How to Determine the Right Mix of YouTube Ad Formats to Achieve Your E-Commerce Brand’s Goals

August 25, 2022
by Ashley R. Cummings

Video content has become a huge and highly competitive area over the last few years, especially with the rise of TikTok and similar platforms. With all these new social sites cropping up, it’s easy to forget about the old guard — YouTube. 

But, that would be a mistake. YouTube has a lot to offer e-commerce brands, including a robust paid ad platform. Let’s explore the ins and outs of YouTube ads and how to choose the right ones for your e-commerce business.

Why YouTube Ads?

YouTube ranks as the second most engaging website worldwide, with almost 2 billion global users. In the U.S., over 80% of adults use YouTube. 

These numbers on their own would be enough to make YouTube a compelling advertising platform. However, we haven’t even mentioned the real kicker: YouTube has a 14% platform-wide conversion rate, which is significantly higher than every other social platform.

YouTube also offers granular targeting options for ads, which ensures your content lands in front of exactly the right people at the right time. 

Now that we’ve covered how paid YouTube ads help you get in front of a highly engaged and targeted audience, let’s dive into the different YouTube ad formats. 

The Different YouTube Ad Formats Explained

Aside from all the targeting options, YouTube also offers multiple ad types. Let’s briefly run through each one.

1. Skippable In-Stream Ads

These YouTube ads appear either before, during, or after a video. Skippable in-stream ads can last up to three minutes but offer a skip button after five seconds. They can display on all device types: desktop, mobile, TVs, and video game consoles. 

2. Non-Skippable In-Stream Ads

These appear in the same places as the skippable in-stream ads, but can’t be skipped. They’re also shorter — 15 seconds maximum. But, since they can’t be skipped, they also have the potential to be more impactful. 

“In-stream ads, in general, are ideal for increasing traffic and sales,” says Hamna Amjad, marketing consultant for The Big Phone Store. “To make the most of the non-skippable ad type, include a compelling call to action (CTA).”

3. In-feed video Ads

In-feed ads show up in “places of discovery,” such as next to related videos and search results. These ads contain a thumbnail image and text. Users can click the ad to be taken to the full video. 

4. Bumper Ads

Bumper ads are short, non-skippable ads that play before, during, or after a YouTube video. Unlike the non-skippable in-stream ads, these are limited to a maximum of six seconds, which requires some creative thinking to leverage. 

Despite the short length, bumper ads are highly effective, according to Hamna. “Bumpers are perfect if your goal is to maximize reach,” she says. “Being very short, these should have attention-grabbing content. Add something that will stick in your audience’s memory.”

5. Outstream Ads

These are ads that run on mobile platforms with the sound muted by default. They’re only available on Google video partners (sites that can run Google ads), not YouTube itself. 

6. Masthead Ads

Masthead ads are displayed at the top of the YouTube Home feed on desktop and the top of the YouTube app on mobile. These are essentially huge banner ads on the YouTube site. Masthead ads are only available on a reservation basis by speaking directly to a Google sales representative. 

Choosing the Right YouTube Ad Type for Your E-Commerce Business

There are three basic things you should consider when choosing an ad: your goal, budget, and what stage of the sales funnel you want to target.

Step 1: Start with a Clear Goal

The most logical place to start when deciding on an ad type is with a clearly-defined goal. Aim to answer questions like:

  • Who are you targeting? 
  • What would a successful campaign look like?
  • Why are you running YouTube ads? 

The answers to these “who, what, and why” questions will help you work out the “how” — which type of ad to select. 

For example, if your audience tends to skip ads, and your goal is to drive awareness of a new product, you might want to opt for the bumper ad type. These can’t be skipped, and the brevity gives you the opportunity to make a memorable impact with creative content. 

Step 2: Determine Your Budget

For most brands, the budget will be one of the main drivers. The average YouTube ad costs between $0.01 and $0.03 per view. Certain ad types are more expensive — masthead ads and non-skippable content tend to cost more, while skippable video ads and in-feed ads are more affordable. Mastheads in particular can cost hundreds of thousands of dollars.

Also, consider the cost structure of your ad campaign. YouTube ads can be purchased on several different cost structures, including Target cost-per-thousand-impressions (Target CPM), cost-per-view (CPV), and several others. 

These types all have varying costs, and certain ad types are only available with certain cost structures. For example, non-skippable in-stream ads all use Target CPM bidding. 

Step 3: Focus on Your Sales Funnel

Finally, consider whether you’re aiming for the top (awareness), middle (consideration), or bottom (intent to purchase) of your sales funnel. Certain ad types tend to cater better to different stages of engagement. 

For example, Google recommends skippable in-stream ads for the top and middle of the funnel. These types are excellent for generating leads. Bumper ads are also excellent for the top of the funnel since their aim is to create a short, but memorable, impression among a large number of viewers. 

Get More From Your Ad Spend With YouTube

YouTube ads are a fantastic way to extend the reach of your digital marketing and get your brand in front of one of the largest audiences in the world. With the right goals, targeting, and ad type, you’ll be able to reach your ideal customer.
If you need more help with your YouTube ad campaign, adQuadrant has your back. Our performance-obsessed e-commerce marketers are ready to help you take your video content to the next level.


About the author: Ashley R. Cummings is a professional freelance writer and content marketing consultant specializing in e-commerce, marketing, and SaaS. Connect with her on Twitter!

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