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Glossary keyword - Youtube Advertising

Youtube Advertising

YouTube advertising is putting commercials before or in the middle of Youtube videos for digital marketing purposes. You might click on a video of your favorite Youtuber, and sometimes you see a commercial that you cannot skip for the first five seconds. These ads may include a host of short videos - from other youtube channels to a cereal commercial. 

The Commercials 

There are primarily two parties that make money off of YouTube advertising. The first one is YouTube itself. Youtube picks which videos are eligible for advertising and which aren't. Commercials that should be put before or in the middle of videos, and it takes a percentage of each ad. The second one is the Youtuber who has put the video content on YouTube in the first place. 

YouTubers can choose to have ads on his videos unless the video gets demonetized. There are several things to keep in mind when it comes to the costs of advertising on Youtube. One area to consider is that most Youtube advertisements are charged on a cost per view basis. 

In-stream Advertisement 

In-stream ads are probably the most common form of advertising you might be aware of on Youtube. These are ads that appear before the video. These in-stream ads are on a cost per view basis. This means that you only pay for an in-stream ad whenever either user watches over 30 seconds of the ad or the ad in full. So if an ad video is 31 seconds, but they watch 29 seconds and skip the advertisement, the advertiser will not be charged. If the video is below 30 seconds, the advertiser is only charged if the ads are fully watched. 

Display Ads

Display advertisements are also at a cost per view basis. Unlike the in-stream ads, display advertisers are charged whenever the user decides to click on a video. This can be done either from the related videos column or at the top of a search result. 

Non-skippable Ads

There are also the non-skippable advertisements that charged on the number of impressions the ad receives. What is the cost of each ad type? The reality is that it depends on several factors. Youtube or AdWords decide how much you are going to be charged based on the competition for a specific keyword placement or demographic, as well as how layered you get with your targeting. Let’s say, for example, you are an advertiser who is selling hats on Youtube. If this advertiser targets the whole world, they would be charged less than if, for example, only English-speaking countries. 

For instance, an advertiser selling shirts in the State of California to only people who live in California. The advertiser again would be charged more because of a more precise targeting that is layered for their campaign.

ROI on Advertisement 

At this point, you are probably asking yourself what the RIO or Return On Investment is. You could sell shirts of California to the whole world for a cheaper cost per view, but it would be a better decision to only target California at a higher price with fewer ads wasted. 


Demonetization began in 2012 and is based on new ad-friendly guidelines. An algorithm was used to look at metadata and other factors in determining if the video is something that an advertiser might be interested in. If the video does not qualify for Youtube gets demonetized, the creator can not make a dime on that video from Youtube advertising. Therefore, YouTubers should check the guidelines and make sure that their video does not violate the monetization rules if the Youtuber is trying to make money on the videos.


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