time this way, your ads are appearing alongside the top 5% of YouTube content, which makes it ideal for major brands.

It can be costly. Obviously.

So, most small businesses that are just getting started with YouTube advertising tend to stick with TrueView ads.

TrueView Ads

These are the ads that appear at the beginning of YouTube videos or sometimes in the middle of longer content. They are skippable most, but not all, of the time.

You purchase TrueView ads in Google Adsense much like you purchase the in-display search ads that show up in search rankings. You can target TrueView ads to a specific audience by using the criteria of:

• Demographics (who),
• Topic (what),
• Geography (where),
• Affinity (how much people interact with the channel)
• and more.

In-Display

There are two types of TrueView ads and those are In-Stream and In-Display.

YouTube In-Display ads are similar to the ones that show up in Google search rankings when you rent a keyword on Adsense. They try and entice people while they’re searching for a video to watch and they appear at the top of YouTube search results.

In-Stream

In-Stream ads are the ones that appear at the beginning or in the middle of YouTube videos. These, in turn, can be broken down into two categories:

• Skippable
• Non-Skippable

The names are pretty self-explanatory.

Skippable In-Stream Ads

The most common and least costly type of ads, Skippable ads can be placed at the beginning, middle or even at the end of a video (pre-roll, mid-roll and post-roll, respectively).

As the name implies, viewers can skip these ads after they’ve played for five seconds. They do have some distinct advantages, though:

• You are only charged for the ad if a person watches it for more than 30 seconds, or
• the entire length of it (whichever comes first), or
• if a  person takes an action presented in the ad (like clicking a link).
• They have no time limit so you can make them as long as you need.
• The budget you set determines the cost of running the ads and there is no minimum to spend.

Non-Skippable In-Stream Ads

Like their skippable cousins, non-skippable ads provide you with the same targeting options and the same placement options (before, during or after the video) and they provide you with the same analytics (more on that in a moment).

The main difference with non-skippable ads is the time constraints. Because people cannot skip the ads, they are constrained to 15-20 seconds. The newest addition to the non-skippable ad family is the six-second Bumper ad, which often play before videos on mobile devices.

But, wait! There’s more!

When you run a YouTube ad, you get detailed analytics to keep track of exactly how well the ad is doing. YouTube tells you who is watching the ad, how long they’re watching it and other highly useful information that you can use to tweak your ads and hone your targeting to make your marketing more effective.

YouTube also provides you with a “view through rate,” which tells you how many people clicked on your In-Display ad or viewed the entirety of your In-Stream ad, which is great for measuring ROI.

In addition to detailed analytics, YouTube ads also give you the ability to put in a call to action like clicking through to your site or your channel or signing up for your newsletter (does anyone actually sign up for those things, by the way?).

If you can manage to make your ad interesting in the first five seconds and you can target that right person who isn’t too impatient to listen to what you have to say, YouTube ads can be incredibly helpful.
One of the most effective ways to capture people’s attention in five seconds or less (and get some of that sweet sweet capagic) is with animation.  Click here to use our price estimation calculator to see approximately how much your video will cost. (You don’t even need to talk to anyone!)

[YouTube icon in main image courtesy of Jurgen Appelo on Flickr]