The budgeting and bidding process can be overwhelming if you are new to Google AdWords for video and YouTube advertising. However, it does not need to be.

Here are a few budget-setting basics you need to know to get the best return on investment (ROI) for your YouTube video ads.

You Have Control

One of the reasons the Google AdWords system and YouTube advertising continue to grow exponentially is that businesses with AdWords businesses remain in control of their budgets and marketing campaigns.

You will have total control of your budget with Google AdWords for video. You are responsible for allocating the funds you will use to run your video ads on YouTube, so you must set your budget to an amount you are comfortable spending.

Google AdWords for video operates on a pay-per-view (PPV) system. With Google AdWords, you will only pay for views when a YouTube user watches your video ad through to finish or watches the first 30 seconds, whichever comes first. When you first use AdWords to set up your video campaign, you will be asked to set a maximum cost-per-view (CPV), the maximum amount you are willing to pay for each view your video ad receives.

Calculating Max CPV

To calculate the max amount you are willing to PPV, you need to decide on an ideal monthly budget. If your ideal monthly budget is $300, you divide $300 by $ 30.4 (the average number of days a month). Thus, your budget would equate to about $9.87 a day.

At this point, you can do one of two things – either set your max CPV using an amount between the average spend of $.01 and $0.23 or divide the daily budget by the number of views you would like to receive each day. 

Option 1

Divide your daily budget by your max CPV to estimate the total views you can receive daily. If you decide one picture is worth $0.15, you will set your max CPV to that amount. With a budget of $9.87, you can expect about 65 views daily.

Option 2

Divide your daily budget by the number of views you are hoping for to calculate your max CPV. If you want 100 views daily, using your daily budget of $9.87, you will set your max CPV to $0.099.

Optimizing Your YouTube Advertising Budget

Start small when setting your YouTube advertising budget. It is common for businesses to set a daily budget of three to five dollars. As with any other advertising strategy, YouTube video ads are an investment, and you want to ensure you are getting the best ROI available. Your monthly budget can be adjusted at any time. If you are happy with the returns, increase your budget. Optimize your budget if things are not adding up.

Budget optimization is about spending strategically rather than simply spending more. To thoroughly understand the relationship between CPV and the quality of views your video receives, you need to experiment with your budget and use performance data to find out what is working. AdWords tools such as conversion tracking and Google Analytics can help you do that. These tools may show you that your intended audience only engages with your ad during certain days of the week, at certain times, or using specific devices. As a result, you could adjust your campaign so that your video ad does not run at times when your audience is not engaged and only runs on the devices your intended audience is using. These minor adjustments can make all the difference in your ROI and reassure you of YouTube’s marketing ability.

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